Are soldiers who live off-post in federally leased Section 801 military housing treated as residing on a military base, or as New York residents whose vehicle purchases are taxable?

Plain-English summary

The Staff Judge Advocate at Fort Drum asked whether soldiers who live off-post in federally leased "Section 801" family housing are treated as residing on a "military base or reservation." That matters because 20 NYCRR § 526.15(d) treats a servicemember whose place of abode is on a federal military base or reservation as a non-resident of New York (unless a resident before entering service) — and non-residents aren't taxed the same way on purchases like motor vehicles.

The Section 801 housing at Fort Drum is 1,700 units in twelve complexes, built by private developers and leased to the Army for 20 years under 10 U.S.C. § 2828(g). The Army has exclusive possession, treats the complexes as sub-installations, and administers them exactly like on-post housing (single waiting list, same rules on weapons, child care, and access).

Even so, the Department held the soldiers there are New York residents for sales tax:

• The land was never ceded to the United States. The units sit on privately owned land outside the areas of Fort Drum that New York ceded to the U.S. under State Law § 52-a, and the governor has not ceded jurisdiction over it.
• The state indicators of jurisdiction remain local. The developer/owner pays the local real property taxes, and the localities provide police and fire protection.
• New York kept its taxing jurisdiction. State Law § 50 does not relinquish New York's right to tax individuals on land acquired by the United States absent a cession of jurisdiction. So these soldiers maintain an abode off a federal base or reservation and are residents — regardless of their residency when they entered service.
• Result: their motor-vehicle purchases are subject to New York State and local sales and use tax.

What this means for you

"On base" for tax means jurisdiction, not just Army control

The military resident/non-resident rule turns on whether the abode sits on land over which New York has ceded jurisdiction to the United States — not on whether the Army possesses and runs the housing. Leased off-post housing on privately owned, locally taxed land stays under New York's jurisdiction even when it functions like part of the post.

The practical stakes are vehicle and other purchases

A servicemember treated as a New York resident is subject to New York State and local sales and use tax on purchases such as motor vehicles. Soldiers assigned to leased Section 801-type housing should not assume the non-resident treatment that applies to those quartered on ceded base land.

Check the specific tract's jurisdictional status

Because the answer depends on cession of jurisdiction, real property tax liability, and who provides police/fire services for the specific parcel, the classification can differ from one housing area to another. Confirm the status of the actual tract rather than assuming all military housing is treated alike.

Common questions

Q: I live in leased military housing off-post — am I a New York resident for sales tax?
A: Under this opinion, yes, if the housing sits on privately owned land New York never ceded to the United States, where the owner pays local property tax and localities provide police and fire protection.

Q: Does it matter that I wasn't a New York resident before I enlisted?
A: Not here. Because the housing is off a ceded base or reservation, you're treated as a New York resident regardless of your residency at entry into service.

Q: What purchases does this affect?
A: Purchases subject to New York State and local sales and use tax — the opinion specifically addresses motor vehicles.

Citations and references

Regulations and statutes:

• 20 NYCRR § 526.15(d) — residency of military personnel; abode on a federal base or reservation means non-resident
• State Law § 52-a — authority to cede jurisdiction over Fort Drum lands to the United States
• State Law § 50 — New York's jurisdiction over lands acquired by the United States
• 10 U.S.C. § 2828(g) — Section 801 leased military family housing (P.L. 98-115)
• 10 U.S.C. § 2687(e) — definition of "military installation"

Cited authority:

• United States v. Mowat, 582 F.2d 1194 (7th Cir. 1978), cert. denied 439 U.S. 967 — exclusive right of possession under a lease for federal criminal-jurisdiction purposes (distinguished as to state taxing jurisdiction)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1989.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a89_49s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-89(49)S
Sales Tax
December 21, 1989

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S890817B

On August 17, 1989 a Petition for Advisory Opinion was received from Lieutenant Colonel
Donald Morgan, Staff Judge Advocate, 10th Mountain Division (LI) and Ft. Drum, Fort Drum, New
York 13602-5100.
The issue raised by Petitioner, Lieutenant Colonel Donald Morgan, is whether soldiers who
live off-post in federal leased military housing areas constructed and leased under the authority of
Section 801 Public Law 98-115, reside on a "military base or reservation" for the purposes of Title
20, New York Code of Rules and Regulations, Section 526.15(d), which defines "resident" as
applicable to military personnel for sales tax purposes.
Section 801 Army family housing in the Fort Drum area consists of twelve leased military
housing complexes containing a total of 1,700 family housing units. The housing facilities were
constructed pursuant to Section 801, Public Law 98-115, which conferred upon the Department of
Defense (DoD) the authority to contract with private developers to construct family housing, which
the DoD would then lease for a twenty-year term (hence the name, Section 801 Housing). The leases
provide that the U.S. Army has the exclusive right of possession of the leased areas which include
the housing units, the grounds around the housing units, and the streets and sidewalks within the
housing complexes.
The housing complexes are located in Jefferson, Lewis, and St. Lawrence counties. After
consulting with State and local officials, the Department of Defense decided to construct Army
family housing units in various local communities to spread economic benefit from the expansion
of Fort Drum to those communities.
Section 801 Housing areas are Sub-Installations of Fort Drum, and the Army treats the leased
housing complexes as part of the military base. No difference exists between the administration or
assignment of the Section 801 Housing units and other family housing on Fort Drum. There is a
single waiting list for all Army family housing, and assignment of family housing is based solely on
the bedroom requirements of the soldier and the next available unit, regardless of location.
The Fort Drum installation commander regulates weapons in quarters, child care, and public
access in Section 801 housing just as he does in family housing on Fort Drum. Furthermore, under
federal criminal law, leased property is viewed as part of a military reservation, post, fort, or
installation. For example, as an element of the offense of unauthorized entry onto a military
reservation, 18 U.S. Code section 1382, the government is required to prove absolute ownership or
the exclusive right to possession of property upon which the violation occurred. United States v.

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Mowat, 582 F.2d 1194 (7th Cir.1978), cert. denied 439 U.S. 967. The exclusive right to possession
of the property conveyed by the lease is adequate for this purpose.
While the leases between the developers and the United States provide that the U.S. Army
has exclusive right of possession of the leased areas wherein the Section 801 Housing units are
located, the developer (owner/lessor of the real property) is responsible for paying the real property
taxes due on such leased real property and police protection and fire protection in the Housing units
are provided by the localities wherein such Housing units are located.
Pursuant to Section 52-a of the State Law the governor of New York State was "authorized
to cede to the United States full concurrent jurisdiction over the tracts of land comprising the Fort
Drum military installation and any other lands that may be acquired by the United States for military
purposes at or near Fort Drum . . . " Jurisdiction of the leased property upon which the Section 801
Housing units are located has not been ceded to the United States.
"Military installation" means a base, camp, post, station, yard, center, or other activity under
the jurisdiction of the Secretary of a military department which is located within any of the several
States . . . . (10 USCS § 2687(e))
Sec. 801. Section 2828 of Title 10, United States Code, is amended by adding at the end
thereof the following subsection:
"(g)(1) Notwithstanding any other provision of law, the Secretary of a military department
may enter into a contract for the lease of family housing units to be constructed on or near a military
installation within the United States under the Secretary's jurisdiction at which there is a validated
deficit in family housing. Housing units leased under this subsection shall be assigned without rental
charge as family housing to members of the armed forces who are eligible for assignment to military
family housing. . . . (P.L. 98-115)
Section 526.15(d) of the New York State Sales and Use Tax Regulations states:
Military personnel. Any person serving in the Armed Forces of the
United States, whose place of abode is situated on a Federal military
base or reservation is not a resident of New York, unless he was a
resident of New York immediately prior to his entry into service.
Any person serving in the armed forces of the United States, whose
place of abode is situated off a military base or reservation is deemed
a resident of New York.
Therefore, the real property upon which the Section 801 Housing units are located as well
as such Section 801 Housing units, are not considered to be part of Fort Drum nor to be situated on
or within a Federal military base or reservation not subject to the taxing jurisdiction of New York
State for the purposes of Section 526.15(d) of the Sales and Use Tax Regulations since,

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December 21, 1989

a. the Section 801 Housing units are located on privately owned real property located outside
the areas of Fort Drum ceded to the United States pursuant to Section 52-a of the State Law;
b. the governor of New York State has not ceded jurisdiction of such real property to the
United States;
c. the developer (owner/lessor) of such real property is liable for paying real property taxes
due on such real property to the localities; and
d. police and fire protection are provided by the localities wherein such real property is
located;
Section 50 of the State Law does not relinquish the right of New York State to impose sales
tax on individuals residing on properties acquired by the United States or to treat such individuals
as residents for purposes of said tax since said Section does not provide for the ceding of jurisdiction
by New York State to the United States over such realty. Military personnel residing within such
housing units located "outside" Fort Drum are considered to be maintaining a place of abode situated
off a Federal military base or reservation and are considered to be residents of New York State for
sales tax purposes, regardless of their resident status at the time of entry into military service.
Accordingly, purchases of motor vehicles by such military personnel are subject to New York State
and Local Sales and Use Tax.

DATED: December 21, 1989

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.