Are a county fire district officers association's purchases of goods and services exempt from New York sales and use tax as a state instrumentality?

Plain-English summary

The Suffolk County Fire District Officers Association — made up of all the fire districts in Suffolk County — asked whether its purchases of goods and services are exempt from New York State and local sales and use tax. Like its Brookhaven counterpart, its only income is dues, paid out of the tax money of the member fire districts.

New York exempts purchases by "the state of New York, or any of its agencies, instrumentalities, public corporations ... or political subdivisions" under Tax Law § 1116(a)(1). The Department walked through the Town Law: fire districts are established by town boards (§ 170(1)) and are expressly political subdivisions of the state (§ 174(7)), and § 178-b authorizes fire commissioners to raise money by taxation to fund both the statewide Association of Fire Districts and county/regional associations of fire districts or fire district officers such as the petitioner. A 1972 Opinion of Counsel had already held the statewide Association of Fire Districts to be a state instrumentality exempt under § 1116(a)(1), and § 178-b treats organizations like the petitioner the same way.

The Department therefore held the association is an instrumentality of New York State, so under § 1116(a)(1) its purchases of tangible personal property and services are exempt from state and local sales and use tax. (This opinion is a companion to TSB-A-93(1)S, issued the same day to the Brookhaven Town Fire District Officers Association on identical reasoning.)

What this means for you

Fire districts and their county/regional associations

An association of fire districts (or fire district officers) that is funded through the districts' tax money and recognized in Town Law § 178-b fits within the § 1116(a)(1) exemption as a state instrumentality. Its purchases of goods and services can be made exempt from sales and use tax — issue the appropriate governmental/exempt-organization documentation to vendors rather than paying tax and seeking refunds.

Other quasi-governmental associations

The exemption here rests on a specific statutory chain (Town Law making fire districts political subdivisions and authorizing these associations, plus a prior Opinion of Counsel). A different quasi-governmental body would need to trace a similar path to "agency, instrumentality, public corporation, or political subdivision" status — being publicly funded alone is not the test.

Accountants and tax professionals

The analysis turns on § 1116(a)(1)'s "instrumentality" prong, reached by reading Town Law §§ 170(1), 174(7), and 178-b together with the June 16, 1972 Opinion of Counsel that classified the statewide Association of Fire Districts as a state instrumentality. Section 178-b's parallel reference to county and regional associations is what extends the same status to the petitioner.

Common questions

Q: Is a county fire district officers association exempt from New York sales tax?
A: Yes, on these facts. The Department held it is an instrumentality of New York State under Tax Law § 1116(a)(1), so its purchases of goods and services are exempt from state and local sales and use tax.

Q: Why is it treated as a state instrumentality?
A: Town Law makes fire districts political subdivisions of the state (§ 174(7)) and § 178-b authorizes tax-funded associations of fire districts. A 1972 Opinion of Counsel held the statewide Association of Fire Districts to be a state instrumentality, and § 178-b treats associations like this one the same way.

Q: Does the exemption cover services as well as goods?
A: Yes. The Department held the association's purchases of both tangible personal property and services are exempt under § 1116(a)(1).

Q: Is this the same as the Brookhaven ruling?
A: It's a companion. TSB-A-93(1)S was issued the same day to the Brookhaven Town Fire District Officers Association on identical reasoning and reached the same result.

Q: Can a different organization rely on this opinion?
A: No. An advisory opinion binds the Department only as to the petitioner and the facts described; another organization with different facts cannot rely on it.

Citations and references

Statutes and authorities:

• Tax Law § 1116(a)(1) (exemption for the State of New York, its agencies, instrumentalities, public corporations, and political subdivisions)
• Town Law § 170(1) (establishment and extension of fire districts)
• Town Law § 174(7) (a fire district is a political subdivision of the state)
• Town Law § 178-b (expenses of the Association of Fire Districts of the State of New York and county/regional associations)
• Opinion of Counsel, Department of Taxation and Finance, June 16, 1972 (Association of Fire Districts is a state instrumentality)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1993.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a93_2s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-93 (2)S
Sales Tax
January 5, 1993

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S920921A

On September 21, 1992, a Petition for Advisory Opinion was received from Suffolk County
Fire District Officers Association, 32 General McLean Drive, Bellport, New York 11713.
The issue raised by Petitioner, Suffolk County Fire District Officers Association, is whether
its purchases of tangible personal property and services are exempt from State and local sales and
use taxes.
Petitioner is comprised of all the fire districts which are located in the County of Suffolk,
New York. These same districts also belong to the Association of Fire Districts of the State of New
York. Petitioner's income is derived solely from dues which is paid from tax monies from the various
Suffolk County Fire Districts.
Section 1116 of the Tax Law provides, in part, as follows:
Sec. 1116. Exempt organizations.-- (a) Except as otherwise provided in this
section, any sale or amusement charger by or to any of the following or any use or
occupancy by any of the following shall not be subject to the sales and compensating
use taxes imposed under this article:
(1) The state of New York, or any of its agencies, instrumentalities, public
corporations (including a public corporation created pursuant to agreement or
compact with another state or Canada) or political subdivisions where it is the
purchaser, user or consumer, or where it is a vendor of services of property of a kind
not ordinarily sold by private persons; ...
Section 170(1) of the Town Law provides, in part, as follows:
§l70. Establishment and extension of fire, fire alarm and fire protection districts.

1. The town board of any town or, if the proposed district or extension
   includes territory in more than one town, the town boards of each of the towns in
   which such proposed district or extension is situated, acting jointly by a majority vote
   of the members of each of such town boards, upon a written petition as hereinafter
   provided, may establish or extend fire districts, fire alarm districts and fire protection
   districts in said town or towns; ...
   Section 174(7) of the Town Law provides, in part, that "a fire district is a political
   subdivision of the state ...".

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TSB-A-93 (2)S
Sales Tax
January 5, 1993
Section 178-b of the Town Law provides as follows:
§178-b. Expenses of the association of fire districts of the state of New York
The board of fire commissioners of any fire district may determine to expend
and raise by taxation annually such sums as may be required toward defraying the
actual and necessary expenses of maintaining and continuing the association of fire
districts of the state of New York, and any of its activities in this state for the purpose
of devising practical ways and means of obtaining greater economy and efficiency
in the administration of fire district affairs.
The board of fire commissioners of any fire district may determine to expend
and raise by taxation annually such sums as may be required to defray the
proportionate share of such fire district to meet the actual and necessary expenses of
maintaining and continuing (1) the county association of fire districts or the county
association of fire district officers of the fire districts in a county in which all or part
of such fire district is located and (2) a regional association of fire districts or a
regional association of fire district officers of the fire districts located in an area of
adjoining counties, and to maintain and continue any of the activities of any such
association, for the purposes of obtaining greater economy and efficiency in the
administration of fire district affairs. (emphasis added)
In Opinion of Counsel of the Department of Taxation and Finance, June 16, 1972,
Counsel after citing Sections 170(1), 174(6) [now Section 174(7)] and 178-b of the
Town Law stated, in part, as follows:
I am of the opinion, therefore, that the Association of Fire Districts of the
State of New York is an instrumentality of the State of New York, within the
meaning of section 1116(a)(1) of the Tax Law, recognized by the Legislature as such.
*

*

*

Accordingly, I am of the opinion that the Association of Fire Districts of the
State of New York, is exempt from New York State and local sales and use taxes, as
provided in section 1116(a)(1) of the Tax Law.
Section 178-b of the Town Law, which makes reference to the Association of Fire Districts
of the State of New York, also makes a similar reference to organizations such as the Petitioner.

-3­
TSB-A-93 (2)S
Sales Tax
January 5, 1993
Therefore in accordance with Sections 170(1), 174(7) and 178-b of the Town Law and
Opinion of Counsel, June 16, 1972, supra, Petitioner is an instrumentality of the State of New York.
Accordingly, pursuant to Section 1116(a)(1) of the Tax Law Petitioner's purchases of tangible
personal property and services are exempt from State and local sales and use taxes.

DATED: January 5, 1993

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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