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 a tablet-based remote health-monitoring product, and the devices sold with it, subject to sales tax?
It splits. The monthly fee for the product is taxable prewritten software: caregivers log in to the provider's web portal and gain constructive possession of the software (the right to use and direct …
Is a lump-sum payment from a former employer's 401(k) restoration plan, distributed after the taxpayer retired and left New York, exempt from New York State and City tax?
Yes. The lump sum from the nonqualified 401(k) restoration plan is exempt under the federal Pension Source Law (4 USC § 114) because the taxpayer was a nonresident when paid. It also did not accrue to…
Are Internet-based large-file transfer subscription plans subject to New York sales tax?
No. The plans are a nontaxable bridging service. Their primary function is letting a customer send large files to recipients over the Internet: the customer uploads a file to the provider's server and…
Can a foreign company buying materials delivered to a New York affiliate use resale certificates, and must it register?
It must register, and it may buy for resale only on materials it truly resells without using. The Canadian company has its suppliers drop-ship raw materials to its New York affiliate; because possessi…
Is a real-time web-analytics product that reports a customer's own website traffic subject to sales tax?
No. The product is an information service, but it qualifies for the 'personal or individual' exclusion and is not taxable. The company embeds tracking code on a customer's website, gathers data about …
Does a planned web-hosting data center qualify for New York's internet data center equipment exemption?
Yes, on the facts presented. New York exempts machinery, equipment and other property (servers, routers, storage racks, software, interior fiber/cables, and the like) bought by an operator of an inter…
Are interior lighting design services taxable if the plans are delivered to the client electronically?
Yes. New York taxes interior decorating and design services - which include lighting design - whether or not any tangible property changes hands. Delivering the design plans electronically rather than…
Is an extensive building facade restoration a nontaxable capital improvement or a taxable repair?
It is a capital improvement, so the work is not subject to sales tax. New York taxes services that maintain, service or repair real property, but not work that adds to or improves real property as a c…
New York Advisory Opinion TSB-A-16(1)C: May a corporate partner aggregate the activities and employees of two majority-owned broker-dealer partnerships to meet the Investment Tax Credit's 'principally used' and employment tests?
Yes. Using the aggregate method, a corporate partner deemed a registered broker-dealer through disregarded SMLLCs may combine the qualifying uses and employees of its two majority-owned partnerships t…
Which data-center colocation charges - cross connects, cage rentals, equipment service, power - are subject to New York sales tax?
It splits across the five services. (1) Cross Connect access to the provider's 'dark' fiber is not taxable telephony/telegraphy - the provider does not transmit signals (the customer lights the fiber …
When a dealer or builder picks up modular home modules at a New York factory, is the sale taxed at the factory's location or at the installation site?
At the factory's location. New York sales tax is a 'destination tax,' but 'destination' means the point where the vendor transfers possession to the buyer (or the buyer's designee) -- not where the go…
When does the brownfield site-preparation credit window close, and do later Phase II construction costs qualify as site preparation costs?
The site-preparation credit may be claimed for up to five tax years after the year the Certificate of Completion (CoC) issued, so a December 2013 CoC means the last year is 2018. Phase II excavation, …
Are fees to download and maintain prewritten software taxable in New York, and are per-order fees charged to website vendors taxable?
The software fees are taxable; the per-order vendor fees are not. Charging customers to download prewritten software is a taxable sale of tangible personal property, and the company's 'installation fe…
Is New York sales tax on a car lease due all at once, and can I get a refund if I move the car out of state?
The tax is due all at once, and there's no refund. For a motor-vehicle lease of one year or more, New York charges sales tax at the inception of the lease on the total of all lease payments for the en…
Is a flaxseed Moist Heat Pack for breastfeeding relief exempt from New York sales tax as medical equipment?
Yes -- it's exempt medical equipment. The Moist Heat Pack (a flannel pillow filled with flaxseed that can be heated or cooled and worn against the skin) is designed to treat and help prevent breastfee…
When does a steel subcontractor collect sales tax, which exemption certificates can it accept, and what's taxable on a taxable job?
A subcontractor does NOT collect sales tax on its charges to a prime contractor when the job is for a Tax Law section 1116(a) exempt organization or is a capital improvement, provided it receives the …
Are a cloud DNS-security firm's services taxable in New York, does its data center create nexus, and are its software plug-ins a separate taxable sale?
Yes to nexus and to tax. The firm (and its predecessor LLC) has had New York nexus at least since 2006, when it established a data center here -- physical property in the state is more than a slight p…
Can a cost-reimbursement Army facilities contractor buy property tax-free as purchases for resale?
No. The contractor has a cost-plus contract to operate, maintain, and repair facilities at a New York Army post, buying property in its own name (with title passing to the Army on delivery) and gettin…
Are a couple Yonkers residents or New York City residents when their house sits entirely in Yonkers but the front yard and mailing address are in the Bronx?
They are Yonkers residents, subject to the Yonkers resident income tax surcharge. Residency follows the dwelling's location and the couple's domicile; the residential structure sits wholly in Yonkers …
Can manufacturing production-control software be sold tax-free as machinery used directly in production or in research and development?
No. The software lets manufacturers quote prices, process orders, schedule jobs, control materials, track labor, and ship orders -- coordinating and monitoring the production process. But it does not …
Are online hotel-booking services that can't set the room price 'room remarketers' that must collect New York hotel sales tax?
No. The two services let travelers reserve hotel rooms (including in New York) through their websites and collect a non-refundable deposit (typically 10%) and certain fees, which they keep as their ch…
Is a monthly fee to operate and maintain a sewage treatment plant subject to New York sales tax?
Yes. The company's daily work at sewage treatment plants -- inspecting the plant, reviewing records, testing the treated water, oiling and adjusting pumps and equipment, maintaining logs and pump stat…
Is a monthly fee to operate and maintain a sewage treatment plant subject to New York sales tax?
Yes. The company's daily work at sewage treatment plants -- inspecting the plant, reviewing records, testing the treated water, oiling and adjusting pumps and equipment, maintaining logs and pump stat…
Is a charge to bring a mobile video-gaming theater (a game-equipped trailer) to a customer's event taxable in New York?
Yes, when the trailer is delivered to a New York location. The business brings a 32-foot trailer with five widescreen TVs and consoles (Wii, Xbox, PlayStation) to events like children's birthday parti…
Does a company owe sales tax on short-term rentals of furnished single-family homes, condos, and apartments that aren't part of a hotel?
No. The company rents eight furnished single-family units (homes, condos, an apartment) -- some owned, some leased, one managed -- none part of a hotel, motel, or lodging facility, for stays of two ni…
Are a broker's fees and material reimbursements taxable when the broker buys building materials for a contractor?
It depends on whether the broker is a true agent. If the broker acts as the contractor's agent, the purchase is treated as a retail sale directly from the vendor to the contractor: sales tax is due on…
Which of a broadcast studio's twelve charges to a TV-station customer are subject to New York sales tax?
Only the charges tied to tangible property are taxable; the electronically delivered production services are not. The studio rebroadcasts a Japanese station's content in the U.S. and bills twelve sepa…
Is removing and testing a piece of a building for asbestos, and reporting the results, taxable in New York?
Yes, generally. Removing a piece of a building (brick or wall), sending it to a lab for asbestos analysis, and reporting the results is taxable as the maintenance, servicing, or repair of real propert…
Is a hosted IT cost-management service taxable -- as an information service, as software, or both?
It depends on how it's sold. The core 'Line-Item IT Billing' offering is a nontaxable information service: it collects, processes, and reports the customer's own IT-usage data back to that customer. I…
Which of a data-center colocation provider's charges -- space, power, cabling/bandwidth, tech support -- are subject to New York sales tax?
It varies by charge. (1) Space -- charges for rack, cabinet, cage, or suite space where the customer puts its own servers and has 24/7 access are nontaxable as a lease of real property (security ID ch…
Are organic blended fruit-and-vegetable juice drinks taxable, and does selling them with an insulating bag for one price make the charge taxable?
No to both. The cold juice drinks are made from organic fruits and vegetables plus water (blended, not juiced, so the fiber is retained), with nothing else added. They qualify as exempt 'food and food…
Does the historic homeownership credit's requirement that 5% of expenditures be on the exterior apply to each year's project, or to the cumulative multi-year rehabilitation?
It applies to each separately certified rehabilitation project. Because the credit is allowed only on final certification of a three-step process, a taxpayer who claims year-by-year (filing a Part 3 e…
Is installing, repairing, and inspecting fire alarm and suppression equipment subject to New York sales tax?
Mostly yes, with two exceptions. Installing fire alarm systems, suppression systems, sprinklers, and extinguishers is taxable (the customer pays tax on both the equipment and the installation), UNLESS…
Is a company that arranges and resells catered office lunches the taxable vendor, and can it buy the food with a resale certificate?
Yes, it's the taxable vendor -- and no, it can't use a resale certificate. The company connects restaurants, caterers, and food trucks with employers buying lunches for staff: it selects vendors and m…
Are a federal employee's Thrift Savings Plan distributions exempt from New York tax, including for a private IRA she rolled into the TSP, and can she also use the $20,000 subtraction?
The TSP distributions attributable to her federal employment (contributions by her and her federal employer, plus their earnings) are exempt under Tax Law § 612(c)(3)(ii). The portion attributable to …
Is a harbor 'party cruise' fare taxable when it includes a meal and drinks, and would a sightseeing-only ticket be taxable?
The fare that includes food and drink is fully taxable; a sightseeing-only ticket is not. The operator runs roughly three-and-a-half-hour 'party cruises' around New York Harbor; the fare includes a ho…
Is admission to an indoor children's play center taxable, and does the 75% 'qualifying place of amusement' exemption apply?
Admission is taxable, and the 75% exemption does not apply. The indoor children's play centers (bounce houses, climbing structures, foam blocks, games, and in one case a Lazer Tag arena) are 'places o…
New York Advisory Opinion TSB-A-15(5)C: If an alien (Swiss) holding company's disregarded Delaware LLC opens a New York office but only invests in securities for its own account, is the company subject to New York's Article 9-A franchise tax?
No. An alien corporation whose disregarded LLC merely opens a New York office but limits its activity to investing in securities for its own account within IRC section 864(b)(2) is not doing business …
Are a lighting designer's interior and exterior lighting-design services subject to NY sales tax, and does it matter that the work is supervised by a licensed architect or engineer?
Interior lighting design is taxable; exterior lighting design is not. Designing interior lighting systems is an 'interior decorating and designing service' taxable under Tax Law section 1105(c)(7), an…
Are a CLE provider's self-study courses delivered on CDs/DVDs subject to NY sales tax, and what about its sales of CDs, DVDs, and books by themselves?
The CLE self-study courses are not taxable, but plain media and books are. When the provider sells a self-study CLE program -- the CD or DVD of course content, the CD-ROM of reference materials, and t…
Are subscription charges for online meeting, web-conferencing, remote-support, and remote-computer-access products subject to NY sales tax or the section 186-e telecom excise tax?
No. The products are not taxable for sales tax or for the section 186-e telecommunication excise tax. Each product works by letting the subscriber's own computers connect to one another over the Inter…
Are sales of downloadable video-game software, in-game content, access/point/subscription cards, and dollar-value gift cards subject to NY sales tax, and where is the sale taxed?
Most are taxable; dollar-value gift cards are not. Selling prewritten game software the customer downloads -- a full game or add-on content like new levels or maps -- is a taxable sale of tangible per…
Is a nonresident's gain on redeeming S-corporation stock, and the interest on the installment note, New York source income when the corporation owns New York real estate?
The interest on the installment note is not New York source income (it is intangible personal property). But the portion of the gain attributable to the corporation's New York real property is New Yor…
New York Advisory Opinion TSB-A-15(4)C: Can a qualified New York manufacturer claim the real property tax credit for real property taxes it pays under a lease from a related party?
No. A qualified New York manufacturer cannot claim the real property tax credit for real property taxes it pays under a lease, because the credit covers leased-property taxes only when the property is…
Is a contractor's installation of permanently affixed electrical switchgear a nontaxable capital improvement, and what happens to the materials and field-service charges if it can't get a Form ST-124?
Yes, it's a capital improvement, so the charges aren't taxable -- and missing the ST-124 shifts the burden of proof, not the result. Replacing a building's medium-voltage switchgear -- bolted and hard…
Is removing or abandoning a disused oil tank as part of an oil-to-gas heating conversion subject to NY sales tax?
It depends, and there's a one-year rule. Removing a disused oil tank, or abandoning it in place (cleaning and filling it with sand, foam, or concrete), is by default a taxable real-property maintenanc…
Are charges for recovering propane from old or unusable tanks and returning it to the customer subject to NY sales tax?
No. The propane-reclamation service is not subject to sales or use tax. Except for the special gas/utility tax under Tax Law sections 1105(b) and 1105-A, propane is not treated as tangible personal pr…
Does a hotel's 20% 'set-up fee' for a public room make the room rental taxable, and is the set-up fee itself taxable?
The set-up fee is part of the rent for the public room, so it is taxable only when the room rental itself is taxable. The hotel charges a 20% 'set-up fee' (sometimes called a service charge) on every …
Is a drop-shipment facilitation service that routes and translates order/inventory data between e-commerce merchants and their suppliers subject to NY sales tax?
No. The drop-shipment facilitation service is not subject to sales or use tax because its primary function is data processing, which is not a taxable service. The 'Drop Ship Master' service connects e…
If a retired SUNY employee does a direct trustee-to-trustee rollover of 401(a) and 403(b) tax-deferred annuities into an IRA, is the rolled-over money later taxed as New York income?
No. Because the retiree's Existing Plans were funded with contributions from the State University of New York, a New York State public employer, the portion of any future IRA distribution that represe…
My two-member LLC bought land, built a 40-story building, and plans to convert it into a two-unit condominium, distributing one unit to each member in proportion to their original ownership share. Is distributing the condo units out of the LLC to its members a taxable conveyance for New York's Real Estate Transfer Tax, given we already paid the tax when the LLC bought the land?
Yes, exempt -- but only if each member's post-conversion condominium ownership percentage matches their original ownership allocation in the LLC's Operating Agreement. A two-member LLC bought New York…
For a uniform/linen rental-and-laundry business, which items can be bought for resale, and are monogramming and lost-item fees taxable?
The company is a laundry service, so the items it launders can't be bought for resale, but the non-laundered storage items can. Renting uniforms, gowns, and linens that the company launders, maintains…
Does a retailer collect NY sales tax when it sells built-in appliances on an installed basis, or is that a capital improvement?
Selling built-in appliances installed is a capital improvement, so the retailer doesn't collect tax from the customer -- the retailer pays the tax on the appliance instead. Publication 862 classifies …
For a company that readies foreclosed properties for sale, which of its services and reimbursements are subject to NY sales tax, and what does it owe on its own purchases?
Appraisals and the management fee aren't taxable, but resold utility, protective, and repair/maintenance services are -- unless the customer is exempt. The company gets bank-owned (REO) properties int…
Which of a credit-card fraud-management firm's services -- fraud scoring, managed review, chargeback, payment gateway, implementation, consulting, support -- are subject to NY sales tax?
The fraud-detection services are taxable protective services; the chargeback and payment-gateway services are not. Any ongoing service whose function is to detect or prevent fraud or theft is a protec…
Is a cloud-computing (infrastructure-as-a-service) product that sells scalable computing power subject to NY sales tax?
No -- selling computing power is not one of the services made taxable by the Tax Law, so the cloud product is not subject to sales tax. Customers rent 'instances' of CPU, memory, and storage to run th…
Is the annual fee for an internet retailer's shopping membership program (free shipping, streaming, e-book borrowing, member discounts) subject to NY sales tax?
Yes, the annual membership fee is taxable. A payment for the right to buy taxable goods at a discounted price -- or to get discounted delivery on taxable goods -- later is itself subject to sales tax,…
Are a healthcare-standards group's subscription Rapid Recall Exchange and Healthcare Registry internet services subject to NY sales tax?
Yes -- both subscription database services are taxable information services, though the separately sold ID codes are not. Furnishing information -- collecting, compiling, or analyzing information and …
If only one membership class of a social or athletic club has dues over $10 a year, must the club charge sales tax on all the other classes' dues too?
Yes -- because the club's class A members are active annual members paying dues well over $10 a year, the dues tax applies to the club, and once it applies the club must collect it on the dues, assess…
Are a fitness-training gym's membership and per-visit fees subject to New York State sales tax or New York City local tax?
Not State sales tax, but yes NYC local tax. The gym (a functional-fitness training affiliate with coaches and specialized equipment) charges membership or per-visit fees to use its facilities. These f…
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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.