New York State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in New York, with full citations and the original source on every page.
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When a motel buys soap, paper cups and bathroom tissue to place in guest rooms, can it buy them tax-free as a purchase for resale or as production materials?
Taxable — the motel must pay sales tax on these supplies. Lanz's Motel asked whether items like plastic or paper cups, bathroom tissue and guest soap that it places in rooms for guests can be bought t…
A home-party seller paid use tax on the gifts and supplies she bought — can she get a refund, and does the packaging she passes on to customers qualify for an exemption?
Mostly no refund — the use tax was properly due — except for packaging materials she passes on to customers. Marilyn Rieland runs home sales 'parties' for Home Interiors and Gifts and awards 'hostess …
Must an out-of-state book publisher with no New York location register and collect New York sales tax when it sells into the state through a sales agent who solicits customers here?
Must register and collect — the in-state soliciting agent creates a duty to collect. Atlantic Flyway/John A. Gambling Enterprises (d/b/a George Mead's) publishes books in Connecticut, has no New York …
Are sales of PBX telephone equipment to businesses exempt as telephone central office equipment, and are the related service contracts taxable?
Taxable — the PBX equipment doesn't qualify for the central-office exemption, and the service contracts are taxable. ITT Communications sells PBX (Private Branch Exchange) telephone equipment to priva…
Is production machinery like a coffee roaster exempt from New York sales tax, and how is the separate installation charge taxed?
The roasting machinery is exempt production equipment (except New York City) with an ST-121 certificate; the installation charge is taxed on a date-based schedule. Duane and Siganoc sells reconditione…
If a finance company collects lease payments that include sales tax and then remits money to the leasing company, does it still owe that sales tax to the state?
Yes — a finance company that comes into possession of money representing state sales tax must remit it to the state, and paying it to the leasing company does not discharge that obligation. Tilden Com…
When a parent company's own payroll employees do maintenance work for its subsidiaries and the subsidiaries reimburse the parent, are those charges taxable services?
Taxable — the parent's maintenance charges to its subsidiaries are taxable services. Chapin & Fagin Division of GCF Inc. carries maintenance employees on its central payroll who perform maintenance fo…
Are the membership charges for a medical-records service taxable when what the member receives is a medical-data booklet and a microfilm history?
Taxable — the membership charges are receipts from the sale of tangible personal property. Dalmed Corporation runs a medical and emergency data and records organization and asked whether its membershi…
Does a photographer who documents customers' belongings for insurance and identification have to collect sales tax on the charge?
Taxable — the photographer must collect sales tax on the full charge. James P. Nastasi runs an inventory-documentation service: he photographs customers' personal possessions and household goods to pr…
Are a social club's membership dues taxable when the club is incorporated in New York and meets in New York City but lists an out-of-state address?
Taxable — dues and initiation fees over $10 are subject to the combined 8% State and New York City sales tax. The New York SKAL Club, a strictly social club incorporated under New York law in 1939 (wi…
How is New York sales tax applied when a railroad buys cross ties in New York for various uses — shipped out of state, used on government contracts, used on its own in-state projects, or held as inventory for a supplier to reclaim?
It depends on how each batch of ties is used — delivery in New York is taxable, but several refunds, exemptions and resale rules apply. Conrail buys treated railroad cross ties from GCL, delivered FOB…
Does a company owe sales tax when it rents equipment only to re-rent it to others, rather than using it itself?
Not taxable — it's a purchase for resale, so no tax is due if a resale certificate is given. People's Oil Co. rents credit-card imprinters from Mobil Oil and does not use them itself; instead it re-re…
Are industrial gases used in manufacturing exempt from sales tax, and does the buyer need an exempt use certificate to purchase them tax-free?
Exempt — production gases are exempt, but a properly completed Exempt Use Certificate is required to buy them tax-free. Airweld asked (1) whether gases such as nitrogen, argon, oxygen and acetylene us…
Is an electronic message-transmission system for securities traders taxed as a telegraph service, and does the interstate exclusion apply?
Taxable as telegraph service under § 1105(b), but only for communications where both customers are in New York — interstate traffic is excluded. Xerox's Autex division runs communication services lett…
When a city charges for garbage collection only when it supplies a dumpster, is that charge a taxable equipment rental or an exempt municipal trash-removal service?
Taxable — the charge is a dumpster rental, not exempt trash removal. The City of Rome supplies Dempster Dumpster units for contractual garbage collection; it charges nothing for trash removal where it…
Can a vendor collect the 4% state sales tax using its own bracket schedule instead of the one the Tax Commission prescribes?
No — the vendor must use the Tax Commission's prescribed bracket schedule. J. E. Vanderbilt & Co. asked whether it could collect the 4% State sales tax using a bracket schedule different from the one …
Are charges for freelance writing taxable when the copy will end up in an advertising brochure or catalog?
Not taxable — freelance writing is not an enumerated taxable service. Charles Mintz asked whether State and local sales tax applies to charges for professional freelance writing services where the cop…
Is there a 50% cap on how much of a sand-and-gravel seller's bill can be a tax-exempt, separately stated delivery charge?
No 50% cap exists — a separately stated, reasonable delivery charge is fully excluded. Peck's Trucking, Inc. sells sand and gravel, and in most cases its trucking cost exceeds the cost of the material…
Are a wholesaler's gummed labels — some on shipping cartons, some price labels on the product — taxable when the wholesaler buys them?
Both kinds of labels are exempt — on different grounds. Trans World Music Corporation, a wholesaler, buys gummed labels: some are affixed to the inside or outside of the cartons shipped to customers (…
Are a printer's plates and negatives exempt from New York sales tax, and does the exemption reach New York City's tax?
Exempt as production equipment everywhere except New York City. D.L. Terwilliger Co. Inc., a printer under audit for December 1975 through May 1980, asked whether it owes sales tax on the plates and n…
Is the machinery and equipment a scrap processor buys to turn scrap into salable standard products exempt from sales tax?
Exempt — the scrap-processing machinery and equipment qualify for the production exemption, with an Exempt Use Certificate. Wm. E. Kugler & Bro. processes scrap metal and scrap paper into standard pro…
Does a private railroad acting as an independent contractor for the state owe sales tax on materials it buys to improve property that the MTA leases?
Taxable — Conrail must pay sales and use tax on the materials. Conrail, under a July 1980 agreement with New York State, performs improvement and maintenance work on Owasco River Railroad properties (…
Are a plumbing/heating contractor's bathroom, boiler, heating-system and water-heater installations 'capital improvements' to real property for New York sales tax purposes?
Yes — all eight jobs are capital improvements. William Jiskra Plumbing and Heating Contractor asked whether eight kinds of work count as 'capital improvements' for New York sales tax: (1) adding a new…
Can a picture-framer separately state its delivery charge for artwork so the delivery charge isn't subject to New York sales tax?
Not taxable, if separately stated and reasonable. James Linnehan, doing business as James Frames, frames works of art and delivers them; because the art is fragile, his delivery charge is substantiall…
Can a hazardous-waste disposal company claim New York's production-machinery exemption on the equipment it uses to transport, treat and dispose of other companies' chemical waste?
Taxable — the exemption is denied. Frontier Chemical Waste Process, Inc. transports, treats and disposes of hazardous chemical wastes for industrial and commercial customers, and does not itself produ…
When a printer delivers printed material to a customer in New York who later mails some of it out of state, is sales tax due on the whole charge at the delivery-point rate?
Taxable in full at the delivery-point rate. Meridian Graphics, Inc., a printer, delivered printed material to a customer in Albany County, New York. The customer argued that because it would mail some…
Are barges (scows) that earn more than 75% of their receipts moving cargo between states exempt 'commercial vessels' under New York sales tax, along with services performed on them?
Exempt — the scows and services on them qualify. Lone Star Industries, Inc. planned a new subsidiary to move aggregates (crushed stone, sand) by scow (barge) exclusively for an affiliated company, NYT…
Is installing linoleum with adhesive, or carpeting on a stairway, a tax-free capital improvement to real property?
Linoleum cemented down is always a capital improvement; carpet depends on the subfloor. S & Y Floor Covering asked whether installing linoleum with adhesive, and installing carpeting on a stairway tri…
Is building a new, independent roof over an existing roof a tax-free capital improvement to real property?
Yes — the new roof is a tax-free capital improvement. Orchard Park Veneer and Container Corporation had a new roof built over an existing structure: steel trusses spanning the old roof, supported by s…
Can a restaurant that gives no guest checks or receipts include sales tax in its stated prices instead of adding it separately?
Yes — the restaurant may use the 'unit price' (tax-included) method. Dowd's Beefalo Farms #2 operates a fast-food restaurant and issues no guest checks or other written receipts. It asked whether sale…
Are doughnuts sold in packages of 8-12 for off-premises consumption from a mobile trailer subject to New York's prepared-food sales tax?
Not taxable — the packaged doughnuts fall within the off-premises food exception. John P. Hoban, doing business as 'The Donut Man,' produces and sells doughnuts in packages of 8-12 from a small (7' x …
Is a subcontractor's sale of building materials to a construction manager acting as the owner's agent exempt from sales tax on a capital-improvement project?
Exempt — a sale to the owner's agent is a sale to the owner. An attorney asked whether tangible personal property to be incorporated as an integral component of a capital-improvement construction proj…
Is fuel oil a property owner buys to heat a city-owned building tax-exempt as a resale to the city or a purchase as the city's agent?
Taxable — it was neither a resale nor an agency purchase. Tamas Friedman owns a Brooklyn building whose furnace also heats an adjacent building owned by the New York City Housing Preservation and Deve…
Is roof repair and restoration work — flashing, new drains, remedial repairs, coating, and expansion joints — a tax-exempt capital improvement, or taxable repair and maintenance of real property?
It's taxable — the roof work is repair and maintenance of real property, not a capital improvement, so the contractors' charges are subject to sales tax. Fargo Manufacturing Company hired two contract…
Is a window quilt (an insulated window shade) taxable when sold, and is installing it a tax-free capital improvement?
Taxable both ways — as goods, and as an installed job. Nassau Solar Development, Inc. asked whether selling an uninstalled 'window quilt' is subject to sales tax, and whether selling one installed is …
Are charges for refinishing already-installed cabinets, including replacing cabinet doors, subject to New York sales tax?
Taxable — it's repair/maintenance, not a capital improvement. Old Craft Furniture Refinishing removes the existing finish from already-installed cabinets and applies a new finish, sometimes also selli…
When a photographer consigns student photos to a nonprofit PTA to sell to parents, who owes and collects the sales tax?
Taxable — the PTA is the photographer's agent and must collect the tax. Irvin Simon Photographers, Inc. 'sells' student photographs to parent-teacher associations on a consignment basis for resale to …
In deciding whether a shopping paper meets the 90%-advertising limit, is the area of inserted advertising supplements counted as part of the printed area?
As originally decided, yes — supplement area was counted (but this was later reversed). The New York State Publishers Association asked whether, in computing the percentage of a shopping paper's print…
In a chain of selling, leasing and using coin-operated lockers, which transactions are taxable and who collects the tax?
The manufacturer's sale is a tax-free resale; the subsidiary taxes its lease receipts. AVM Corporation manufactures coin-operated checking lockers, sells them to a wholly-owned subsidiary, which lease…
Is a SIDS apnea-monitor and resuscitator system exempt medical equipment, and is the intercom bundled with it also exempt?
The monitoring/rescue equipment is exempt; the intercom is taxable. Modern Medical Systems Co. sells or rents an infant apnea-monitor and resuscitator system used to detect and rescue an infant from a…
Is the installed sale of a modular home a taxable sale of goods when the home sits on land leased (not owned) by the buyer?
Taxable — it's a sale of goods, not a capital improvement, because the buyer only leases the land. Greenwood Village Planned Retirement Community, Inc. sells modular homes installed on lots it owns an…
Is raising dogs and ferrets for labs and pets 'farming,' and is the feed a tax-free purchase for resale as part of the animals?
Taxable — it's not farming, and metabolized feed isn't bought for resale. Marshall Research Animals, Inc. commercially raises and feeds dogs and ferrets for sale to laboratories and as pets. It argued…
When a store doubles a manufacturer's coupon, what amount is subject to sales tax?
Tax is due on the price paid plus the manufacturer's coupon value — the store's doubling is not taxed. Robert J. Seid asked what counts as taxable 'receipts' when a merchant redeems a manufacturer's c…
Is a company's sale and installation of a private telephone interconnect system on a customer's property a tax-exempt capital improvement, and must the installer collect a Certificate of Capital Improvement (ST-124)?
Yes — installing a private telephone interconnect system on the customer's own property is a capital improvement, so the charge is not taxed, and no ST-124 certificate is required. U.T.C. Group Inc. a…
Is the sale and installation of lockers bolted into wall alcoves a tax-exempt capital improvement, or a taxable sale and installation of tangible personal property?
The lockers are taxable — because they can be unbolted and removed without material damage, installing them is not a capital improvement, so both the sale and the installation are subject to sales tax…
Is sales tax due on a member-owned golf club's Certificate of Membership and a required Subordinate Debenture Bond, and is the tax refundable when the member later leaves and redeems the bond?
Both are taxable, and there's no refund. A member-owned golf club's Certificate of Membership and a required (even refundable) Subordinate Debenture Bond are both taxed as initiation fees, and later c…
Does a monthly consumer newsletter listing manufacturer refund offers qualify as a tax-exempt periodical, so its sales aren't subject to sales tax?
It's exempt — the monthly 'Consumer's Bulletin' meets the five-part test for a periodical, so its sales aren't taxed. Rose Marie Thompson asked whether she must collect sales tax on sales of her publi…
When an out-of-state seller registered in New York ships goods to a New York customer of its out-of-state buyer (a drop shipment), and no exemption certificate is given, is New York sales tax due?
Yes — because the goods were delivered in New York and no exemption certificate was provided, New York State and local sales tax is due. Banner Metals (a Pennsylvania company registered to collect New…
Is the rental of a crane taxable when the rental company supplies the operator but the customer supervises and directs the crane's use?
It's taxable — because the customer directs and controls how the crane is used, renting the crane (even with the rental company's operator) is a taxable lease of tangible personal property. Enercon Sy…
When a truck lease separately bills the lessee for interest expense (plus a profit markup), is that interest charge part of the taxable rental receipt?
Yes — the separately billed interest charges, including the 10% profit markup, are part of the taxable rental receipt and sales tax must be collected on them. Island Leasing Corp. leases trucks to New…
Does filing the required bulk-sale notice, by itself, relieve the purchaser of all liability for the seller's unpaid sales taxes — and does timing matter?
No — filing the bulk-sale notice by itself does not relieve the purchaser of all liability; it is the timely notice combined with withholding the purchase price that limits and protects the buyer. Kle…
Are restaurant meals for a municipality's employees on official business exempt from sales tax when the city pays directly, and when the employee pays and is reimbursed?
Exempt in both cases — meals for city employees on City business are exempt from sales tax whether the City pays the restaurant directly or the employee pays and is fully reimbursed. The City of Rome …
Is computer hardware and custom software used to produce books for sale exempt from New York State and county sales and use taxes?
Both are exempt — the computer hardware used to produce books for sale is exempt production equipment, and the custom software is nontaxable intangible personal property. Matthew Bender & Company, a l…
Is a fishing party boat that carries passengers from New York to New Jersey fishing waters and back — without discharging them in another state — an exempt commercial vessel engaged in interstate commerce?
Not exempt — because the boat brings its passengers back without discharging them in another state, it isn't engaged in interstate commerce, so its fuel, provisions, supplies, and repairs are taxable.…
When a contractor makes asphalt and uses it in its own capital-improvement road jobs, is that a 'sale' of the asphalt that qualifies the contractor for the production machinery and fuel exemptions?
No — the contractor uses (doesn't sell) the asphalt it makes for its own capital-improvement jobs, so it isn't a vendor and can't claim the machinery or fuel/utility production exemptions. Willets Poi…
Is a weekly ad-heavy shopping publication a tax-exempt newspaper or periodical, so its sales aren't subject to sales tax?
It's exempt as a periodical — the weekly 'Buy-Lines Press' isn't a newspaper (no reports of current events), but it meets the periodical test, so its sales aren't taxed. B-L Press, Inc. asked whether …
Are 'start-up' charges and one-year warranty service on newly installed rooftop HVAC units subject to sales tax?
Split result — the 'start-up' is part of a nontaxable capital-improvement installation, but the later one-year warranty service is a taxable repair. Enercon Service, Inc. performs two services on roof…
Is a bulletin that is essentially a listing of manufacturers' refund offers a tax-exempt periodical, or a taxable information service?
It's taxable — a bulletin that is essentially a listing of manufacturers' refund offers is a taxable information service, not an exempt periodical or newspaper. Rose Marie Thompson asked whether she m…
Are annual assessments a homeowners' association charges its members subject to New York's tax on dues paid to a social or athletic club?
Yes (for the State tax) — a homeowners' association that maintains common recreational areas is a 'social club,' so its annual assessments over ten dollars are taxable dues, though Saratoga County cho…
Is the rental of a slitting machine used to cut metal coils to customers' specifications exempt from sales tax as production machinery?
Exempt — renting a slitting machine used to cut metal coils to customers' specifications is production machinery used in processing, so the rental receipts aren't taxed (outside New York City). Genera…
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These are official tax letter rulings and advisory opinions issued by New York's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.