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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If a customer won't sign a capital improvement certificate (Form ST-124) and asks to be charged tax, must the contractor collect sales tax on the installation work?
Yes. Without a timely, properly completed Form ST-124, the contractor must collect and remit sales tax on both the installed property and the installation charges. Because the contractor already paid …
Are a concrete-pumping company's charges to contractors subject to New York sales tax when its own crew operates the pump trucks?
Not when the job is a capital improvement. Because the company keeps dominion and control of the trucks and supplies the operators, it is providing a service, not renting equipment. Pumping concrete t…
Is the equipment a contractor rents for asbestos abatement and demolition exempt from sales tax when the job is a capital improvement to a New York State-owned building?
No. Equipment a contractor rents to perform asbestos abatement and demolition is a taxable purchase, even when the job is a capital improvement to a State-owned building. The equipment never becomes a…
Can a manufacturer sell uninstalled building panels (materials) tax-free if the customer hands over a Form ST-124 Certificate of Capital Improvement?
No. A sale of uninstalled panels is a taxable retail sale of tangible personal property under Tax Law § 1105(a), and a Form ST-124 (Certificate of Capital Improvement) cannot be used to buy building m…
Is installing a permanent gutter protection (gutter guard) system onto a house's existing gutters a tax-exempt capital improvement?
Yes. Installing a permanent gutter protection system onto existing gutters is a capital improvement and not subject to sales tax. It meets all three prongs of Tax Law § 1101(b)(9)(i): it prolongs the …
Is replacing a hot water hydronic coil and altering the ductwork in a heating system a tax-exempt capital improvement, or a taxable real-property repair?
Capital improvement — not taxable to the customer. Although replacing a heating-system coil is normally a taxable repair of real property, here the coil replacement required fabricating new ductwork a…
If a New York marina buys floating cement docks and installs them with its own employees, is the purchase a tax-exempt capital improvement or taxable tangible personal property?
Taxable. Because the marina bought the floating cement docks uninstalled and installed them using its own employees, it purchased only tangible personal property — not a capital-improvement installati…
Is a tree-and-shrub consulting/inspection service (inventory and health report) taxable in New York, or is it exempt when done as part of a capital improvement?
Taxable, with one exception. The Department concluded that a tree-and-shrub consulting service — inventorying trees/shrubs and producing a custom report on their species, condition, health, risk, and …
Are sales and installation of custom interior storm-window inserts a tax-exempt capital improvement, or taxable installation of tangible personal property?
Taxable. The Department concluded that the petitioner's custom window inserts ('interior storm windows') are NOT a capital improvement, because they fail the second prong of the three-part test — they…
Where is the sale of imported commercial lighting fixtures taxed when various carriers deliver them, and how are the receipts apportioned for corporation tax — when the fixtures are sold installed or uninstalled?
It depends on delivery and installation. For commercial lighting fixtures imported from Europe and sold WITHOUT installation, New York sales tax follows the destination/transfer point: delivery by com…
When a fabricator sells custom curtain walls to a contractor who installs them on a New York building, is it a tax-free capital improvement — and is the fabricator taxed only on its raw materials?
Mixed. Installing the curtain walls IS a tax-exempt capital improvement (it meets the three-prong test in Tax Law § 1101(b)(9)). BUT the fabricator's sale of the curtain walls to the contractor is a t…
Is fabricating and installing a permanent non-canvas awning a taxable installation or a non-taxable capital improvement?
It's a capital improvement, so the installer shouldn't charge customers sales tax on the job. The business builds awnings from metal framework and PVC/vinyl material (no canvas), securely attached so …
Are an environmental firm's testing, remediation-design, monitoring, construction-oversight, and consulting charges subject to New York sales tax?
It varies by service. Testing and monitoring of real property — even if no remediation follows — are taxable services of maintaining/servicing/repairing real property (§ 1105(c)(5)), UNLESS they are e…
How does New York sales tax apply to a contractor's purchase, sale, and installation of residential and commercial solar energy systems?
It varies by component and timing. Solar modules, racking, and inverters bought for installation at a specific customer's residence or commercial premises qualify as solar energy systems equipment, ex…
Do large operable wall partitions installed in hotels and convention centers qualify as a capital improvement, so the installation is exempt from sales tax?
Yes. The partitions are big, heavy, track-mounted structures that effectively replace walls and can't be removed without material damage (becoming inoperable demolition debris), so they meet the three…
Is installing cellulose and spray-foam insulation in homes and commercial buildings subject to New York sales tax?
The installer's charge is not. Installing insulation is a capital improvement (it adds value, is meant to be permanent, and isn't intended to be removed), so the installer's receipts are exempt under …
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…
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 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…
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 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 …
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 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 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…
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 …
Is the charge to install a large water slide at an amusement park a tax-exempt capital improvement, even on leased land?
Yes. The water slide is a capital improvement, so the charge to install it is exempt from sales and use tax. It substantially adds value, is permanently affixed (bolted to concrete piers, with in-grou…
Are incidental repairs during a capital improvement taxable, and does a good-faith capital improvement certificate protect the contractor?
It depends on whether the repair is integral to the capital improvement. Repairs that are part of the improvement -- fixing masonry so a new facade attaches, prepping a subfloor for new flooring, or r…
Must a general contractor pay sales tax on required security/guard monitoring services it buys as part of a capital improvement construction project?
Yes. A general contractor must pay sales tax on protective and detective services -- here, mandated security/building-engineer monitoring of high-risk overnight work -- that it purchases for a capital…
Which solar-farm equipment, installation, and warranties are exempt from NY sales tax when the facility generates electricity for sale?
Equipment used directly and predominantly to generate electricity for sale is exempt under Tax Law 1115(a)(12)/1105-B, and the production process ends at the inverter. Exempt: solar panels, racks, com…
Does a scaffolding company charge sales tax on a lump-sum to install, rent, and dismantle temporary pedestrian walkways used with a capital improvement?
It depends on whether the walkway is a 'temporary facility' at a construction site that is a necessary prerequisite to constructing a capital improvement to real property. If it is, the lump-sum charg…
Are a contractor's charges to update a kitchen (new cabinet doors, countertop, sink, molding) a tax-exempt capital improvement?
Yes, when sold as a complete package. A kitchen-update package -- new cabinet doors and drawer fronts, new hardware, new countertop, new sink and faucet, new molding, and painting the cabinet surfaces…
Is selling advertising space on installed displays a taxable service in NY, and are the charges to install, repair, and supply those displays taxable?
The advertising sales are not taxable, but the related installation, repair, and materials charges are. Selling advertising space on digital, backlit, scroll, wrap, and banner displays is not one of t…
Is the service of installing and dismantling scaffolding, safety netting, hoisting equipment, and temporary pedestrian walkways subject to NY sales tax?
It depends on whether the item is a 'temporary facility' and whether the underlying job is a capital improvement. Installing scaffolding, safety netting, hoisting equipment, and temporary pedestrian w…
Are portable-toilet rentals with waste removal exempt from NY sales tax when the customer is performing a capital improvement?
No. Providing portable toilets together with waste removal is a taxable service of maintaining/servicing real property under Tax Law 1105(c)(5), and the capital-improvement exclusion does not reach it…
How does NY sales and use tax apply to a stair and railing manufacturer that also installs its products?
As a fabricator that installs its own product, the company is a contractor. Installing or entirely replacing stairs is generally a nontaxable capital improvement, so its charges to sell-and-install st…
How does NY sales tax apply to a security company's monitoring services, alarm/CCTV equipment, installation, repairs, and its own purchases?
It depends on the service. Monitoring (and other alarm/protective) services are always taxable as 'protective and detective services' under Tax Law 1105(c)(8). For equipment and its installation: if t…
Are niche walls, wall fittings, and paneling installed during a retail store's initial build-out taxable fixtures or nontaxable capital improvements?
They're capital improvements, so they aren't taxable as tangible personal property. The floor-to-ceiling display niche walls, wall fittings, and paneling were installed during the store's initial buil…
How is a custom window fabricator that also installs taxed on materials, fabrication, and installation?
As a contractor. A fabricator that installs its own product is a contractor, and installing complete windows is a capital improvement -- so the charge to furnish and install windows isn't taxable. The…
Is installing window film a taxable service or a nontaxable capital improvement in NY?
It depends on whether it's part of a new/replacement window or applied to an existing one. Applying window film in connection with the original installation or complete replacement of a window is a ca…
Does a contractor owe NY tax on the waste portion of granite/marble/stone slabs used in a capital improvement?
Yes. A contractor's purchase of stone slabs to use in a capital improvement is a taxable retail purchase (sales tax if delivered in NY, use tax if bought outside and used here), and the tax is based o…
Is BP's construction of a wind farm on leased land a capital improvement, and which equipment is exempt?
No, it's not a capital improvement. Because BP installs the equipment on leased land under a lease that keeps title with BP, lets BP move/replace/refurbish it, and requires BP to remove everything (in…
Which wind-farm components and construction services qualify for New York's exemption for electricity-generation machinery?
A commercial wind farm generating electricity for sale is an eligible production activity, so the wind turbines -- rotor blades, hub, nacelle, and tower as a unitary machine -- plus integrally connect…
When a landlord reimburses a commercial tenant for the cost of building out the leased space, does the landlord owe sales or use tax on that reimbursement?
No. A landlord's disbursements from a 'Tenant Fund' to reimburse a commercial tenant for the cost of Initial Alterations (build-out) to the leased premises are not receipts from a sale of tangible per…
Does equipment used in a flywheel energy-storage facility that helps stabilize the electrical grid's frequency qualify for New York's sales tax exemption for machinery used to produce electricity for sale?
No. Equipment in a flywheel-based frequency-regulation facility does not qualify for New York's production exemption because it stores and returns electricity generated by others rather than generatin…
I rent scaffolding, hoisting equipment, and temporary walkways to contractors for construction projects and separately charge for disassembly — is any of this taxable, and can I buy my equipment tax-free for resale?
Taxable rental, exempt equipment purchase. Rentals of scaffolding, hoisting equipment, safety netting, and temporary walkways are always subject to sales tax as a rental of tangible personal property,…
We install closed circuit television/security camera systems for commercial buildings — is our installation charge a taxable sale, or can it qualify as an exempt capital improvement?
It depends on the component. A closed circuit television installer's charges for in-wall/ceiling wiring and cable installed like a building's electrical system can qualify as an exempt capital improve…
We're building a multi-million-dollar custom steam pipeline on our own land to supply a long-term industrial customer — does this construction qualify as an exempt capital improvement, or is it a taxable installation?
Exempt as a capital improvement. A custom-engineered, above-ground steam pipeline that a facility owner builds on its own land to supply an adjacent industrial customer qualifies as an exempt capital …
My property is undergoing state-mandated environmental remediation for old oil-tank contamination -- can I treat the remediation contractor's charges as an exempt capital improvement instead of a taxable maintenance service?
Taxable, with a possible later refund. Environmental remediation work -- excavating and removing petroleum-contaminated soil, installing monitoring wells, and backfilling with clean soil under a state…
As a tenant leasing space in a government-owned airport terminal, do I owe sales tax on a contractor's bill for repairs and maintenance, including the materials the contractor uses -- and does it matter if I buy the materials myself instead?
Fully taxable when the contractor bills for the whole job, but there's a workaround. When JetBlue Airways hires a contractor to repair or maintain its leased terminal space at JFK Airport, the contrac…
My company waterproofs leaking basement wall cracks by injecting a clay-based sealant through drilled holes and covering the crack with a vinyl moisture barrier panel -- is that an exempt capital improvement or a taxable repair to real property under New York sales tax?
Taxable repair, not a capital improvement. A basement waterproofing contractor's method of injecting a clay-based sealant through drilled wall holes and covering the crack with a vinyl moisture barrie…
I manufacture and permanently install baggage-handling systems at airport terminals leased by airlines from government-owned airports -- do I owe New York sales or use tax on the materials, labor, and installation charges?
Usually exempt as a capital improvement, but only with the right paperwork. G&T Conveyor's permanently bolted, custom-built baggage-handling systems installed in airport terminals qualify as capital i…
Is installing point-of-sale cash register systems, related hardware, and power/cabling equipment in retail stores subject to New York sales tax, and does testing the pre-loaded software count too?
Mostly yes. Installing point-of-sale cash registers and computer hardware peripherals is a taxable installation service, and the hardware itself is taxable when sold. Installing UPS power-supply equip…
Is a construction company's use of a leased crane and operator a taxable equipment rental or a nontaxable purchase of a construction service?
It's a service, not a taxable rental — as long as the crane provider keeps dominion and control. Because the crane provider's own employees set up, operate, and tear down the crane, and the provider (…
Is a general contractor's purchase of construction debris removal and dumpster services on a capital-improvement project subject to New York sales tax?
It depends on the service. Construction debris and cleanup removal purchased by a contractor in conjunction with a capital-improvement project is exempt from sales tax (with the right paperwork), but …
Does a company that bolts advertising display/directory units to mall floors owe sales tax on installing them, on selling the advertising space on them, or does it even need to register as a New York sales tax vendor?
The floor-bolted display units are taxable installations of tangible personal property (not exempt capital improvements) since they can be unbolted without material damage, but the company's separate …
Are different types of commercial signs — monument signs, pylon signs, channel letters, backlit letters, electronic displays, banners, and window graphics — taxable installations of tangible personal property, or exempt capital improvements to real property?
It depends on the sign: a monument sign set in a concrete foundation can qualify as a tax-exempt capital improvement, but pylon signs bolted to piers, channel letters, backlit letters, electronic disp…
If a New York government agency owns a building that will have both public (school) and private (residential/retail) uses, is the developer's construction still exempt from sales tax on materials?
Yes. Because the exempt government agency keeps ownership of the whole building, materials that become a permanent part of the structure are sales-tax exempt for both the public-school and private-use…
If a Florida sign manufacturer pays Florida use tax on materials it later installs as a capital improvement in New York, can it get a credit against the New York use tax it owes on the same materials?
Yes, but only for materials installed as an actual New York capital improvement, only if the tax was legally due and actually paid to Florida (not merely assessed), and only up to the amount of New Yo…
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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.