Is a movie theater company's purchase of armored courier service to transport cash receipts subject to New York sales or use tax?

Plain-English summary

A movie theater operator with locations in New Jersey and New York uses its bank's armored courier service to pick up daily cash receipts. Each cash bag is barcoded with its counted amount, scanned on pickup (immediately crediting the theater's account), routed through a New Jersey cash depot along with receipts from other businesses, and finally delivered to and recounted at the bank's facility in Long Island City, New York. The theater asked whether it owes New York sales or use tax on this courier service.

New York specifically taxes "protective and detective services," a category that expressly includes armored car and bonded courier services. The Department confirmed the theater's purchase of this service is taxable -- and the key rule is that armored car/courier services are taxed based on where the protected property is ultimately delivered, not where it's picked up. Since the cash bags are eventually delivered to the Bank of New York's facility in New York State, the theater owes New York sales and use tax on the courier charge at the rate applicable there, even though the cash originates at out-of-state (New Jersey) theaters and passes through an out-of-state depot along the way.

What this means for you

Businesses using armored courier or cash-transport services

The taxability and applicable local rate depend on where the cash (or other protected property) is ultimately delivered, not where your business is located or where the pickup happens. A multi-state operation should track final delivery points, not pickup points, to determine New York tax exposure.

Banks and courier companies serving multi-state business customers

Structure your billing to reflect the actual delivery destination of each shipment, since that's the fact the Department and courts (per the cited Cobert Banking Courier precedent) look to in determining tax on armored car and bonded courier charges.

Accountants and tax professionals

This is a clean, narrow rule: place-of-delivery, not place-of-pickup, governs both whether New York tax applies and at what local rate, for armored car/courier and similar protective services under Tax Law § 1105(c)(8) and TSB-A-96(78)S.

Common questions

Q: Is armored car or courier service taxable in New York?
A: Yes -- it's an enumerated "protective and detective service" under Tax Law § 1105(c)(8), taxable when the protected property is delivered to a New York location.

Q: Does it matter that the cash originates at out-of-state locations?
A: No -- the tax turns on where the property is ultimately delivered, not where it's picked up.

Q: What if the cash passes through an out-of-state depot along the way?
A: That intermediate stop doesn't change the analysis -- what matters is the final delivery point.

Q: What rate applies if delivery happens in New York?
A: The combined state and local rate applicable at the actual place of delivery in New York.

Citations and references

Statutes and guidance:

• Tax Law § 1105(c)(8) (protective and detective services)
• Tax Law § 1110(a) (compensating use tax)
• TSB-A-96(78)S (Cobert Banking Courier Corp., Dec. 16, 1996)
• Important Notice N-90-20 (New York State Sales and Use Tax on Protective and Detective Services)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2005.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a05_22s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-05(22)S
Sales Tax
June 22, 2005

Office of Tax Policy Analysis
Technical Services Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S040526B

On May 26, 2004, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Clearview Cinemas - CCG Holdings, Inc., 97 Main Street, Chatham,
New Jersey, 07928. Petitioner, Clearview Cinemas - CCG Holdings, Inc., provided additional
information pertaining to the Petition on June 30, 2004.
The issue raised by Petitioner is whether its purchases of armored courier services are
subject to New York State and local sales or use tax.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner operates several motion picture theaters in New Jersey and New York.
Petitioner’s bank (Bank of New York) provides armored courier service to pick up and transport
the cash receipts from Petitioner’s theaters. The receipts are counted by Petitioner’s employees
and a bar code is attached to each cash bag showing the amount of receipts contained in the bag.
Upon pick up, the cash bag bar codes are scanned by the armored courier and the amount is
immediately credited to Petitioner’s account in the Bank of New York. The cash bags are then
delivered to a New Jersey cash depot and subsequently transported, with cash receipts from other
businesses which have been delivered to the cash depot, to the Bank of New York in Long Island
City, New York, where they are counted. If there are any discrepancies between the amount
scanned at the theater and the amount counted, necessary adjustments are made to Petitioner’s
account by the bank.
Applicable law
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax On and after June first, nineteen hundred seventy-one,
there is hereby imposed and there shall be paid a tax . . . upon:
*

*

*

(c) The receipts from every sale, except for resale, of the following services:
*

*

*

(8) Protective and detective services, including, but not limited to, all services
provided by or through alarm or protective systems of every nature, including, but not
limited to, protection against burglary, theft, fire, water damage or any malfunction of

-2­
TSB-A-05(22)S
Sales Tax
June 22, 2005

industrial processes or any other malfunction of or damage to property or injury to
persons, detective agencies, armored car services and guard, patrol and watchman
services of every nature other than the performance of such services by a port watchman
licensed by the waterfront commission of New York harbor, whether or not tangible
personal property is transferred in conjunction therewith.
Section 1110(a) of the Tax Law provides in part:
Except to the extent that property or services have already been or will be subject
to the sales tax under this article, there is hereby imposed on every person a use tax for
the use within this state on and after June first, nineteen hundred seventy-one except as
otherwise exempted under this article . . . (C) of any of the services described in
paragraphs one, seven and eight of subdivision (c) of section eleven hundred five . . . .
Opinion
In this case, Petitioner’s bank (Bank of New York) provides armored courier service to
pick up and transport the cash receipts from Petitioner’s theaters to Petitioner’s bank. The bank
charges Petitioner for this service. Pursuant to sections 1105(c)(8) and 1110(a)(C) of the Tax
Law, protective and detective services are subject to the New York State and local sales and use
taxes. Protective and detective services include armored car and bonded courier services. (See
Important Notice entitled New York State Sales and Use Tax on Protective and Detective
Services, N-90-20.)
The application of the tax to armored car services and the services of bonded couriers is
determined by the place in which the items protected are delivered, regardless of where the items
are picked up. See Cobert Banking Courier Corp., Adv Op Comm T & F, December 16, 1996,
TSB-A-96(78)S.
Accordingly, Petitioner's purchases of armored courier service are subject to the
New York State and local sales and use taxes at the applicable tax rate where Petitioner’s
property is delivered to the Bank of New York located in New York State.

DATED: June 22, 2005

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.