If someone buys a boat in New York and takes delivery here but plans to export it to Canada, is the sale still subject to New York sales tax?

Plain-English summary

Brian A. Ellies, a Canadian resident, bought a boat for non-commercial use in Plattsburgh, New York, and took delivery at Rouses Point, New York (Clinton County). The vessel was documented with the Canadian government "in bond," but it never actually entered Canada — it stayed docked in Plattsburgh from the purchase date onward. He asked whether sales tax was due given that the boat was supposedly destined for export.

The Department held the sale was subject to New York sales tax.

• A boat sold and delivered here is a taxable retail sale. Section § 1105(a) taxes receipts from every retail sale of tangible personal property, and a "retail sale" (§ 1101(b)(4)) is a sale to a person for any purpose other than resale.
• The place of delivery controls. Under 20 NYCRR 526.7(e), a sale is taxable "at the place where the tangible personal property . . . is delivered or the point at which possession is transferred by the vendor to the purchaser." Delivery here happened in New York.
• Export intent and "in bond" registration did not matter. Because the vessel was purchased at retail and delivered to the buyer in New York, the sale was subject to the State tax plus the 3% Clinton County tax. The buyer's statement that he intended to move the boat to Canada, and the fact that it was registered in Canada "in bond," did not compel a different conclusion.

What this means for you

Where you take delivery, not where you plan to take the item, decides New York sales tax. If possession passes to you in New York, the sale is taxable here — even if you intend to move the property out of state or out of the country.

A future or intended export doesn't exempt a completed in-state sale. An exemption based on foreign or interstate commerce generally requires the seller to actually deliver the goods outside the state; taking delivery inside New York and leaving the item here defeats that.

Foreign registration doesn't override the delivery rule. Documenting the boat in Canada "in bond" did not change the fact that it was delivered — and stayed — in New York.

Common questions

Q: I'm going to move my boat (or other purchase) out of New York. Can the seller skip the tax?
A: Not if you take delivery in New York. The tax applies where possession is transferred (20 NYCRR 526.7(e)); your later plans don't exempt the sale.

Q: The boat is registered in another country. Doesn't that exempt it?
A: No. Registration elsewhere didn't change the result where the vessel was delivered to the buyer in New York and never left.

Q: Does county tax apply too?
A: Yes. The sale was subject to the State tax plus the local tax where delivery occurred — here, the 3% Clinton County tax.

Citations and references

Statutes and regulations:

• Tax Law § 1105(a) — tax on receipts from retail sales of tangible personal property
• Tax Law § 1101(b)(4) — definition of "retail sale"
• 20 NYCRR 526.7(e) — a sale is taxable where the property is delivered / possession transferred to the purchaser

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_6s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-82(6)S
Sales Tax
January 29, 1981

Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S810910C

On September 10, 1981, a Petition for Advisory Opinion was received from Brian A. Ellies,
185 Fairhaven, P.O. Box 13, Hudson P.Q. Canada J0P1H0.
The issue raised is whether sales tax is due on the purchase of a vessel which will be exported
to a foreign country.
Petitioner purchased a vessel for non-commercial use in Plattsburgh, New York on
September 10, 1979. Petitioner took delivery of the vessel at Rouses Point, New York, and the same
has never been transported into Canada. The vessel is documented with the Canadian government,
but has never entered Canada. The vessel has continually been docked at the Dock and Coal Marina
in Plattsburgh, New York since the purchase date.
Section 1105(a) of the Tax Law imposes a tax on "The receipts from every retail sale of
tangible personal property . . .". Section 1101(b)(4) of the Tax Law defines a retail sale as "(i) A sale
of tangible personal property to any person for any purpose, other than (A) for resale as such . . .".
The Sales and Use Tax Regulations provide, in relevant part, as follows:
"(1) A sale is taxable at the place where the tangible personal property . . . is delivered or the
point at which possession is transferred by the vendor to the purchaser or his designee." 20
NYCRR 526.7(e).
Inasmuch as the vessel in question was purchased by Petitioner at retail and was delivered
to Petitioner at a location in New York State, the sale of the vessel to Petitioner was subject to the
State sales tax imposed under section 1105(a) of the Tax Law, as well as the 3% tax in effect in
Clinton County, in which Rouses Point is located. Petitioner's statement to the effect that he intends
to move the vessel to Canada, and the fact that the vessel is registered in Canada "in bond," do not
compel a conclusion contrary to that expressed herein.

DATED: January 12, 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