Is a public university's mandatory annual vehicle registration fee taxable when the same fee also lets the registrant park on campus?

Plain-English summary

A State University of New York (SUNY) campus requires all faculty, staff, and students to register their vehicles and pay a $9.65 annual fee. The fee is set to cover the cost of registration (hang tags, processing), is accounted for separately from parking-meter and paid-lot revenue — but the registration permit also lets the holder park on campus without paying a further fee. The campus asked whether that registration fee is taxable.

The answer: yes — it's a taxable parking charge.

• § 1105(c)(6) taxes charges for parking, garaging, or storing motor vehicles.
• The campus is an exempt governmental entity (§ 1116(a)(1)), but a government entity's sales of services that private businesses also sell — like parking — are taxable.
• The § 1105(c)(6) exception for public, municipal, or district corporations doesn't apply to SUNY, because the campus is a corporation created under the Education Law (§ 352.1).
• Critically, the campus charges one fee and issues one permit covering both registration and parking. Because the single fee confers parking privileges, the whole registration fee is taxable — the Department treated it as a parking charge, not a separable non-taxable registration cost.

What this means for you

Being a government or nonprofit entity doesn't exempt what you sell. SUNY is exempt as a purchaser, but when it provides a service that private operators also provide — parking is the classic example — it must collect sales tax on that service.

Bundling a taxable privilege into a "fee" makes the whole fee taxable. The label "registration fee" didn't save it, because the same fee bought parking. If a charge you call something else actually confers a taxable service, expect the Department to tax it. Where feasible, a genuinely separate, separately administered charge for a non-taxable item is what keeps it distinct — but a single combined fee that includes parking will be taxed as parking.

Public universities and similar entities should review permit/fee structures. If one permit both registers and parks a vehicle, the parking tax likely reaches the entire fee.

Common questions

Q: SUNY is tax-exempt — why does it have to charge tax?
A: The § 1116(a)(1) exemption covers SUNY's own purchases. It does not exempt SUNY's sales of services that private businesses also sell, such as parking, which are taxable under § 1105(c)(6).

Q: Would a pure registration fee, with no parking, be taxable?
A: The opinion taxed this fee because the single fee and permit also conferred parking privileges. Its reasoning turns on that combination, not on registration alone.

Q: Does the § 1105(c)(6) exception for municipal corporations help SUNY?
A: No. SUNY is a corporation created under the Education Law (§ 352.1), so the exception for public, municipal, or district corporations does not apply to it.

Citations and references

Statutes and regulations:

• Tax Law § 1105(c)(6) — taxes parking, garaging, and storing motor vehicles
• Tax Law § 1116(a)(1) — exempts New York governmental entities (as purchasers)
• Education Law § 352.1 — establishes the SUNY campus as a corporation under the Education Law
• 8 NYCRR Part 572 — SUNY campus vehicle registration and parking regulations

Related Department opinions cited: TSB-A-10(8)S and TSB-A-00(4)S — parking-service taxation.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2010.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a10_16s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Counsel
Advisory Opinion Unit

TSB-A-10(16)S
Sales Tax
April 16, 2010

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S100316D

On March 16, 2010, the Department of Taxation and Finance received a Petition for Advisory
Opinion from name and address redacted. Petitioner asks whether fees collected from faculty, staff, and
students for the purpose of registering their motor vehicles are subject to sales tax.
We conclude that Petitioner’s vehicle registration fees, which encompass vehicle registration for
both the purpose of controlling vehicles on campus and parking privileges, are subject to sales tax.
Facts
Petitioner charges a $9.65 annual registration fee for all vehicles parked on campus. All faculty,
staff, and students are required to register motor vehicles annually with the campus parking office. The
revenue generated from the registration fee is intended to cover the cost of registrations, hang tags and
related processing costs. Petitioner submitted a “Parking Permit Analysis,” based on 2007-2008 costs, that
details the expenses of the registration program, and computes the $9.65 annual fee on the basis of these
expenses.
The registration fees are collected and accounted for in a separate account from parking revenue
generated from parking meters and paid parking lots. In general, however, the registration fee entitles the
registrant to park on campus without payment of an additional fee.
Regulations were enacted relating to the regulation of parking and traffic on Petitioner’s campus.
See 8 NYCRR Part 572. These regulations in pertinent part provide:
§ 572.2 Vehicle registration.
(b) The on-campus registration of motor vehicles shall be in accordance with procedures approved by the
chief administrative officer, or designee, for faculty, staff, students and visitors. Such motor vehicle
registration shall take place at the campus parking office upon payment of any fee as approved by the
chancellor or designee.
(c)
(1) Faculty, staff, and student vehicles. Upon completion of the vehicle registration form and
payment of the required fee(s), a vehicle registration permit is issued to faculty, staff, and students.
(2) All faculty, staff, and students are required to register motor vehicles annually with the campus
parking office….
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TSB-A-10(16)S
Sales Tax
April 16, 2010

-2§ 572.5 Vehicle permits.

(a) A motor vehicle permit must be affixed to the vehicle for which issued in accordance with printed
instructions issued with the permit.
(b) Permits are issued for the term indicated unless association with the university terminates at an earlier
date. Mutilation, theft or other disposition of a permit must be reported promptly to the campus parking
office.
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(d) Vehicle registration permits and/or replacements will be provided only after the appropriate fee, as
approved by the Chancellor, or designee, has been paid. This fee is applicable to all permits issued during the
year September 1st to August 31st by the campus parking office.
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§ 572.7 Parking.
(a) Parking is prohibited on all roadways unless otherwise posted.
(b) Possession of a motor vehicle permit entitles the holder to park only if there is available space in the
allotted parking areas. The university does not guarantee a parking space.
(c) Faculty, staff and students must display a valid permit.
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(m) Parking fees as approved by the Chancellor or designee, shall be charged for motor vehicles parked
within designated lots, consistent with applicable collective bargaining agreements and in accordance with
guidelines established by the Chancellor or designee. Such guidelines shall provide that the determination of
the amount of the fee be substantially based on an analysis of the costs attributable to the operation and
maintenance of the parking facilities owned and operated by the State University at name of city redacted.
Analysis
Petitioner, as part of the State University of New York, is a corporation created in the State
Education Department and within the University of the State of New York, under the Board of Regents.
Thus, Petitioner is an exempt governmental entity under Section 1116(a)(1) of the Tax Law. However, a
governmental entity’s sales of tangible personal property or services of a kind ordinarily sold by private
persons are subject to sales tax. A governmental entity’s parking services are of a kind ordinarily sold by
private persons, and are subject to tax under Section 1105(c)(6) of the Tax Law. Because Petitioner is a
corporation created under the Education Law (See Education Law §352.1), the exception from the imposition
of the sales tax for public, municipal, or district corporations, as provided in Section 1105(c)(6), does not
apply to Petitioner.
Petitioner has adopted regulations to enforce campus rules relating to parking, vehicular and
pedestrian traffic, and safety, including provisions for the payment of fees for the registration or parking of

-3-

TSB-A-10(16)S
Sales Tax
April 16, 2010

vehicles. According to Petitioner’s traffic and parking regulations, when a person pays to register his or her
vehicle with Petitioner, that person is also entitled to park on the campus of Petitioner. This is evidenced by
the fact that the owner of a vehicle pays a single fee to register a motor vehicle with Petitioner, and Petitioner
then issues a permit to the owner of the vehicle. That permit, when properly displayed, confers the right to
park in the appropriate (student, faculty, staff, etc.) designated areas on the campus. Petitioner does not
charge two separate and distinct fees for registration and parking, and does not require separate permits for
registration and parking. Petitioner’s single fee for both vehicle registration and parking confers parking
privileges for the registered vehicles. Therefore, the vehicle registration fee is subject to sales tax
under Section 1105(c)(6) of the Tax Law. See TSB-A-10(8)S, Adv Op Comm T&F, February 25, 2010;
TSB-A-00(4)S, Adv Op Comm T&F, January 28, 2000.

DATED: April 16, 2010

NOTE:

/S/
Jonathan Pessen
Director of Advisory Opinions
Office of Counsel

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.