When a shopping mall straddles a city and county line, which state and local sales taxes do its stores collect — and what controls when delivery happens elsewhere or a store itself sits on the line?

Plain-English summary

Gaetano Associates Limited Partnership owns a retail outlet mall near Utica that sits in two counties — Oneida (the part also inside the City of Utica) and Herkimer. The mall is a set of connected buildings; all but one building lie wholly in one county, and the one building on the county line has all its stores wholly in Herkimer County. With the City of Utica adopting a new sales tax (Ordinance No. 48, effective June 1, 1982), the partnership asked which sales taxes its stores must collect.

The Department held it depends on the taxing jurisdiction of each store — and, for deliveries, on the point of delivery.

• State tax applies everywhere. Section § 1105(a) imposes the State 4% sales tax on retail sales made anywhere in New York.
• The counties impose no local tax. Neither Herkimer County nor Oneida County (nor their subdivisions) imposes a local sales tax.
• The City of Utica's new 1½% tax. Under Ordinance No. 48 (adopted April 8, 1982; effective June 1, 1982), the City of Utica imposes a 1½% tax on retail sales made within the City.
• So, store by store: stores in the mall located in Herkimer County collect only the 4% State tax; stores located within the City of Utica collect the 4% State tax now and, from June 1, 1982, an additional 1½% City tax.
• Point of delivery controls. Which jurisdiction's tax applies to a given sale is determined by the point of delivery (20 NYCRR § 525.2(a)(3)). If a store makes a sale but delivers the goods elsewhere — e.g., to the customer's home — the applicable tax is that of the jurisdiction where delivery occurs.
• A store on the line. If a single store is itself split by a jurisdiction boundary, a sale is taxed by the jurisdiction where the cash register on which the sale is recorded is located.

What this means for you

Local tax follows the store's jurisdiction, not the mall's. In a development that crosses a city or county line, each storefront collects the state-plus-local rate for the jurisdiction it physically sits in — different stores in the same mall can owe different totals.

Delivery location can change the rate. For goods delivered off-site (to a home or another address), the tax is set by the delivery jurisdiction, not the store's — a key rule for anything shipped or delivered.

A store on the boundary is pinned to its register. If your store straddles a tax line, the location of the cash register that rings up the sale decides which jurisdiction's tax applies.

Common questions

Q: My store is in a mall that crosses a city line. Which local tax do I collect?
A: The one for the jurisdiction your store physically sits in. A store inside the City of Utica adds the City's 1½%; a store outside it (here, in Herkimer County) collects only the 4% State tax.

Q: What if I deliver the goods to the customer's home?
A: The tax is determined by the point of delivery (20 NYCRR 525.2(a)(3)) — the jurisdiction where the customer receives the goods, not where your store is.

Q: My store literally sits on the jurisdiction line. How is a sale taxed?
A: By the jurisdiction where the cash register that records the sale is located.

Citations and references

Statutes:

• Tax Law § 1105(a) — State 4% tax on retail sales of tangible personal property made anywhere in the State

Regulations / local law:

• 20 NYCRR § 525.2(a)(3) — the applicable local tax is determined by the point of delivery
• City of Utica Ordinance No. 48 — 1½% City sales tax, adopted April 8, 1982, effective June 1, 1982

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1982.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a82_18s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-82(18)S
Sales Tax
May 26, 1982

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S820505F

On May 5, 1982, a Petition for Advisory Opinion was received from Gaetano AssociatesLimited Partnership, 311 Turner Street, Utica, New York 13501.
The issue here raised is whether the sales tax imposed in the City of Utica (effective June 1,
1982) will be required to be collected on the receipts from retail sales made in stores contained in
a mall located partly within and partly without the City of Utica.
Petitioner owns a retail outlet mall which is located within two counties, Oneida and
Herkimer. The portion of the mall which is located in Oneida County is also contained within the
City of Utica. The mall consists of a number of separate buildings connected by hallways. Outlet
stores located in the various buildings are leased to commercial tenants and operated as retail
establishments. All but one of the buildings are located wholly within one county or the other. One
of the buildings is divided by the county line, but all of the stores contained in such building are
wholly located in Herkimer County.
Section 1105(a) of the Tax Law imposes the State 4% sales tax on the receipts from retail
sales of tangible personal property made anywhere within the State. No such tax is imposed by
Herkimer County or by any subdivision thereof. Oneida County also imposes no such tax, nor does
the City of Utica. However, pursuant to Ordinance Number 48 of the City of Utica, adopted on April
8, 1982 and effective June 1, 1982, the City of Utica will impose, among others, a tax substantially
similar to that imposed under section 1105(a) of the Tax Law, applicable to retail sales made within
the City of Utica, at a rate of 1½%.
Accordingly, all of the vendors making sales in stores in Petitioner's mall which are located
within Herkimer County must collect only the 4% State sales tax. Vendors making sales in stores
in Petitioner's mall which are located within the City of Utica must presently collect the 4% State
sales tax and, as of June 1, 1982, will be required to collect, in addition, the 1½% tax imposed by
the City of Utica. It may be noted that the question of which sales tax (or taxes) is to be imposed with
respect to a given transaction is determined according to the point of delivery. Thus, where a sale
is made by a vendor located in one of the stores in Petitioner's mall but where delivery is made at a
point outside of that store, as where goods are delivered to a customer's home, the applicable sales
tax is that imposed by the taxing jurisdiction or jurisdictions in which such delivery to the customer
occurs. 20 NYCRR 525.2(a)(3).
Petitioner additionally inquires, as a hypothetical question, as to the application of the above­
described sales tax statutes where a store is itself divided by a line separating two taxing
jurisdictions. In such an instance the receipts from any given sale would be subject to the tax or taxes
imposed by the jurisdiction in which the cash register on which such sale was recorded is located.
DATED: May 11, 1982

JAMES H. TULLY., COMMISSIONER
TP-8 (4/80)

s/LOUIS ETLINGER
Deputy Director
Technical Services Bureau
LOUIS M. JACOBSON, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR