Does an armored car company owe sales tax on separately priced 'cash management services' like ATM cassette loading and deposit counting?

Plain-English summary

Loomis, Fargo & Co. is an armored car company that also sells a menu of separately priced "cash management services": ATM cassette preparation, change order preparation, currency verification, deposit processing, and envelope processing — all essentially counting, verifying, and consolidating cash and checks. Customers can buy the armored car transport service alone, the cash management services alone, or both, each with its own separate price billed separately (presumed reasonable relative to market rates).

New York taxes armored car service specifically as a "protective and detective service" under § 1105(c)(8). But the cash-counting/verification services Loomis Fargo calls "cash management" aren't listed anywhere in the Tax Law's enumerated taxable services — so standing alone, they're not taxable. The key mechanical rule from New York's bundling regulations: when taxable and nontaxable items are sold as ONE package for a single price, the WHOLE price becomes taxable. But that rule only bites when the components are actually bundled together — here, because Loomis Fargo prices and bills its armored car service and its cash management services separately, each is taxed (or not) on its own terms. Only the armored car receipts are taxable; the cash management charges are not.

One more wrinkle worth flagging for any similar route-based service: the SALES TAX RATE that applies to the armored car charge is set by where the protected cash is ULTIMATELY delivered, not by where it's picked up or where the counting happens along the way — so a pickup in one county, counting in a second county, and final bank deposit in a third all funnel into the tax rate of that final delivery location.

What this means for you

Armored car, cash logistics, and cash-counting companies

If you offer both a taxable transport/protective service and non-enumerated back-office services (counting, verifying, reconciling), price and bill them SEPARATELY at reasonable market rates. That structure keeps the non-enumerated services untaxed; bundling everything into one price would drag the whole charge into taxable territory.

Multi-stop, multi-jurisdiction service providers

Remember that for a taxable transport-type service, the applicable tax rate follows the FINAL delivery point, not the pickup point or any intermediate processing location — this matters for any business whose service touches multiple counties or municipalities along a single job.

Accountants and tax professionals

This is a clean application of the bundled-transaction rule (20 NYCRR 527.1(b)) in reverse — showing that separately priced and billed services escape the "one taxable item taints the whole bundle" rule, as long as the separate pricing genuinely reflects market value rather than being an artificial split designed to dodge tax.

Common questions

Q: Is an armored car company's cash-counting service taxable in New York?
A: No, when it's priced and billed separately from the taxable armored car transport service — cash counting/verification isn't an enumerated taxable service on its own.

Q: What if the company charges one bundled price for transport and cash counting together?
A: Then the entire bundled charge would be taxable, under the single-unit bundling rule.

Q: Which locality's tax rate applies to the armored car charge?
A: The rate in effect where the protected items are ultimately delivered, regardless of pickup location or where counting/verification occurs.

Q: Can another armored car or cash logistics company rely on this Advisory Opinion?
A: No. It binds the Department only for the petitioner and facts described; another company's pricing and billing structure should be checked independently.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(3) (receipt definition)
• Tax Law § 1105(c)(8) (protective and detective services; armored car services)
• 20 NYCRR 527.1(b) (taxable/exempt items sold as single unit)

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_43s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-05(43)S
Sales Tax
December 5, 2005

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

PETITION NO. S050623A

On June 23, 2005, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Loomis, Fargo & Co., 2500 Citywest Blvd., #900, Houston, Texas,
77042. Petitioner, Loomis, Fargo & Co., provided additional information pertaining to the
Petition on October 3, 2005.
The issue raised by Petitioner is whether its charges for services it calls "cash
management services" are subject to sales tax.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner is an armored car company that provides several cash management services in
addition to its armored car service.
Petitioner’s cash management services consist of the following services:
1) ATM cassette preparation which consists of unloading an ATM’s cassette, verifying
amounts of individual deposits against what is reported on associated deposit slips,
counting currency, placing cash into the empty ATM cassette, reloading the cassette and
sealing it.
2) Change order preparation which consists of preparing of coin and currency from an
inventory for delivery to a customer’s location.
3) Currency verifying which consists of counting inbound and outbound currency to
verify cash amounts.
4) Deposit processing which consists of counting, verifying and consolidating (wrapping,
banding, rolling) customer deposits for bank or Federal Reserve Bank deposit.
5) Envelope processing which consists of verifying commercial drop envelope deposits,
counting currency, coin and checks and consolidating (wrapping, banding and rolling
currency and coin) for bank deposit.
The armored car service can be purchased with or without a cash management service. A
customer may purchase one or more of the cash management services. Each of the cash

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management services has its own price that is separate from and in addition to the price of the
armored car service. It is presumed for purposes of this Advisory Opinion that the separate
prices for cash management services and armored car service are reasonable in relation to
prevailing market prices.
Applicable law and regulations
Section 1101(b)(3) of the Tax Law defines the term receipt for purposes of Article 28 and
provides, in part:
Receipt. The amount of the sale price of any property and the charge for any
service taxable under this article . . . valued in money, whether received in money or
otherwise, including any amount for which credit is allowed by the vendor to the
purchaser, without any deduction for expenses . . . regardless of whether such charges are
separately stated in the written contract, if any, or on the bill rendered to such
purchaser. . . .
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax on and after June first, nineteen hundred seventy-one,
here 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 . . . armored car services and guard, patrol and watchman services of every
nature . . . whether or not tangible personal property is transferred in conjunction
therewith.
Section 527.1(b) of the Sales and Use Tax Regulations provides:
Taxable and exempt items sold as a single unit. When tangible personal property,
composed of taxable and exempt items is sold as a single unit, the tax shall be collected
on the total price.

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Sales Tax
December 5, 2005

Opinion
Petitioner is an armored car company that also sells services it calls cash management
services. Customers may purchase one or more of these services in addition to the armored car
service. Each of the cash management services has its own price that is separate from and in
addition to the price of the armored car service.
When tangible personal property composed of taxable and exempt items is sold as a
single unit, sales tax is collected on the total price. See section 527.1(b) of the Sales and Use
Tax Regulations. The rule has been extended to sales of taxable and exempt services and sales
of services with tangible personal property. See PricewaterhouseCoopers LLP, Adv Op Comm
T&F, March 25, 2003, TSB-A-03(11)S; Salomon & Leitgeb CPA’s, LLP, Adv Op Comm T&F,
July 23, 1997, TSB-A-97(44)S. In Morton L. Coren, P.C., Adv Op Comm T&F, June 29, 1990,
TSB-A-90(33)S, it was concluded that even though the components of a particular sale could be
separately stated, calculated or estimated, if such components could not be separately purchased,
the combination of items must be considered as one and, thus, subject to sales tax as a single
purchase. See also Penfold v State Tax Commission, 114 AD 2d 696 [1985].
Receipts from the sale of Petitioner’s armored car service are subject to sales tax pursuant
to section 1105(c)(8) of the Tax Law. Considered separately, Petitioner’s cash management
services are not services enumerated in section 1105 of the Tax Law and receipts from the sale of
such services are not subject to sales tax. In accordance with section 527.1(b) of the Sales and
Use Tax Regulations, were Petitioner to charge a single price for all of its services, the entire
receipt would be subject to sales tax. However, in the present case, Petitioner sells its armored
car services separately from its cash management services, and the charges for cash management
services are billed separately from the charges for armored car services. Thus, only the receipts
for the armored car services are subject to sales tax. See Paul J. Carucci, Adv Op Comm T&F,
October 24, 1990, TSB-A-90(54)S.
The rate of sales tax to be collected by Petitioner on its charges for armored car service is
determined by the rate in effect at the place in which the protected items are ultimately delivered,
regardless of where the items are picked up or where cash management services may occur. For
example, assume Petitioner’s armored car service picks up a customer's daily receipts at the
customer's various stores located in Suffolk County, the receipts are counted and the totals
verified at a counting room in Nassau County and the receipts are then transported for deposit to
the customer's account at its New York City bank. The charges for the cash management service
(counting, verification of deposit amount, etc.) are not subject to tax. The receipt for the armored
car service is taxable at the rate in effect in New York City. See Clearview Cinemas – CCG

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December 5, 2005

Holdings, Inc., Adv Op Comm T&F, June 22, 2005 TSB-A-05(22)S; Cobert Banking Courier
Corp., Adv Op Comm T&F, December 16, 1996, TSB-A-96(78)S.

DATED: December 5, 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.