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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Is installing energy-saving reflectors in existing fluorescent light fixtures a nontaxable capital improvement or a taxable installation?
Taxable. N.R.G. Savers installs custom-designed reflectors in existing fluorescent fixtures — repositioning the sockets and cutting a four-lamp fixture to two lamps (or two to one) to save energy. Tha…
Is equipment installed at an IDA-financed facility exempt from sales/use tax when purchased as the IDA's agent with title passing to the IDA?
Exempt — but only if two conditions hold. American Linen installed a Memtek wastewater treatment system as replacement equipment at a Buffalo plant financed under a 1978 industrial revenue bond lease …
How should an HVAC contractor handle sales tax when customers give it exemption certificates or direct-pay permits instead of capital-improvement certificates, and can it buy repairs to rented equipment for resale?
The Department answered four questions for X, an HVAC seller-contractor. Under Tax Law § 1132(c) and 20 NYCRR § 532.4, all receipts are presumed taxable and the customer bears the burden of proving an…
Are materials and rented tools a tenant's contractors use to build out leased space at 7 World Trade Center exempt from New York sales and use tax?
Partly. Insurance Services Office, Inc. leased space at 7 World Trade Center and asked whether its contractors' purchases were exempt. Because legal title to the building's construction, improvements …
Is installing dry-cleaning equipment in leased space a tax-free capital improvement, and can a contractor accept a capital-improvement certificate after already billing tax?
It is taxable, not a capital improvement — but a good-faith certificate within 90 days still shifts the liability. Allied Steam Corp. installed dry-cleaning equipment (bolted to the floor and piped in…
Is selling and installing a steam boiler for a dry-cleaner in leased space a tax-free capital improvement?
No — the boiler's sale and installation are taxable, not a capital improvement. Allied Steam Corp. sold and installed a high-pressure steam boiler that supplies steam to a dry-cleaning operation in re…
Which sales tax exemption documents should a painting contractor obtain when working as a subcontractor for a prime contractor or directly for an owner or tenant?
It depends on the type of job. Sharon P. Sheinfeld asked, for a painting contractor who does both capital improvements and repairs (as a subcontractor for prime contractors and directly for owners and…
Is the permanent installation of mirrors in homes a nontaxable capital improvement?
Yes — permanently installing the mirrors is a capital improvement, so the installation charge is not taxable. Robert Otto Inc. permanently affixes mirrors to walls in new and renovated homes with a sp…
Is removing contaminated soil, done as part of installing new gasoline storage tanks, a nontaxable capital improvement?
It depends on whether the tank installation is a capital improvement. Stewart's Ice Cream Co. removes old underground gasoline tanks, installs new ones, and — where a tank has leaked — also removes th…
Is installing raised access flooring a nontaxable capital improvement or 'floor covering,' or a taxable sale and installation of tangible personal property?
It is taxable — raised access flooring is neither a capital improvement nor 'floor covering.' Raised Computer Floors, Inc. installs access flooring on bolted or epoxied pedestals above a building's sl…
Is a charge for monitoring air for asbestos content during removal, and issuing reports, a taxable information service?
It is not taxable — the charge falls within the personal/individual exclusion for information services. George Industries, Inc. hired a consultant (A & A) to take air samples monitoring asbestos conte…
Is replacing a built-in electric wall oven a nontaxable capital improvement?
Yes — it is a nontaxable capital improvement. Robert E. Harrison asked whether replacing the built-in electric wall oven in his home's kitchen is a capital improvement exempt from sales tax. The old 1…
Is installing a bolted-and-wired trash compactor in an apartment building a capital improvement, or a taxable sale and installation of equipment?
It is not a capital improvement. Multi-Pak Sales Corp. manufactures trash compactors and sells them from a catalog, installing them (as New York code requires) under the trash chutes of apartment buil…
When is replacing air-conditioning condensing units or thru-the-wall units a nontaxable capital improvement, and when is the work taxable repair of tangible personal property?
It depends on what is installed and how permanently. ANC Heating and Air Conditioning, Inc. asked whether replacing air-conditioning condensing units (for an upgrade or after a breakdown) and replacin…
When is selling an electric thermal storage heating system a taxable sale of goods, and when is installing it a nontaxable capital improvement?
It depends on who installs it. Joseph J. Guido, d/b/a Guido's Electric & Bldg. Supply, sells electric thermal storage heating units and systems and asked how four sales scenarios are taxed. The Depart…
Which interior-design installations — floor coverings, shelving, cabinetry, drapery, blinds, lighting — are tax-free capital improvements, and who pays tax on the materials?
It depends on permanence and, for floor covering, on a June 1, 1989 rule change. Hafner Associates, Inc., an interior designer, asked whether 20 different installations are tax-free capital improvemen…
What makes a New York exemption certificate properly completed, who then owes the sales tax, and what are a contractor's obligations when it receives a capital improvement certificate?
A properly completed certificate shifts the tax burden to the buyer; a contractor doing a capital improvement pays use tax on its own materials. D.C. Distributing Inc., a siding-and-window wholesaler …
Is a contract to clean grease and odor exhaust systems in commercial kitchens exempt as interior cleaning and maintenance, or is it taxable equipment maintenance?
It's taxable — this specialized equipment cleaning isn't the exempt ordinary interior janitorial service. Shaban & Son, Inc. cleans grease and odor exhaust systems in commercial kitchens under contrac…
Does a recording studio that rents studio time and equipment to record-company producers qualify for New York's investment tax credit and sales tax manufacturing exemptions, or is it treated as a rental/service business?
No investment tax credit or employment incentive credit -- because more than half the actual mixing work is done by producers and engineers who aren't Sigma's own employees, Sigma is treated as rentin…
A contractor doing a job for a tax-exempt government agency buys sand to sandblast structures before painting, then leaves the used sand on site as fill. Is the sand exempt from sales tax?
No. Sullivan Humes Painting buys sand to sandblast structures before painting them under contracts with tax-exempt entities, and leaves the spent sand on site as fill. The Department held the sand is …
Equipment is taxed as real property under the Real Property Tax Law. Does that mean selling it is exempt from sales tax as a sale of real property?
Not necessarily. Consolidated Edison plans to sell installed transformers, network protectors, and vaults — items assessed as real property under the Real Property Tax Law — and asked whether that rea…
Is building a ski lift a tax-exempt capital improvement to real property, or a taxable installation of equipment?
It splits. Peek 'n Peak Recreation asked whether building a ski lift at its resort is an exempt capital improvement to real property. The Department held it is not, except for the foundations. A capit…
My partnership built an office building at 126 East 56th Street in two stages, finishing the base building in 1983 and completing individual tenant floor build-outs through 1985. Can I allocate construction-period interest, real property taxes, insurance, security, and specifically identified indirect project costs to each floor by square footage, for gains-tax original-purchase-price purposes?
Yes, as long as it's an equitable allocation. Tower 56 Partners, a New York partnership that built and leased an office building at 126 East 56th Street in Manhattan, financed by National Bank of Nort…
Is installing a home water distillation unit a tax-free capital improvement, and how are the sale and installation taxed?
Yes — it is a capital improvement. Alfred E. Luckette Jr. (Alfran Modern Home Products) asked whether selling and installing a home water distillation unit is a capital improvement to real property. T…
My partnership is constructing an office building at 33 Whitehall Street, with the base building completed in a first stage and individual floors built out for tenants in a second, ongoing stage running into 1989. Can I allocate construction-period interest, real property taxes, insurance, security, and specifically identified indirect project costs to each floor by square footage, for gains-tax original-purchase-price purposes?
Yes, as long as it's an equitable allocation. Broad Financial Center Partners, a New York partnership building an office building at 33 Whitehall Street in lower Manhattan, financed first by Manufactu…
My partnership is constructing an office building at 32 Old Slip in lower Manhattan, with the base building finishing in phases (elevator banks completed on different dates) and individual floors being built out for tenants as leases are signed. Can I allocate construction-period interest, real property taxes, insurance, security, and specifically identified indirect project costs to each floor by square footage, for gains-tax original-purchase-price purposes?
Yes, as long as it's an equitable allocation. Assay Partners, a New York partnership building an office building at 32 Old Slip in Manhattan financed by Bankers Trust Company, was completing the build…
I'm constructing an office building floor-by-floor as tenants sign leases, rather than all at once. For gains-tax purposes, can I allocate construction-period interest, real property taxes, insurance, security, and specifically identified indirect project costs to each floor in proportion to that floor's share of the building's total square footage, counting costs only through the date each floor's construction is finished?
Yes, as long as it's an equitable allocation. 45 Broadway Atrium Partners was constructing an office building at 45 Broadway in Manhattan in two stages -- a first stage completing the foundation, shel…
Is installing in-ground water pipe to a property a tax-free capital improvement?
Yes. Thompson's Mobile Manor, a trailer park, hired a contractor to install in-ground water pipe from the existing main line to and throughout the park (the pipe becomes town property once installed).…
Is adding to a warehouse conveyor system a tax-free capital improvement if the conveyor can be removed without damaging the building?
No. McKesson Drug Company asked whether an addition to its existing warehouse conveyor system is a capital improvement excluded from sales tax. The addition is welded and bolted to the building, engin…
Is a freestanding walk-in freezer bolted to a concrete slab a tax-exempt capital improvement, or a taxable purchase?
The freezer itself is taxable; only the concrete foundation is an exempt capital improvement. Dairy Barn Stores installs freestanding outdoor walk-in freezers — assembled on site, wired, and bolted to…
Are energy-efficient vertical blinds installed in office buildings a tax-exempt capital improvement?
No — the blinds are taxable, not a capital improvement. Verticals Inc. installs energy-efficient vertical blinds in commercial office buildings, often into permanent structural pockets at the windows,…
Does a carpet retailer collect sales tax on installation — and does it matter what's under the carpet?
It depends on the surface underneath: carpet over a finished floor is a taxable installation, while carpet over a bare subfloor is a tax-exempt capital improvement. Brockport Carpet & Linoleum sells a…
When a hotel installs a lounge sound-and-light system, which parts are an exempt capital improvement and which are taxable?
It's decided component by component: the movable equipment is taxable, and the built-in pieces are a capital improvement only if permanent. A Holiday Inn installed a lounge system — DJ booth, speakers…
Is a modular home a 'mobile home' for New York sales tax, and who collects or pays the tax when it's sold and installed?
A modular home is not a 'mobile home,' and who owes the tax depends on who installs it. Affordable Homes, a mobile-home dealer starting to sell modular homes, asked three things. First, the home doesn…
Is installing a satellite dish antenna a tax-exempt capital improvement, or a taxable sale and installation?
The dish and its installation are taxable; only the concrete foundation is a capital improvement. Multi-View Communication installs satellite dish TV antennas that are welded or otherwise attached to …
Does a gas utility charge sales tax on new gas-service hookups, and does it owe tax on the pipe and materials it installs?
The utility must collect sales tax on new gas-service installation charges, and it owes sales or use tax on the pipe, fittings, tools and supplies it buys. Syracuse Suburban Gas Company installs new s…
Is a central coolant and chip-handling system for metal-cutting machines exempt production equipment, and how is its foundation and installation labor taxed?
The coolant/chip handling system itself is exempt production equipment, but its foundation materials are taxable and its assembly and installation labor fall under the § 1105-B reduced (0% after March…
Does a contractor on an Industrial Development Agency project owe sales tax on the materials, equipment, and supplies it buys for the work?
It depends on whether the contractor is a designated agent of the IDA. An Industrial Development Agency is a tax-exempt public corporation (Tax Law 1116(a)(1); 20 NYCRR 529.2), but a contractor is nor…
Is the sale and installation of a wood or coal burning stove — and its chimney and masonry — a tax-exempt capital improvement to real property?
The stove itself and its installation stay taxable, but the permanent masonry work — a brick chimney, fireproofing, and concrete base — is an exempt capital improvement; a metal chimney depends on how…
Is a utility's payment to relocate underground gas mains and repave the street — forced by city construction — a taxable repair of real property or a nontaxable capital improvement?
It is a nontaxable capital improvement, not a taxable repair. Brooklyn Union Gas relocates its underground mains when New York City construction projects would interfere with them, excavating and layi…
Which items in a contractor's construction jobs are nontaxable capital improvements, and how is tax handled when one job mixes capital improvement work with a taxable installation?
Work that permanently improves the building is a nontaxable capital improvement, but a job that mixes capital-improvement work with a taxable installation is taxable in full unless the taxable part is…
Is the lease of a relocatable modular office building subject to sales tax, even though it is classified as real property for real-property-tax purposes?
The lease is taxable as a rental of tangible personal property; the modular building is not a capital improvement even though it is taxed as real property for real-property-tax purposes. Hudson River …
When a waterproofing contractor repoints mortar, recaulks joints, and reroofs a building, which parts are taxable repairs and which are tax-exempt capital improvements?
Most waterproofing work — repointing mortar, recaulking joints, and rebuilding masonry — is a taxable repair of real property, but re-covering and insulating a complete roof is a tax-exempt capital im…
Is reconditioning already-installed kitchen cabinets — new doors, drawer fronts, hinges, pulls, and veneers — a taxable repair service or a tax-exempt capital improvement?
Reconditioning already-installed kitchen cabinets is a taxable repair/servicing of real property, not a tax-exempt capital improvement, so the contractor must charge sales tax on the whole job. Nu*Loo…
Are a telephone company's charges for installing and repairing telephone systems subject to sales tax, and does it matter whether repair equipment is used?
Charges for installing and repairing telephone equipment are taxable, and repair charges are taxable whether or not repair equipment is used; the only relief is where equipment is sold installed as a …
Is a general contractor's payment to an excavation subcontractor a taxable equipment rental, or an exempt service that's part of a capital improvement?
A general contractor's payment to an excavation subcontractor is a nontaxable service, not a taxable equipment rental, because the contractor has no right to direct and control the equipment or operat…
Is installing new linoleum over an entire room's floor a tax-exempt capital improvement, no matter what surface it's glued over?
Installing new linoleum over the floor of an entire room by cementing it down is a tax-exempt capital improvement, regardless of what surface it's glued over — so the homeowner was wrongly charged tax…
Does a caterer owe tax on floral centerpieces it buys for customers, and are its leasehold improvements exempt as capital improvements?
A caterer's floral centerpieces are taxable, and its leasehold marble floor and new ceiling are capital improvements, but its disco lights are taxable trade fixtures. Bayshore Catering buys standard f…
Is chemically cleaning and waterproofing a building's exterior a tax-exempt capital improvement or a taxable repair service?
Chemically cleaning and waterproofing a building's exterior to restore it is a taxable service of maintaining, servicing or repairing real property — not a tax-exempt capital improvement. Empire Resto…
Are a tenant's contractor-installed heating system, bathroom, plant foundation and water line capital improvements exempt from sales tax?
A tenant's contractor-installed heating system, bathroom, concrete plant foundation, loading platform and water line are capital improvements, so the charges to install them are not subject to sales t…
Is installing a canvas awning a nontaxable capital improvement, or a taxable installation service?
Installing a canvas awning is not a capital improvement, so the awning company must charge sales tax on the full price for the awning and its installation. Section 1105(c)(3) taxes the service of inst…
In a manufacturer's audit: are cleaning tools and supplies exempt, are tenant HQ alterations capital improvements, does 'tax included' billing count, and can tax be refunded on property used out of state?
This four-part audit opinion holds: (1) naphtha, alcohol and wipers used to clean leather in manufacturing are 'tools' and 'supplies,' not exempt 'machinery or equipment' under § 1115(a)(12) — but und…
Are a tenant's animal-cremation units (removable trade fixtures) a capital improvement, and is the fuel used to run them taxable?
A tenant's animal-cremation units — set in concrete, vented through the walls and plumbed to the building's oil supply — are removable trade fixtures, not a capital improvement, so their installation …
Is a tenant's installation of a fire-sprinkler system a nontaxable capital improvement to the leased real property?
A tenant's installation of a fire-sprinkler system in its leased premises is a capital improvement, so the charge for installing it is not subject to sales or use tax. Under the three-part test in § 1…
Is a tenant's installation of a fire-sprinkler system in leased premises a nontaxable capital improvement to real property?
A tenant's installation of a fire-sprinkler system in its leased premises is a capital improvement, so the charge for the installation is not subject to sales or use tax. The Department applied the th…
Can a mobile-home dealer get a refund of the difference between the tax it paid the manufacturer and the tax that would apply in its customer's county?
A mobile-home dealer cannot get a refund simply because it sold a home to a customer in a New York county with a lower tax rate than the dealer's own county. When a dealer buys homes from a manufactur…
When a tenant installs a private telephone system, which components are nontaxable capital improvements and which parts (and the custom software) remain taxable?
A tenant's private telephone system is taxed component-by-component. Only the parts that become part of the real property are a nontaxable capital improvement: the lines run through the walls and ceil…
Is a subcontractor's back-hoe excavation taxable, and does it matter whether the prime contractor is doing a repair or a capital improvement?
Whether a subcontractor's back-hoe excavation is taxable turns on the end result of the prime contractor's work, not on who owns the property. If the prime contractor is repairing real property (e.g.,…
Does a gas utility owe sales tax when it reimburses a city's contractors for taking precautions to protect its gas mains during city capital improvement work?
No — those reimbursements are not taxable. When a gas utility reimburses a city's construction contractors for precautions they take to protect the utility's gas mains — using caution generally, subst…
Are canopies and kiosks a contractor installs at a gas station a nontaxable capital improvement, or taxable — and does it matter whether the customer owns or rents the land?
It depends on whether the customer owns or rents the land. When a contractor installs service-station canopies and kiosks (sunk in concrete footings, removable only with jackhammers) for the owner of …
Browse New York rulings by topic
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.