For an event-production company that rents AV/staging equipment and provides setup labor, planning, and decor services for corporate events, which charges are subject to New York sales tax?

Plain-English summary

Creative Staging Services, Inc. is an event-management company that supplies audio, visual, and computer equipment, staging, lighting, and decor for corporate events like shareholder meetings and conferences, plus the labor (teamsters, electricians, carpenters, stagehands) to set it up, run it, and tear it down. Its invoices break charges into "Equipment Rental," "Labor," "Travel & Living," and "Equipment Transportation" categories, with equipment charges typically the largest share.

The Department addressed each category separately:

• Equipment rentals (audio, visual, lighting, staging, computer equipment): Taxable as sales of tangible personal property, but only when the equipment is delivered to a location WITHIN New York — New York's sales tax is a "destination tax," so out-of-state deliveries aren't subject to New York tax at all.
• Equipment transportation/delivery charges: Part of the taxable equipment-rental receipt, whether or not separately stated and regardless of who actually does the shipping.
• Operators provided with equipment, for an additional fee: Not a taxable service by itself, so the separately stated, reasonable operator charge (reflecting prevailing wage rates) is exempt.
• Setting up (installing) equipment: A taxable service on its own. But dismantling/tearing down equipment is NOT an enumerated taxable service. The catch: if Creative Staging charges ONE combined price for setup AND teardown together, the entire combined charge becomes taxable, since mixing a taxable and nontaxable item into a single price means tax applies to the whole thing.
• Preproduction planning (use and placement of AV equipment): Not an enumerated taxable service. If a customer could purchase this planning service on its own, separate from renting the equipment, and it's separately stated and reasonable, it's exempt.
• Decor selection and design (beyond mere rental/installation of decor materials): This is interior decorating/design service, which IS separately taxable under § 1105(c)(7) — though separately stated NYC-delivered charges for this service escape the NYC local tax specifically, per a 1995 repeal of that local tax.
• Travel & living expenses (hotels, gratuities, taxis, parking, train travel): These are Creative Staging's own costs of doing business, not separate services sold to the client. If they're incurred in providing TAXABLE property/services, the reimbursement is part of the taxable receipt; if incurred providing NONTAXABLE services, the reimbursement isn't taxed; and a single charge covering both taxable and nontaxable expense categories is fully taxable.

What this means for you

Event production, AV rental, and staging companies

Structure your invoices carefully: keep setup and teardown as SEPARATE line items (combining them makes the whole thing taxable), price equipment operators separately at prevailing wage rates to keep that charge exempt, and make sure preproduction planning is genuinely purchasable on its own if you want it treated as a nontaxable service.

Corporations and event planners hiring production companies

Ask whether equipment will be delivered within New York — out-of-state delivery avoids New York tax on the rental — and expect any decor/design selection work (as opposed to simple rental/installation of decor items) to carry its own separate sales tax.

Accountants and tax professionals

This ruling is a comprehensive template for classifying an event-production invoice line by line: rental (taxable, destination-sourced), setup (taxable) vs. teardown (nontaxable) — watch the bundling trap — operators (exempt if separately stated and reasonable), planning (exempt if independently purchasable), decor design (separately taxable under § 1105(c)(7), with an NYC local-tax carve-out), and expense reimbursements (taxability follows the underlying service).

Common questions

Q: Is renting AV and staging equipment for an event taxable in New York?
A: Yes, if the equipment is delivered to a location within New York. Equipment delivered outside New York isn't subject to New York sales tax at all, since sales tax is sourced to the delivery destination.

Q: Is a combined charge for setting up AND tearing down equipment taxable?
A: Yes, the entire combined charge is taxable. Setup (installation) is a taxable service on its own, but tearing down equipment isn't — however, bundling a taxable and nontaxable item into one price makes the whole thing taxable.

Q: Are travel and living expenses billed to a client taxable?
A: It depends on what service those expenses relate to — reimbursement for expenses tied to a taxable service/property is part of the taxable receipt, while expenses tied to a nontaxable service aren't taxed, and mixing both into one charge makes the whole reimbursement taxable.

Q: Can another event-production company rely on this exact ruling?
A: No. This Advisory Opinion binds the Department only as to Creative Staging Services, Inc. and the facts and invoice structure it described. A company with different billing practices should confirm its own treatment.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(3) (definition of receipt)
• Tax Law § 1101(b)(5) (definition of sale, including rentals and leases)
• Tax Law § 1101(b)(6) (definition of tangible personal property)
• Tax Law § 1105(a) (imposition of sales tax on retail sales)
• Tax Law § 1105(c)(3) (installing, maintaining, servicing, or repairing tangible personal property)
• Tax Law § 1105(c)(7) (interior decorating and design services)
• 20 NYCRR 525.2(a)(3), 526.5, 526.7(e)(6), 527.1(b), 527.5(a)

Prior opinions and guidance cited:

• 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
• Landmark Event Services, Inc., Adv Op Comm T&F, September 3, 2003, TSB-A-03(35)S
• Repeal of New York City's Sales Tax on Interior Decorating and Design Services, TSB-M-95(13)S, December 1, 1995

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2007.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a07_17s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-07(17)S
Sales Tax
June 26, 2007

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

PETITION NO. S031124A

On November 24, 2003, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Creative Staging Services, Inc., Building 1, Suite 5, Rotterdam Industrial
Park, Schenectady, NY 12306.
The issue raised by Petitioner, Creative Staging Services, Inc., is whether charges to its
customers for labor provided with the event services described below are subject to New York
State sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner is an event-management organization providing the necessary audio, visual,
and computer equipment for clients to conduct events, such as shareholders’ meetings,
management conferences, security analyst meetings, and numerous special events. Petitioner
provides the planning, design, and labor required to implement an audiovisual presentation.
Petitioner incurs costs for labor to help set up, operate, and disassemble its audio, visual, and
computer equipment, stages, lighting, and decor used in such events.
The labor Petitioner provides includes teamsters, electricians, carpenters, and stagehands.
Petitioner provides services primarily in the United States and at times at international locations.
Petitioner contracts for labor, and the cost varies depending on where services are provided.
Petitioner’s clients often request breakdowns on Petitioner’s invoices of fees, equipment rentals,
and labor.
Sample invoices submitted by Petitioner show charges separated into several categories:
“Equipment Rental,” “Labor,” “Travel & Living,” and “Equipment Transportation.” Within the
Equipment Rental category, charges are detailed for various types of audio, video, lighting,
staging, and computer equipment and tents. The Labor category includes preproduction and on­
site production coordinators; audio, video, computer, and lighting operators; graphic artists;
videographers; and local labor, also listed as stagehand or set up/strike/tear down crew. The
category of Travel & Living includes expenses for hotels, per diems, gratuities, train travel, taxis,
and parking. Equipment Transportation refers to charges for transporting the equipment to the
job site. The services described above were detailed on the sample invoices, and in each
instance, the charges for equipment provided represented the major portion of the charges to the
client.
Applicable law and regulations
Section 1101(b) of the Tax Law provides, in part:

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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:
*

*

*

(3) Receipt. The amount of the sale price of any property and the charge
for any service taxable under this article . . . without any deduction for expenses
or early payment discounts 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. . . .
*

*

*

(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.
*

*

*

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

*

*

(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.
*

*

*

(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, in part:
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

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property or service is delivered, or the point at which possession is transferred by
the vendor to the purchaser or his designee.
*

*

*

(6) When a lease of equipment includes the services of an operator, possession is
deemed to be transferred where the lessee has the right to direct and control the use of the
equipment. The operator’s wages, when separately stated, are excludible from the receipt
of the lease, provided they reflect prevailing wage rates.
Section 527.1(b) of the Sales and Use Tax Regulations provides, in part:
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.
Section 527.5(a) of the Sales and Use Tax Regulations provides, in part:
Imposition. (1) The tax is imposed on receipts from every sale of the services of
installing, maintaining, servicing or repairing tangible personal property, by any means
including coin-operated machines, whether or not any tangible personal property is
transferred in conjunction with the services.
(2) Installing means setting up tangible personal property or putting it in place for
use.
Opinion
Petitioner provides all necessary audio and visual equipment, lighting, staging, tents, and
computer equipment for clients to conduct various events. Petitioner plans and designs an
event’s equipment needs, rents the equipment needed, and provides the labor necessary to
implement the plans. Petitioner’s invoices to its clients individually itemize the equipment
rentals and services provided.
Rentals are included within the definition of “sale, selling or purchase,” under section
1101(b)(5) of the Tax Law. Therefore, rentals by Petitioner of audio and visual equipment,
lighting, staging, tents, and computer equipment are considered sales of tangible personal
property and are subject to tax under section 1105(a) of the Tax Law. Petitioner’s charges to
customers for transportation or delivery of the equipment are part of the total receipt from the
rental of the tangible personal property. Under the provisions of section 1101(b)(3) of the Tax
Law and section 526.5 of the Sales and Use Tax Regulations, shipping or delivery charges are
part of the receipt. However, the receipts from rental of equipment are subject to State and local
sales tax when the equipment is delivered to a location within New York State. If the equipment

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is delivered to a location outside New York State, the receipts from the rental are not subject to
New York State or local sales tax. See sections 525.2(a)(3) and 526.7(e) of the Sales and Use
Tax Regulations.
Petitioner may provide, at an additional charge, the services of an operator in conjunction
with its equipment rentals. This service is not one of the enumerated services subject to tax.
Therefore, the charge for this service is not subject to tax as long as it is separately stated and
reasonable (for example, the charge reflects prevailing wage rates). See section 526.7(e)(6) of
the Sales and Use Tax Regulations.
The service of setting up (installing) equipment is a taxable service under section
1105(c)(3) of the Tax Law. However, the service of dismantling equipment is not an enumerated
service subject to sales tax under section 1105(c) of the Tax Law. When tangible personal
property composed of taxable and exempt items is sold as a single unit, the sales tax must be
collected on the total price (see section 527.1(b) of the Sales and Use Tax Regulations). This rule
applies 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.
Therefore, Petitioner’s single charge to a customer for setting up and dismantling equipment is
subject to tax.
Petitioner bills its clients for preproduction planning the use and placement of the audio
and visual equipment needed for a presentation at an event. These services are not among the
enumerated services that are subject to sales tax under section 1105(c) of the Tax Law.
Petitioner separately states the charge for this service. If this service may be purchased from
Petitioner separately from the rental of the equipment and if the charge is separately stated and
reasonable, the charge is not subject to tax. Therefore, if Petitioner’s customers may purchase
the preproduction planning service without also renting the equipment, the charges for the
separate sales of preproduction services are not subject to tax, if separately stated and reasonable.
Another element of Petitioner’s event services involves selecting and designing the decor
for the event. To the extent Petitioner’s services relating to the decor go beyond the rental and
installation of the materials and involve selecting the decor or designing the layout of the decor,
such services 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 Landmark Event
Services, Inc., Adv Op Comm T & F, September 3, 2003, TSB-A-03(35)S. Assuming separate
sales of such services, separately stated charges for the provision of interior decorating and
design services delivered in New York City are not subject to the local New York City sales tax.
See Technical Services Bureau Memorandum, entitled Repeal of New York City’s Sales Tax on
Interior Decorating and Design Services, December 1, 1995, TSB-M-95(13)S.
Petitioner bills clients for travel and living expenses; e.g., hotels, gratuities, train travel,
taxis, and parking. These items are expenses incurred by Petitioner in performing its services

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and not services sold by Petitioner to its clients. If these expenses are incurred by Petitioner in
providing taxable services or property, the reimbursement Petitioner receives from its customers
for these expenses is part of the total receipt from the sale of taxable property and services. See
section 1101(b)(3) of the Tax Law. If these expenses are incurred by Petitioner in providing
nontaxable services or property, the reimbursement Petitioner receives from its customers for
these expenses is not subject to sales tax. If a single charge is made for an expense item that is
incurred by Petitioner in providing both taxable and nontaxable services or property, the
reimbursement Petitioner receives from its customers for such expense is subject to tax.

DATED: June 26, 2007

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Taxpayer Guidance Division

An Advisory Opinion is issued at the request of a person or entity. It is
limited to the facts set forth therein and is binding on the Department only
with respect to the person or entity to whom it is issued and only if the
person or entity fully and accurately describes all relevant facts. An
Advisory Opinion is based on the law, regulations, and Department
policies in effect as of the date the Opinion is issued or for the specific
time period at issue in the Opinion.