Does New York's under-$110 clothing exemption apply to fabric sold by the yard, when the total purchase costs $110 or more even though each individual yard costs less?

Plain-English summary

An accountant asked the Department to confirm how New York's under-$110 clothing exemption applies to a fabric store selling 5 yards of $50-per-yard fabric — first as a plain retail sale, and second where the customer plans to use the fabric to make eight separate pieces of one multi-part garment.

New York's clothing exemption (for clothing, footwear, and components like fabric, thread, and buttons that become a physical part of clothing) applies per item, where the item costing less than $110 is exempt. The Department held that the relevant "item" here is the fabric as actually sold — the whole 5-yard purchase — not each individual yard, and not each of the eight garment pieces the customer eventually plans to cut it into. Since 5 yards at $50 per yard comes to $250, well above the $110 cap, the entire fabric purchase is taxable, regardless of the fact that a single yard alone (at $50) would fall under the cap, and regardless of how many separate pieces the fabric will eventually become.

What this means for you

Fabric, yarn, and craft-supply retailers

The $110 clothing/footwear exemption cap is measured against the transaction as it's actually sold — the total charge for the item purchased — not against some smaller conceptual unit like price-per-yard or the number of finished pieces the customer intends to make. If a customer buys multiple yards in one purchase and the total exceeds $110, charge tax on the whole thing.

Accountants and tax professionals

This opinion is a clean illustration of the "per item as sold" rule under TSB-M-00(1)S: the exemption doesn't get more generous by slicing a single purchase into smaller conceptual units (whether by unit of measure, like yards, or by the customer's intended end use, like a multi-part garment). The full purchase price of the item as transacted is what's tested against the $110 threshold.

Common questions

Q: If I buy fabric priced under $110 per yard, is my whole purchase exempt regardless of how many yards I buy?
A: No. The $110 cap applies to the total cost of the item as purchased, not to the per-yard price. If your total purchase is $110 or more, the whole amount is taxable.

Q: Does it matter that the fabric will be cut up into several pieces for one finished garment?
A: No. The exemption is tested against the fabric as sold in a single transaction, not against the number of pieces it will eventually become.

Q: Can other fabric retailers rely on this ruling?
A: No. This advisory opinion binds the Department only for Roy Hoffmann, CPA on the facts described, though the underlying "per item as sold" rule reflects the Department's general published guidance (TSB-M-00(1)S) on the clothing exemption.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(15) (definition of "clothing and footwear," incl. fabric, thread, yarn, and like items)
• Tax Law § 1115(a)(30) (clothing and footwear exemption for items under $110)
• TSB-M-00(1)S, Jan. 24, 2000 (Sales and Use Tax Exemption on Clothing, Footwear, and Items Used to Make or Repair Exempt Clothing)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2001.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a01_10s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-01(10)S
Sales Tax
April 12, 2001

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S000911A

On September 7, 2000, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Roy Hoffmann, CPA, 855 6th Avenue, Suite 501, New York, NY 10001.
The issue raised by Petitioner, Roy Hoffmann, CPA, is whether the sales tax exemption on
clothing applies to the sale of fabric described in the following situations:

1. A business that sells yarn, fabric, and thread, sells 5 yards of a $50.00 per yard fabric to
   a customer.
2. A business sells 5 yards of a $50.00 per yard fabric, where the customer will use such
   fabric to make 8 parts of a multi-fabric item.
   Applicable Authority
   Section 1101(b) of the Tax Law provides, in part:
   When used in this article for the purposes of the taxes imposed by
   subdivisions (a), (b), (c) and (d) of section eleven hundred five and by section eleven
   hundred ten, the following terms shall mean:
   *

*

*

(15) Clothing and footwear. (i) Clothing and footwear to be worn by human
beings, but not including costumes or rented formal wear, and (ii) fabric, thread, yarn,
buttons, snaps, hooks, zippers and like items which are used or consumed to make
or repair such clothing (other than such costumes or rented formal wear) and which
become a physical component part of such clothing, but not including such items
made from pearls, precious or semi-precious stones, jewels or metals, or imitations
thereof.
Section 1115 of the Tax Law provides, in part:
(a) Receipts from the following shall be exempt from the tax on retail sales
imposed under subdivision (a) of section eleven hundred five and the compensating
use tax imposed under section eleven hundred ten:

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TSB-A-01(10)S
Sales Tax
April 12, 2001

*

*

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(30) Clothing and footwear for which the receipt or consideration given or
contracted to be given is less than one hundred ten dollars per article of clothing, per
pair of shoes or other articles of footwear or per item used or consumed to make or
repair such clothing and which becomes a physical component part of such clothing.
Technical Services Division Memorandum entitled Sales and Use Tax Exemption on
Clothing, Footwear, and Items Used to Make or Repair Exempt Clothing, January 24, 2000,
TSB-M-0(1)S announced an amendment to the Tax Law with respect to the imposition of sales tax
on clothing, footwear and other items used or consumed to make or repair such clothing.
TSB-M-00(1)S provides, in part:
Beginning March 1, 2000, clothing and footwear costing less than $110 per
item is exempt from the 4% New York State sales and compensating use taxes. This
exemption does not apply to any locally imposed sales and use taxes unless the
county or city imposing those taxes elects to provide for it. . . .
The exemption applies only to clothing and footwear worn by humans. It also
applies to most fabric, thread, yarn, buttons, snaps, hooks, zippers, and like items
which become a physical component part of exempt clothing used to make or repair
exempt clothing. . . .
*

*

*

The article of clothing or footwear (per pair) must be sold for less than $110.
This “less than $110" limitation also applies to each item of fabric, thread, yarn,
buttons, snaps, hooks, zippers and like items which become a physical component
part of exempt clothing or are used to make or repair the exempt clothing. . . .
(emphasis added)
Opinion
Pursuant to Section 1101(b)(15) of the Tax Law the term “clothing and footwear” includes
fabric, thread, yarn, buttons, snaps, hooks, zippers and like items which are used or consumed to
make or repair such clothing and which become a physical component part of such clothing. In
accordance with Section 1115(a)(30) of the Tax Law and TSB-M-00(1)S, supra, the exemption for
clothing, footwear and other items used or consumed to make or repair such clothing costing less
than $110 applies on a per item basis. Therefore, regardless of whether the cost per yard of fabric
is less than $110 or the fabric purchased will be one part of an eight-part multi-fabric item, the
fabric purchased will be subject to sales and compensating use taxes if the total cost for the amount

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Sales Tax
April 12, 2001

of fabric purchased as a single item is $110 or more. Accordingly, where a customer purchases 5
yards of a fabric as a single item at $50 per yard, the total cost will be more than $110. Therefore,
the purchases described in the above questions will be subject to sales and compensating use taxes
and the exemption under Section 1115(a)(30) of the Tax Law will not apply.

DATED: April 12, 2001

NOTE:

/s/
Jonathan Pessen
Tax Regulation Specialist III
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.