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.
No New York rulings match these filters
Try a different search term or clear the filters.
When a county public utility agency buys discounted hydroelectric 'preference power' from the state power authority and arranges for Con Edison to distribute and bill for it as the agency's operator, who owes sales tax, utility gross-earnings/receipts tax, and local utility tax on each piece of the arrangement?
The county Utility itself, as a governmental entity, is exempt from sales tax on its own purchases (with a purchase order) and from the utility franchise taxes entirely (since it isn't a taxable corpo…
When Con Edison leases part of its distribution system to a county public power agency and acts as that agency's billing/collection operator for discounted 'preference power,' which pieces of the arrangement create taxable receipts for Con Edison itself under the sales tax and the utility franchise/gross-receipts taxes?
Con Edison's own rental/service fee for leasing part of its distribution system to the County of Westchester Public Utility Service Agency and acting as its billing/collection operator IS Con Edison's…
When a business sells its subscriber list to a competitor, is that both a taxable sale of information and a bulk sale of business assets?
It is both. A C.P.A. asked, for a client that sells a taxable information service (a semi-monthly publication with about 200 subscribers), whether selling those accounts to a major competitor is both …
Is a company taxable when it obtains copies of public records like deeds and mortgages from a county clerk and furnishes them to an attorney?
Yes — furnishing public-record copies is a taxable information service. A law firm asked whether receipts from obtaining and furnishing copies of public records (deeds, mortgages) to a bank were taxab…
Are the trademark-search reports a company sells to attorneys a taxable information service, or are they exempt because they're personalized?
Taxable — the reports don't qualify for the personal/individual exclusion. Trademark Service Corporation compiles trademark records (federal, state, and common-law marks) into a library and sells sear…
My company sells a de-alcoholized wine product that tastes like wine but has less than half a percent alcohol by volume. Is this 'non-alcoholic wine' a taxable alcoholic beverage under New York's Article 18 excise tax?
No, not taxable. Joseph E. Seagram & Sons' "St. Regis Wine Without the Alcohol" products -- de-alcoholized wine containing trace amounts of alcohol (always under one-half of one percent by volume) -- …
Does a church have to charge sales tax on cookbooks it sells occasionally from its office?
No — occasional office sales aren't through a 'shop or store.' A Greek Orthodox church holds an Exempt Organization Certificate and keeps a small number of cookbooks (made from parishioners' recipes, …
Are in-flight movie projection systems and the movie films rented to airlines taxable in New York, and where does delivery occur?
The equipment is exempt; the films are taxable based on where delivery occurs. Inflight Services rents airlines light-weight film projectors, screens, and ear sets (and supervises installation) plus a…
New York Advisory Opinion TSB-A-86 (18)I: Are pensions paid to employees of the Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA) exempt from New York personal income tax as pensions of a state or municipal employee?
No, not under the general public-employee pension exemption. The Department ruled that pensions paid to Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA) employees do not qualify for t…
I'm selling my interest in a joint venture that owns interests in shopping centers. Because a contribution I was supposed to make to the venture never happened, my actual share of the venture's profits and capital ended up below 50%. Does selling that sub-50% interest trigger New York's Real Property Transfer Gains Tax as an acquisition of a 'controlling interest' in a real-property-holding entity?
No. Interstate Properties held an interest in a joint venture (with Pyramid Company of Utica) that was originally structured around three shopping centers, but because Interstate never contributed one…
Which of a bulk-mailing company's services — labeling, sealing, stamping, inserting, sorting, imprinting — are subject to sales tax?
The services split — some taxable, some not if separately stated. Skyview Graphics runs a bulk-mailing service and asked about eleven tasks. Producing, fabricating, processing, printing, or imprinting…
Is an employment-background investigation firm's work taxable as 'detective services' under New York City's tax, or exempt as an information service?
Taxable as detective services. Fidelifacts, an investigative agency, prepares employment-background reports on job applicants for its clients — including verifying application information but also int…
When a photo studio ships finished photographs, does New York sales tax depend on where they're delivered — including when out-of-state clients have them dropped at a New York address first?
Delivery point controls. A CPA asked, for a New York City photography studio, whether finished photographs delivered to various places are taxable. New York sales tax is a destination tax (20 NYCRR 52…
If a foreign government's central bank opens a small New York trading office to buy U.S. Treasury securities and trade currencies -- but has no federal taxable income because its activities aren't a U.S. trade or business -- is its New York State bank franchise tax liability capped at the $250 minimum?
Yes, assuming the stated facts hold -- because New York's Article 32 entire net income starts from federal taxable income, and Petitioner (Malaysia's central bank) is not engaged in a U.S. trade or bu…
New York Advisory Opinion TSB-A-86 (17)I: Must an individual shareholder of a New York S corporation add back, under section 612(b)(3) of the Tax Law, the New York City General Corporation Tax paid by the corporation?
No. The Department ruled - citing its own three-week-old opinion in Matter of AD Rutland Realty, Inc. (TSB-A-86(16)I) by name as controlling precedent - that the New York City General Corporation Tax …
For a hazardous-waste treatment company, what's taxable — its equipment purchases, its charges to customers, and the disposal services it buys?
Equipment taxable; customer charges taxable; resold off-site disposal not taxable. BDT runs a hazardous-waste treatment facility (incineration and hydrolysis); nothing is reclaimed. (1) Its purchases …
Can a gas supplier buy the cylinders it provides to customers tax-free as purchases for resale?
Generally no — not on these facts. Jackson Welding sells industrial gases and welding supplies and provides gas cylinders to customers, almost always by lease. It argued its cylinder leasing is a sepa…
When Con Edison and New York City's own Public Utility Service jointly petition about a preference-power distribution deal -- Con Edison leasing part of its distribution system and acting as the City's billing/collection agent -- which pieces of the arrangement create taxable receipts for Con Edison, and which stay exempt as the City's own governmental purchase/resale?
The City's Public Utility Service, as a municipality, is exempt from sales tax on its own purchases (with a governmental purchase order) and owes nothing under the section 186 or 186-a utility franchi…
New York Advisory Opinion TSB-A-86 (16)I: Must a shareholder of a New York S corporation add back, under section 612(b)(3) of the Tax Law, their distributive share of the New York City General Corporation Tax paid by the S corporation?
No. The Department ruled that the New York City General Corporation Tax is not an 'income tax' within the meaning of Tax Law § 612(b)(3), because federal case law requires an income tax to be a net in…
For a biotech company, which equipment, utilities, and services are exempt as research-and-development versus production — and does the exemption reach New York City?
R&D exemptions reach New York City; production exemptions don't. Enzo Biochem does laboratory research and manufactures DNA-based diagnostic probe kits, and asked how the research-and-development and …
Does a company's mobile filter press that refines industrial wastewater qualify for New York's manufacturing-machinery exemption?
No — it doesn't qualify. Central New York Industrial Services runs mobile filter presses (pumps, compressors, screens) that refine clients' liquid industrial waste on-site; the filtered water is pumpe…
Is charging to irradiate a core sample — making it radioactive so it can be tested — a taxable service in New York?
Yes — it's taxable. Company X, which analyzes core samples, needs each sample made radioactive before testing; Company Y performs the irradiation and returns the radioactive sample with a report of th…
Does a company that laser-prints tax returns from clients' data files sell taxable tangible personal property, or a service?
It's selling taxable tangible personal property, not a service. Lasar Image Corp. takes computer tapes from its accountant and tax-preparer clients and prints paper copies of income tax returns, then …
New York Advisory Opinion TSB-A-86 (15)I: May a railroad-equipment-leasing limited partnership, whose only place of business is in New York, allocate part of its income to sources outside New York based on its lessee's out-of-state activities?
No. The Department ruled that Hallin Equipment Company, a limited partnership leasing railroad cars solely to Penn Central (later Conrail), could not allocate any of its income to non-New York sources…
If a subsidiary pays its parent corporation a 'management fee' that reimburses the parent's own officers' salaries and overhead, does the subsidiary have to count part of that fee as compensation to a 5%-plus stockholder when computing New York's entire-net-income-plus-compensation franchise tax -- even though the fee is technically paid to a corporation, not an individual?
Yes -- the portion of a management fee that a subsidiary pays to its parent (a 5%-plus stockholder) that exceeds genuine reimbursement of the parent's out-of-pocket expenses on the subsidiary's behalf…
New York Advisory Opinion TSB-A-86 (14)I: Are Railroad Unemployment Insurance Act benefits and Title VII Regional Rail Reorganization Act of 1973 benefits exempt from New York personal income tax?
Different results for each. The Department ruled that Railroad Unemployment Insurance Act benefits are exempt from New York personal income tax, because federal law (45 U.S.C. § 352(e)) flatly bars an…
When a bank gives a depositor a 'gift' for buying a CD and builds the gift's value into a lower interest yield, is that a taxable sale?
Yes — they're taxable sales, not free promotional giveaways. A commercial bank planned to give each certificate-of-deposit buyer a 'gift' (all tangible personal property, none nominal in value), build…
When a film distributor licenses films to TV networks and also sells its right to collect future syndication payments to a bank, how should it source those two kinds of receipts to New York State in its franchise-tax receipts factor?
Whether a film distributor's network-licensing receipts source to New York depends on whether the distributor is acting as the film producer's AGENT (in which case its commissions are 'services perfor…
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…
New York Advisory Opinion TSB-A-86 (13)I: Is Hope Sayles, an adjudged-incompetent individual whose guardian maintains a New York residence for her but who spends less than 183 days a year in New York, a New York resident for personal income tax purposes?
No, presumptively. The Department determined that, absent a showing that Hope Sayles' guardian or the appointing Probate Court took some action to change her domicile, her original Rhode Island domici…
New York Advisory Opinion TSB-A-86 (12)I: Does machinery and equipment that turns foods, milk, and cheeses into finished foods qualify for the Tax Law § 606(a) investment tax credit, when the business both caters/serves prepared meals and sells processed food in bulk at retail?
It depends on how the equipment is principally used. The Department ruled that Anthony Pieragostini's 'Cheese World' machinery and equipment does NOT qualify for the section 606(a) investment tax cred…
Does New York tax an aircraft engine warranty-repair contract, and where — the repair site or the aircraft's base?
It's a taxable service contract, and the tax follows where the aircraft is hangared — not where the repair is done. Garrett Turbine (Arizona) sells flying-hour engine warranties; customers get repairs…
Can New York force an out-of-state affiliate to collect sales tax just because its sister company operates in New York?
Possibly yes — if the out-of-state company is really the 'alter ego' of its New York affiliate. Levitz Furniture planned a new New Jersey corporation, owned by the same parent as its existing New York…
Does an out-of-state mail-order subsidiary have to collect New York tax just because a sister company runs stores here?
No — on these facts the mail-order company isn't the alter ego of its New York affiliate, so it has no nexus and needn't collect New York tax. Spencer Gifts planned to reorganize into a New Jersey 'Ma…
Must a city collect sales tax on the sewer 'user charges' it bills residents, even when a private firm runs the treatment plant?
No — the city's sewer user charges aren't taxable. The City of Long Beach bills residential and commercial users a 'user charge' for sewage treatment, and plans to have a private company build, own, a…
Which pieces of lab and manufacturing equipment used by a biotech diagnostics company qualify for New York's 10% research-and-development credit versus the 6% investment tax credit -- and can the same equipment ever qualify for both, or must the company pick one?
All of Petitioner's laboratory equipment used directly to perform, monitor, or store materials for its disease-diagnostic research (centrifuges, incubators, spectrophotometers, gene sequencers, freeze…
Which of an advertising agency's services and sales are taxable in New York, and how does a principal-agent agreement change the result?
It depends on what the agency is really selling: pure advertising services are exempt, but selling tangible property is taxable — and a valid principal-agent agreement shifts who owes the tax. In a de…
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 trade association that runs a single three-day trade show each year count as a taxable-show 'promoter'?
No — running a single yearly show doesn't make the organizer a 'promoter,' though the landlord may be one. The Master Furriers Guild holds one three-day trade show a year. Under Tax Law § 1131(5)-(6),…
Is a landlord who only rents show space — without organizing the shows — a 'promoter' who must meet New York's show-permit rules?
Yes — if it hosts more than three shows a year, even a landlord that only rents space is a promoter. Madison Square Garden Center rents space to show organizers who subdivide and sublet it to vendors,…
A Texas securities firm has no New York office, only floor brokers ('$2 brokers') executing orders on the NYSE/AMEX. How much of its commission income -- from unrelated firms' orders, and from its OWN customers' orders -- gets allocated to New York for franchise-tax purposes?
Commissions Petitioner's New York floor brokers earn executing OTHER (unrelated) firms' orders are 100% allocated to New York, since those are services performed entirely in New York by Petitioner's o…
Does a newly formed co-op corporation qualify for New York's reduced 0.04% franchise-tax capital rate for 'cooperative housing corporations,' if its units are currently zoned/certified for commercial use but the co-op plans to convert them to residential dwelling use?
New York's reduced capital-base rate for cooperative housing corporations under section 210.1(a)(2) applies automatically to any corporation that qualifies as a 'cooperative housing corporation' under…
If an oil company accepts a properly completed resale certificate from a petroleum customer who ISN'T listed on the Tax Department's roster of registered motor-fuel distributors, does that absence from the roster automatically mean the oil company didn't accept the certificate 'in good faith' -- exposing it to tax on those resale receipts?
No -- a customer's absence from the Tax Department's roster of Article 12-A motor fuel distributors is not, by itself, sufficient to establish that the oil company's acceptance of that customer's resa…
New York Advisory Opinion TSB-A-86 (11)I: Do payments made to a former officer under a paid leave-of-absence agreement with his employer qualify as 'pensions and annuities' eligible for the $20,000 section 612(c)(3-a) exclusion, and does the employer's use of Form W-2 (rather than W-2P) matter?
No, the payments don't qualify, and yes, the W-2 form matters as evidence. The Department ruled that payments Nat Gilbert received under a leave-of-absence agreement with Matsushita Electric Corporati…
Our state university system is leasing a building for a college, to be financed through publicly sold certificates of participation. The landlord's construction obligations will be secured by a mortgage naming us as mortgagee -- to protect us if the landlord defaults on the required renovation work, not because we're the real economic lender. Is recording that mortgage, and later assigning it to a bond trustee, exempt from mortgage recording tax?
Exempt on both counts, for two different reasons. CUNY entered a 20-year Capital Lease-Acquisition Agreement with a private landlord to lease renovated and newly constructed space at Tenth Avenue and …
A private charitable foundation has federal 'unrelated business taxable income' solely because of debt-financed investment income (interest, dividends, capital gains under IRC section 514) -- does that alone make it subject to New York's unrelated business income tax, and if so, can it deduct 50% of dividends or use an investment-based allocation instead of the standard three-factor formula?
Yes -- New York's 1970 legislative history for Article 13 makes clear the Legislature intended debt-financed property income to count as an 'unrelated trade or business,' so a foundation with federal …
New York Advisory Opinion TSB-A-86 (9)I: Can a taxpayer deduct the unused portion of a New York automobile registration fee, for a personally-used car, on her New York personal income tax return?
No. The Department ruled that Sarah Bloamer, who discontinued using her car and destroyed its plates nine months before her New York registration expired, could not deduct the unused portion of the re…
New York Advisory Opinion TSB-A-86 (10)I: For a multi-series municipal bond mutual fund where each series holds only one state's bonds, should the Tax Law § 612(b)(1) addback for non-New-York-bond interest be computed using the whole fund's total exempt interest, or only the exempt interest of the specific series the shareholder owns?
Only the specific series' interest. The Department ruled that for a regulated investment company organized with separate series (each holding only one state's municipal bonds, with segregated assets a…
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…
Are a materials lab's concrete strength-test reports a taxable information service?
No — the reports are a non-taxable 'personal and individual' information service. Fortunato Sons, a contractor, buys concrete strength-and-standards testing from a lab. A written report compiling test…
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…
Can New York force out-of-state fur subsidiaries to collect tax when they share a brand and owners with New York stores?
Yes — here the New Jersey subsidiaries are the alter egos of their New York affiliate and parent, so they have nexus and must collect New York tax. Harfred / The Fur Vault planned to move their New Je…
Does a car-wash service that cleans a dealer's new, unsold vehicles have to charge sales tax?
No — not if the dealer gives a resale certificate, because the cars are held for sale. Thomas Murray plans to wash only new, unregistered cars and trucks at a dealer's premises. Washing a vehicle is n…
Within a multi-tier corporate family, does New York's 90%-interest-add-back rule reach interest paid to a 'grandparent' corporation (a shareholder's own parent) or to a 'nephew' corporation (a sibling subsidiary's own subsidiary) -- or does it only reach interest paid to a DIRECT 5%-plus stockholder or that stockholder's OWN subsidiary?
No to both -- section 208.9(b)(5)'s 90% interest add-back only reaches interest paid to an entity that is itself a 5%-plus STOCKHOLDER of the paying corporation, or a SUBSIDIARY of such a stockholder.…
Is cook-to-order pizza that is sold and eaten unheated taxable, and does cooking it to order make it 'sold in a heated state'?
Cooking pizza to order does not make it 'sold in a heated state,' but the pizza is taxable unless the seller proves it is the kind of unheated food commonly sold in food stores like bakeries. This mod…
Is a CAD/CAM computer used to design custom manufactured products exempt as production machinery?
Mostly no — designing isn't 'production,' so the CAD/CAM computer isn't exempt production machinery, with one exception. Buffalo Forge uses its CAD/CAM system to create individualized drawings that le…
My company plans to transfer real property to its wholly-owned subsidiary, and then transfer all of that subsidiary's stock up to its own parent corporation. Are both transfers exempt from New York's Real Property Transfer Gains Tax as a mere change of form?
Yes. Philip Morris Incorporated planned to transfer New York real property (in Cayuga County) to its wholly-owned subsidiary Miller Brewing Company, and then separately transfer all of its Miller Brew…
During a franchise-tax audit, is the Department required to actually consider evidence a company offers showing it was NOT 'principally engaged' in a transportation-type business (so it should be taxed under Article 9-A rather than Article 9's sections 183/184) -- or can auditors classify a company's tax status without weighing that evidence?
Yes -- whether a corporation is taxable under Article 9's sections 183/184 (transportation/transmission franchise tax) or under Article 9-A depends entirely on what activity the corporation is 'princi…
How is an advertising agency's work taxed in New York — its services, the property it produces, and purchases it makes for clients?
It depends on the activity — advertising services are exempt, but selling finished property is taxable, and buying tax-free as a client's agent requires a strict test. Advantage Concepts, an advertisi…
If a company builds an entire dedicated research-and-development building -- including labs, offices for researchers and managers, flexible 'shell space' for future expansion, and support/mechanical space -- does the WHOLE building qualify for New York's 10% research and development credit, or only the portions used directly for lab work?
Yes -- for a purpose-built facility genuinely dedicated to research and development, the ENTIRE building can qualify for the 10% research and development credit under section 210.18, not just the labo…
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.