Does a trade show and special events decorating contractor owe New York sales tax on its design, set-building, staging, and decorating services, and on the props/materials it provides — and does it owe New York City's separate local tax on top of the state tax?

Plain-English summary

Landmark Event Services designs and builds displays, sets, staging, lighting/sound, signage, and decorating (floral design, draperies, etc.) for corporate events, trade shows, award ceremonies, product launches, fashion shows, political functions, and annual meetings — sometimes also renting items like tables as part of the set. It doesn't provide food or catering. The company asked whether its services are taxable, and whether its purchases of the materials it uses qualify for the resale exclusion.

The Department confirmed both halves of the business are taxable when delivered in New York: (1) the tangible items (sets, displays, floral arrangements, and similar props) provided as part of the job are taxable sales of tangible personal property under § 1105(a), and (2) all the company's design/production services — decorating, layout, furniture/fixture selection and arrangement — fall within New York's specifically enumerated "interior decorating and design services" tax (§ 1105(c)(7)), which by regulation and a 1990 Department notice expressly reaches convention and special-events decorators.

But there's a New York City wrinkle: NYC's own separate local tax on interior decorating/design services was repealed in 1995. So when the contractor's services and property are delivered in the City: if the decorating/design services are billed as one bundled charge with the tangible property, the entire charge is subject to both State and City tax; but if the services are contracted for and invoiced separately from the property, with the service charge reasonable and separately stated, that services portion is subject only to State sales tax (including the MCTMT district's quarter-percent), not the City tax — while the tangible property itself remains subject to both State and City tax either way.

Geography also matters independent of all this: sales tax is a "destination tax," so if the contractor delivers property and performs services entirely outside New York State, none of it is taxable regardless of where the client is headquartered. And the company can buy its production materials tax-free "for resale" only to the extent those materials are actually transferred to the client (as-is or as a component of something built for the client) — anything it uses itself without transferring to the client (e.g., equipment it keeps and reuses) is a taxable purchase for the company's own use.

What this means for you

Event, trade show, and convention decorating contractors

Your design and staging services are squarely taxable in New York as "interior decorating and design services" — this isn't a gray area the Department is being asked to newly classify, it's a well-established enumerated category that explicitly names convention and special-events decorators.

Contractors working New York City events

Separately contracting for and invoicing your design/decorating services apart from the tangible props and materials can save your client the City's local tax on the service portion — since NYC repealed its own local decorating-services tax in 1995, only bundled billing (or property itself) stays exposed to the City tax.

Businesses buying materials that get transferred to a client

The resale exclusion only covers materials you actually pass along to the client (as-is or built into a set/display); materials or equipment you keep and reuse across multiple jobs are a taxable purchase for your own use, not a resale.

Common questions

Q: Is event/trade show design and decorating a taxable service in New York?
A: Yes — it falls under the enumerated "interior decorating and design services" tax (Tax Law § 1105(c)(7)), which specifically includes convention and special-events decorators.

Q: Does New York City still tax interior decorating and design services separately?
A: No — NYC's own local tax on these services was repealed effective December 1, 1995. Only State tax (plus the MCTMT district surcharge where applicable) reaches decorating/design services billed separately from tangible property.

Q: Do I owe tax if I deliver services and materials entirely outside New York?
A: No — New York's sales tax is a "destination tax" based on where property/services are actually delivered, regardless of the customer's home state or business location.

Q: Can I buy the materials I use in my events tax-free?
A: Only if the materials are actually transferred to your client (as-is or as part of something you build for them) — materials or equipment you keep and reuse yourself are a taxable purchase.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(3) (receipt), § 1101(b)(4)(i) (retail sale; resale exclusion), § 1101(b)(5) (sale/selling/purchase), § 1101(b)(6) (tangible personal property)
• Tax Law § 1105(a) (retail sales tax), § 1105(c)(3) (installing/maintaining tangible personal property), § 1105(c)(7) (interior decorating and design services)
• 20 NYCRR § 525.2(a)(3) (destination tax rule)
• 20 NYCRR § 526.5 (receipt; shipping/delivery charges), § 526.7(e) (transfer of possession)
• Department Notice N-90-16 (New York State Sales and Use Tax on Interior Decorating and Design Services)
• TSB-M-95(13)S (repeal of NYC's local tax on interior decorating/design services)

Prior rulings referenced:

• J.P. Molyneux Studio Ltd., TSB-A-96(31)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2003.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a03_35s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-03(35)S
Sales Tax
September 3, 2003

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S020809B

On August 9, 2002, the Department of Taxation and Finance received a Petition for Advisory
Opinion from Landmark Event Services, Inc., 8 Francis Pl., Caldwell, NJ 07006.
The issues raised by Petitioner, Landmark Event Services, Inc., are:
(1) Whether services provided as a trade show and special events decorating
contractor are subject to sales tax.
(2) Whether purchases of tangible personal property utilized in providing these
services are excluded from sales and compensating use tax as purchases for resale.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner is a trade show and special events decorating contractor. Petitioner provides
clients with services including display and set building and design, show production, lighting/sound,
sign/graphics, staging, decorating such as floral design and draperies, and other related services.
Petitioner provides these services at the following types of events: corporate events, political
functions, trade shows, award ceremonies, product introductions, fashion shows and annual
meetings. The tangible personal property utilized in providing these services is sold to clients as
such or becomes a component of tangible personal property assembled or fabricated by Petitioner
to be transferred to the client. Petitioner does not provide its clients with food or food services. On
occasion Petitioner rents tables which are provided to the client as part of the set or display.
Applicable Law and Regulations
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:
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*

(3) Receipt. The amount of the sale price of any property and the charge for
any service taxable under this article . . . and also including any charges by the
vendor to the purchaser for shipping or delivery . . . regardless of whether such
charges are separately stated in the written contract, if any, or on the bill rendered to
such purchaser and regardless of whether such shipping or delivery . . . is provided
by such vendor or a third party. . . .

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(4) Retail sale. (i) A sale of tangible personal property to any person for any
purpose, other than (A) for resale as such or as a physical component part of tangible
personal property, or (B) for use by that person in performing the services subject to
tax under paragraphs (1), (2), (3), (5), (7) and (8) of subdivision (c) of section eleven
hundred five where the property so sold becomes a physical component part of the
property upon which the services are performed or where the property so sold is later
actually transferred to the purchaser of the service in conjunction with the
performance of the service subject to tax. Notwithstanding the preceding provisions
of this subparagraph, a sale of any tangible personal property to a contractor,
subcontractor or repairman for use or consumption in erecting structures or
buildings, or building on, or otherwise adding to, altering, improving, maintaining,
servicing or repairing real property, property or land, as the terms real property,
property or land are defined in the real property tax law, is deemed to be a retail sale
regardless of whether the tangible personal property is to be resold as such before it
is so used or consumed, except that a sale of a new mobile home to a contractor,
subcontractor or repairman who, in such capacity, installs such property is not a
retail sale. . . .
(5) Sale, selling or purchase. Any transfer of title or possession or both,
exchange or barter, rental, lease or license to use or consume . . . for a consideration.
...
(6) Tangible personal property.
nature. . . .

Corporeal personal property of any

Section 1105 of the Tax Law imposes sales tax, in part, upon:
(a) The receipts from every retail sale of tangible personal property, except
as otherwise provided in this article.
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(c) The receipts from every sale, except for resale, of the following
services:
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(3) Installing tangible personal property . . . or maintaining, servicing or
repairing tangible personal property . . . not held for sale in the regular course of
business . . . and whether or not any tangible personal property is transferred in
conjunction therewith. . . .
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*

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September 3, 2003
(7) Interior decorating and designing services, (whether or not in conjunction
with the sale of tangible personal property), by whomsoever performed, including
interior decorators and designers, architects or engineers; notwithstanding the
foregoing, such services shall not include services which consist of the practice of
architecture, as defined in section seventy-three hundred one of the education law,
or the practice of engineering, as defined in section seventy-two hundred one of the
education law, if the services are performed by an architect or engineer having a
license or permit under the education law.
Section 525.2(a)(3) of the Sales and Use Tax Regulations provides:
Except as specifically provided otherwise, the sales tax is a "destination tax."
The point of delivery or point at which possession is transferred by the vendor to the
purchaser, or the purchaser’s designee, controls both the tax incidence and the tax
rate.
Section 526.5 of the Sales and Use Tax Regulations provides, in part:
(a) Definition. The word receipt means the amount of the sale price of any
property and the charge for any service taxable under articles 28 and 29 of the Tax
Law, valued in money, whether received in money or otherwise. The following
subdivisions of this section discuss elements of a receipt.
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(e) Expenses. All expenses, including telephone and telegraph and other
service charges, incurred by a vendor in making a sale, regardless of their taxable
status and regardless of whether they are billed to a customer are not deductible from
the receipts.
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(g) Shipping or delivery. (1) Shipping or delivery charges by a vendor to its
customer for the cost of transporting tangible personal property to the customer are
part of the vendor's receipt subject to tax where the sale of the property is subject to
tax or where taxable services were performed on the property. This is so regardless
of whether the vendor separately states such charges in a written contract or on an
invoice and regardless of whether the vendor ships or delivers the property itself or
hires a third party to ship or deliver the property. Similarly, charges by a vendor to
its customer for picking up the customer's property upon which the vendor is to
perform taxable services are part of the vendor's receipt from the sale of the service
subject to tax.
Section 526.7(e) of the Sales and Use Tax Regulations provides:

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Transfer of possession. (1) Except as otherwise provided in paragraph (3) of
this subdivision, a sale is taxable at the place where the tangible personal property
or service is delivered, or the point at which possession is transferred by the vendor
to the purchaser or his designee.
Department of Taxation and Finance Notice entitled New York State Sales and Use Tax on
Interior Decorating and Design Services, N-90-16, provides, in part:
Beginning June 1, 1990, charges for interior decorating and design services
relating to real property located in New York State and any interior decorating and
design services delivered into New York State are subject to state and local sales and
use tax. . . .
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*

Persons required to charge and collect sales tax on interior decorating and
design services include interior decorators, interior designers, interior consultants,
convention or special events decorators, and anyone else who renders such services.
Interior decorating and design services include, but are not limited to: the preparation
of layout drawings; furniture arranging; design and planning of furniture, fixtures
and other furnishing which are not permanently attached to a building or structure;
selection, purchase and arrangement of surface coverings, draperies, furniture,
furnishings and other decorations; or any similar service. (Emphasis added)
New York City’s tax on interior decorating and design services was repealed
by Chapters 297 and 298 of the Laws of 1995, effective December 1, 1995. See
Technical Services Bureau Memorandum Repeal of New York City’s Sales Tax on
Interior Decorating and Design Services, December 1, 1995, TSB-M-95(13)S.
Opinion
A variety of services, beginning with design and following through to production, are
provided by Petitioner as a trade show and special events decorating contractor. The services vary
based on the type of event or trade show. Petitioner is required to provide clients with sets,
lighting/sound, signs/graphics, staging, decorating and other related services needed to create a
presentation for a successful trade show or event.
Displays, sets, floral designs, or other items which are needed for display or to produce the
desired effect of the trade show or event are provided in conjunction with Petitioner’s services. The
provision of such items by Petitioner to the client is considered to be the sale of tangible personal
property subject to New York State and local sales taxes under section 1105(a) of the Tax Law. The
various services provided by Petitioner all constitute interior decorating and design services which
are subject to New York State and local sales taxes pursuant to section 1105(c)(7) of the Tax Law.
See New York State Sales and Use Tax on Interior Decorating and Design Services, N-90-16, supra.

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However, decorating and design services delivered in New York City are not subject to the local
New York City sales tax. See Repeal of New York City’s Sales Tax on Interior Decorating and
Design Services, TSB-M-95(13)S, supra.
Therefore, Petitioner’s charges for services and tangible personal property are subject to
New York State and local sales and use taxes. When these services and property are delivered in
New York City the entire charge is subject to New York City sales and use tax unless the interior
decorating and design services are contracted for separately from the tangible personal property and
the charges for such services are reasonable and separately stated on the customer invoice. See
TSBM-95(13)S, supra; and J.P. Molyneux Studio Ltd., Adv Op Comm T & F, May 22, 1996,
TSB-A-96(31)S. When separately sold, the services of interior decorating and design delivered in
New York City are subject to New York State sales and use tax (including the 1/4% tax imposed on
behalf of the Metropolitan Commuter Transportation District), but are not subject to New York City
sales and use taxes. The tangible personal property is subject to both New York State and New York
City sales and use taxes.
When Petitioner provides services and delivers tangible personal property to a location
outside of New York State, the receipts are not subject to New York State or local sales taxes
regardless of the customer’s business location. See sections 525.2(a)(3) and 526.7(e) of the Sales
and Use Tax Regulations.
Petitioner may make exempt purchases of tangible personal property if the property is
purchased exclusively for resale as such, or as a physical component part of tangible personal
property which will be resold, or exclusively for use in performing a taxable service if such property
becomes a component part of the property on which the service is performed or such property is
transferred to the client in conjunction with the performance of the service. See section
1101(b)(4)(i) of the Tax Law. Petitioner’s purchases of tangible personal property, including rentals
of items such as tables, which are transferred to the client or become a component part of tangible
personal property transferred to the client are exempt purchases for resale, if the property is
purchased exclusively for such purposes. If the items are not transferred to the client and are used
by Petitioner, then Petitioner is required to pay sales or use tax on such purchases.

DATED: September 3, 2003

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

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