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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New York Advisory Opinion TSB-A-17(1)C / (18)S: How do sales tax and the section 186-e excise tax apply to an MVNO's prepaid mobile sales through retailers, refills, and wholesale to another MVNO, and how are they sourced?
An MVNO's own-brand prepaid sales through retailers qualify for the sales-tax resale exclusion but are taxable to the MVNO for the section 186-e excise tax; refills are taxable for both; wholesale to …
Is a gym's charge to an independent personal trainer for using its facilities subject to New York City sales tax?
Yes. New York City imposes a 4.5% local sales tax on charges for the use of gyms, health salons, and similar establishments directed at improving bodily appearance (NYC Administrative Code § 11-2002(a…
Are charges for inspecting backflow / cross-control prevention devices subject to New York sales tax?
It depends on whether the inspection is government-mandated. A diagnostic test of equipment is normally a taxable maintenance service even if no repair is done. But inspections that are mandated for c…
Is customized retail-training software (with embedded videos) and its subscription fees taxable, and how is the tax sourced?
Mostly taxable, sourced to where it's used. The 'skinned' training software is prewritten software customized for each retailer — taxable as tangible personal property, and because the custom 'skinnin…
A trust is dividing a NYC condo interest and other assets equally among four beneficiaries. If one beneficiary receives the real property interest in place of their cash share, does that trigger New York's Real Estate Transfer Tax (RETT) -- and does it matter whether the property is worth more or less than that beneficiary's one-quarter share?
It depends on whether cash changes hands. A trust held marketable securities, cash, and a 96% interest in a NYC condo, to be split equally among the settlor's four children after her death. The truste…
Can a working farm buy a pellet gun used only to control varmints exempt from New York sales tax?
Yes, on these facts. A pellet gun is taxable tangible personal property, but Tax Law section 1115(a)(6)(A) exempts property used predominantly (more than 50% of the time) in the production of goods fo…
Are custom satellite imaging analysis reports made for a single client subject to New York sales tax?
No. The petitioner sells two products: standard reports (it collects tax on those) and custom reports tailored to one client about a specific facility, provided only to that client. Furnishing informa…
Is a permanent prostate implant that treats BPH a tax-exempt prosthetic aid in New York?
Yes. The product is a permanent adjustable transprostatic implant, sold with its single-use delivery housing as one indivisible unit, used to treat Benign Prostatic Hyperplasia (BPH) by partially repl…
How do New York sales taxes apply to selling/renting trade-show displays and the many related event services?
New York sales tax is a destination tax, so the displays and most related services are taxable to the extent they are delivered to the customer in New York. The outright sale or rental of displays is …
Is a cloud service that remotely runs a customers telephone system taxable as prewritten software in New York?
Yes. The cloud collaboration service is essentially prewritten software that instructs the customers own phone equipment how to route and process calls, voicemail, video, conferencing and the like. Sa…
Is a building in a qualifying census tract for the historic rehabilitation credit when the Office of Parks, Recreation and Historic Preservation has approved it, even though the tract's median income later looked too high?
Yes. The determination by the New York State Office of Parks, Recreation and Historic Preservation (OPRHP) that the building is in a qualifying census tract for the rehabilitation-of-historic-properti…
Are admission tickets to an exempt organizations charity softball game subject to New York sales tax?
Yes. Admission charges to places of amusement, including sporting events, are taxable. Although a registered exempt organization generally need not collect tax on admissions, that exemption does not a…
Must a school student club that collects donations to buy childrens books for a charity report the money on sales tax returns?
No. The student club is not buying or selling books; it only solicits monetary donations and forwards them to a 501(c)(3) charity, which then buys and distributes the books. Because no sale of tangibl…
Is sales tax on a ferry boat purchase limited to the first $230,000 of the price in New York?
Yes. Tax Law section 1115(jj) exempts the receipts over $230,000 from the sale of a vessel (including an outboard motor or trailer sold with it) for sales on or after June 1, 2015. So a ferry operator…
Are a social clubs fees charged to non-members for lessons, camps, sing-alongs, and facility rentals taxable?
Mostly no. A clubs member dues are taxable, but fees charged to non-members are not taxable just because of the clubs status — each activity is judged on its own nature. Tennis lessons are non-taxable…
Is an online service that turns users photos and clips into videos taxable as prewritten software in New York?
Yes. The company sells online access to a web interface that lets customers turn their photos and clips into videos: customers choose content, order, music, logos, text, and style, and proprietary vid…
Can a taxpayer increase his New York basis in out-of-state municipal bonds by the premium paid, when New York taxes the interest but allowed no deduction for the amortized premium?
No. New York determines bond basis under federal law. Because the taxpayer must amortize the premium on tax-exempt bonds and reduce basis each year (IRC § 171; § 1016(a)(5)), and no New York Tax Law p…
Is a lump-sum distribution from a federal employee's Thrift Savings Plan (TSP) exempt from New York income tax?
Yes. The lump-sum TSP distribution attributable to contributions made by the federal employee and his federal employer is exempt from New York income tax under the federal-employee pension subtraction…
Does New York sales tax apply to a free app that lets users pay to use restrooms at participating venues?
No, on both counts. The app is prewritten software, which is taxable tangible personal property when sold — but a sale requires a transfer for consideration, and here the app is given to users free of…
Is subscription access to an online secure board-document file-sharing portal taxable as software in New York?
Yes. The petitioner sells subscription access to online applications that let corporate boards store, annotate, approve, collaborate on, and share secure documents. Giving customers access to this pre…
Is the sale of a fractional share in an aircraft taxable, and is a later sale of the retired plane exempt?
No to the share, and the retired plane is exempt. Selling a fractional share is not a sale of tangible personal property because the share owner never gets dominion and control of the aircraft: the op…
New York Advisory Opinion TSB-A-16(7)C: Is a foreign bank's New York office a 'branch' under Tax Law section 1454(a)(5)(B) — so its deposits go in the deposits factor — when the office approves loans and disburses funds but does not accept loan repayments?
No. Because the New York office did not accept loan repayments through its own employees on a regular and systematic basis (all repayments went by wire to an unrelated bank), it was not a 'branch' und…
Are materials an IDA agent buys for off-site utility improvements exempt from New York sales tax?
No. An Industrial Development Agency (IDA) is exempt from tax on its own property and activities, and a private developer acting as the IDAs agent can share that exemption — but only for property the …
Is a report analyzing a clients customers that benchmarks against industry data a taxable information service?
Yes. Collecting, compiling, and analyzing information and furnishing reports is an information service taxable under Tax Law section 1105(c)(1). There is an exclusion for information that is personal …
In a 'reverse' IRC § 1031 like-kind exchange, a specialized company (the exchange accommodation titleholder, or EAT) temporarily holds legal title to the replacement property until the taxpayer sells its old property. When the EAT later transfers that replacement property to the taxpayer, is that transfer itself subject to New York's Real Estate Transfer Tax (RETT)?
No RETT is due on that specific transfer. In a 'reverse' like-kind exchange under IRC § 1031, an exchange accommodation titleholder (EAT) buys and briefly holds legal title to replacement property bef…
Is a cable companys charge to extend its broadband network to a rural property a taxable capital improvement?
No, and not for the reason asked. The customer paid a $15,000 contribution in aid of construction so the cable company would build 6/10 mile of coaxial cable (owned by the cable company) to bring broa…
Are a medical-records companys retrieval, coding, abstraction, training, and storage services taxable?
Mostly not. Retrieving and furnishing a patients specific confidential medical records to an authorized requester is not taxable, no matter how delivered, and neither are the related delivery charges.…
Are hosted email, fax, online meeting, and file-management services taxable in New York?
It splits four ways. Email service is not taxable: although email is telephony/telegraphy, the Internet Tax Freedom Act bars taxing Internet access, which includes email and instant messaging. Fax ser…
Is a sewing (quilting) service performed on a customers quilt subject to New York sales tax?
Yes. The petitioner sews the layers of customers quilts together with a stitching design. That is taxable under Tax Law section 1105(c)(2) as producing, fabricating, or processing tangible personal pr…
Can a vendor bundle sales tax into its hourly rate, and must it investigate a customers exemption certificate?
No to absorbing tax, and no duty to investigate. A person required to collect tax may not absorb the sales tax into its hourly rate; the Tax Law requires it to collect the tax from the customer and to…
Can a New York taxpayer subtract gambling losses (up to winnings) from income as a subtraction modification, instead of itemizing?
No. There is no basis in the Tax Law for a subtraction modification for gambling losses. Because New York starts from federal adjusted gross income (which includes full gambling winnings), losses can …
Are a hotel-industry providers online reputation and survey products taxable information services?
It splits. All four products are information services because the company collects, compiles, and analyzes data and gives hotels access to it. The online reputation product (Product A) is taxable: its…
Does the Metropolitan Commuter Transportation Mobility Tax (MCTMT) apply to the wages an employer pays to federal work-study students?
No. The MCTMT does not apply to the part of an employer's payroll expense attributable to wages paid to federal work-study students. MCTMT payroll expense uses the IRC definition of wages, which exclu…
Is natural gas converted by a supermarkets fuel cell to electricity exempt from sales tax?
Partly. The supermarket does production activities (baking, cutting/packaging meat, slicing deli items) and sells those goods, so it produces tangible personal property for sale. Gas, electricity, and…
Is raising chickens for research/vaccine eggs (not food) a farming activity eligible for the sales tax exemption?
Yes. The petitioner raises chickens to produce fertilized, specific-pathogen-free eggs sold to vaccine manufacturers and research and educational institutions; the eggs are never sold for human consum…
Are wood shavings a commercial dog breeder buys to bed breeding dogs and their puppies exempt from sales tax?
No. The wood shavings are taxable. Even though the breeder sells the puppies, neither sales-tax exemption applies. The Tax Law section 1105-B exemption for production supplies covers only listed activ…
Does a sole proprietor offering CPR and first-aid instruction need a sales-tax Certificate of Authority?
Only if he sells taxable property or services. In-person CPR and first-aid training is not a taxable service. If the training manual is included with the class for no extra charge, it is treated as an…
New York Advisory Opinion TSB-A-16(6)C: Is an out-of-state real-estate brokerage with no New York office, whose employee worked 26 days in New York on two 2014 sales, doing business and subject to Article 9-A franchise tax?
Yes. A Washington real-estate brokerage with no New York office, whose Connecticut-based employee spent 26 days in New York visiting properties and meeting sellers on two 2014 sales for which it earne…
New York Advisory Opinion TSB-A-16(5)C: Do unauthorized foreign surplus-lines (non-life) insurers compute their franchise tax under Tax Law section 1502 or section 1502-a, and does the section 1505(a)(1) limitation cap their liability?
They must compute tax under Tax Law section 1502, not section 1502-a, for years beginning on or after January 1, 2003, because section 1502-a applies only to authorized non-life insurers; the section …
New York Advisory Opinion TSB-A-16(4)C: Do unauthorized foreign surplus-lines (non-life) insurers compute their franchise tax under Tax Law section 1502 or section 1502-a, and does the section 1505(a)(1) limitation cap their liability?
They must compute tax under Tax Law section 1502, not section 1502-a, for years beginning on or after January 1, 2003, because section 1502-a applies only to authorized non-life insurers; the section …
New York Advisory Opinion TSB-A-16(3)C: Did a bank's regular employee trips to, and computer equipment housed at, a New Jersey hosting center make it 'doing business' outside New York so it could allocate its income under Article 32?
Yes. A bank whose employees regularly traveled to a New Jersey hosting center, where it kept data-processing equipment under a 10-year license, was doing business outside New York and therefore entitl…
Are a real-estate listing website's paid agent-promotion products subject to New York sales tax?
No. The three paid products (ad-free featured listings, and buying a share of agent-list/banner views by zip code or city, on web and mobile) all enhance an agent's advertising position on the site, s…
Which of a restaurant franchisor's charges to its New York franchisees are subject to sales tax?
It splits by item. Taxable: charges for hardware (including the internet-connection device), the combined hardware-and-software installation charge (not separately stated), and ongoing IT support that…
Are web-based identity/access-control and data-messaging services subject to New York sales tax?
It depends on the service. The two 'Communicate' products - a hosted Portal and a Trusted Identity Framework - act as electronic gatekeepers that verify users and keep unauthorized people out of a cus…
What is the last year a brownfield tangible-property credit may be claimed when the Certificate of Completion issued December 31, 2008?
The tangible-property credit may be claimed for qualified property placed in service for up to ten taxable years after the year the Certificate of Completion (CoC) issued. With a December 31, 2008 CoC…
Is a cloud data-storage, backup, file-sharing and sync subscription subject to New York sales tax?
No. The service is not taxable. It is not a sale of prewritten software, because the optional app is free, is not required, and the service is fully usable through any web browser - so customers are n…
Is a service that collects and segments internet-user data for ad targeting a taxable information service?
Yes. The company collects and analyzes data on roughly 700 million internet users (via HTML tags and cookies), groups them into targeting 'segments' and makes those segments available to advertisers. …
Does New York sales or use tax apply to a sculpture bought from a NY dealer but delivered abroad and later displayed in New York?
No. New York sales tax is a destination tax: it turns on where the buyer takes possession. Here the Florida buyer authorized a museum to retrieve the sculpture, and the museum's contract carrier (the …
Are nonqualified deferred-compensation distributions paid to a nonresident in installments over 10 years 'retirement income' exempt from New York tax and withholding?
Yes. Distributions from a nonqualified deferred-compensation plan paid as substantially equal periodic payments over at least 10 years are 'retirement income' under the federal Pension Source Law (4 U…
Are auto repairs done out of state taxable in New York if the repaired car is delivered to the customer in New York?
Yes. Repair and maintenance of tangible personal property is a destination tax: what controls is where the repaired property is delivered to the customer. Here the dealer's body shop is in New Jersey,…
Are sales of warm, freshly baked cookies subject to New York sales tax even for take-out or delivery?
Yes. New York taxes food and drink sold by restaurants and similar establishments. Food sold for off-premises consumption can escape the tax only if it is sold in an unheated state (and is of a type c…
Are a New York City fitness studio's class entry fees and weight-loss-challenge fees subject to sales tax?
Only to New York City local tax, not State tax. The studio's class entry fees and weight-loss-challenge fees are not subject to New York State sales tax: they are not admission charges to a place of a…
New York Advisory Opinion TSB-A-16(2)C / (15)S: Must a kiosk operator that lets customers buy prepaid airtime, texts and data collect sales tax, and does it owe the section 186-e telecommunication excise tax?
The kiosk operator must collect sales tax on prepaid mobile calling-service top-ups sold on or after April 13, 2015, but not before, and owes no section 186-e excise tax because it merely facilitates …
Is the purchase of commercial vessels delivered in New York subject to sales tax, and on the full price?
It is taxable, but only on the first $230,000 of each vessel. Vessels are tangible personal property, and a sale is taxable where the property is delivered. Here the three sightseeing ships were bough…
I bought two adjacent properties across the road from each other -- one a $2 million house, the other a $450,000 lot I consider vacant land bought as a separate investment -- using two separate deeds and separate contracts on the same day. Do I owe New York's additional 1% 'mansion tax' only on the $2 million house, or do the two purchase prices get combined?
The two purchase prices must be aggregated, pushing the transaction over the $1 million threshold for New York's additional Real Estate Transfer Tax (the 1% 'mansion tax' under Tax Law § 1402-a). The …
Must a nonresident include in New York source income a lump-sum distribution from an excess-benefit nonqualified deferred-compensation plan earned while working in New York?
No. The lump-sum distribution from the excess-benefit plan to a nonresident is not subject to New York income tax under the federal Pension Source Law (4 USC § 114). The plan is a nonqualified deferre…
When must a scaffolding company collect New York sales tax on charges to contractors?
It depends on whether services come with the scaffolding and what the job is. Since January 1, 2015, scaffolding provided together with erection and/or dismantling is treated as a service (even if the…
Is the sale and installation of a custom closet-organizing system a nontaxable capital improvement?
No - it is taxable. Installing tangible personal property is taxable unless the result is a capital improvement, which requires all three tests: it substantially adds value or prolongs the property's …
Is a service contract covering both computer hardware and software subject to New York sales tax?
Yes - the whole contract is taxable unless the software part is broken out. Maintaining, servicing and repairing computer hardware (tangible personal property) is a taxable service, and buying a maint…
Is equipment a repair shop buys to perform taxable repairs itself subject to sales tax?
Yes. A car dealer's purchase of a wheel-alignment machine is a taxable retail sale of tangible personal property. The machine is used to perform the dealer's repair and alignment work, which is a taxa…
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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.