Is a custom-fitted canvas awning, installed at a homeowner's residence to block sun from entering the living and dining rooms, an exempt capital improvement, or taxable?

Subject

Ruth Bell, is whether the installation of a canvas awning constitutes a capital improvement for sales tax purposes.

What this means for you

A homeowner purchased a custom canvas awning (23'6" wide, projecting 11'6" when open) to block sun from entering her living and dining rooms, paying sales tax on both the awning and its installation. She asked whether canvas awning installations should instead qualify as an exempt capital improvement.

New York's capital-improvement test asks whether the work substantially adds value or prolongs the property's useful life, becomes permanently affixed (with removal causing material damage), and is intended as permanent. But the Department pointed to its own settled position: canvas awning installations do not result in a capital improvement, citing its published capital-improvement classification guide (Publication 862) and two prior awning-specific advisory opinions reaching the same conclusion. This appears to be a categorical rule for this product type, rather than a case-by-case factual analysis -- the custom fit and substantial size of this particular awning didn't change the outcome. Both the awning purchase and its installation charge remained fully taxable.

Q&A

Q: We install custom-fitted canvas awnings -- can any of that work qualify as an exempt capital improvement?
A: Based on this and prior opinions, no -- New York treats canvas awning installations as categorically NOT a capital improvement, regardless of custom fit or size. Both the awning itself and the installation labor are taxable.

Q: Is this different from other permanently-attached exterior structures that DO qualify as capital improvements?
A: Yes -- awnings specifically are called out by the Department's own published capital-improvement classification guide (Publication 862) as falling outside the capital-improvement category, unlike some other permanent additions to a home.

Q: Does it matter that this awning was custom made to exactly fit the homeowner's windows?
A: No -- the opinion doesn't treat custom sizing or a substantial footprint as changing the categorical classification; canvas awnings are taxable installations across the board per the cited precedent.

Citations

• Tax Law § 1105(c)(3) -- taxes installing tangible personal property, except where the installation constitutes a capital improvement.
• Tax Law § 1101(b)(9) -- defines "capital improvement": substantially adds value or prolongs useful life, becomes permanently affixed, and is intended as permanent.
• New York State Department of Taxation and Finance, "New York State and Local Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property," Publication 862 (5/94), at 6 -- classifies canvas awning installations as not a capital improvement.
• Capital Awning Co., Adv Op STC, May 26, 1983, TSB-A-83(26)S -- prior opinion holding canvas awning installation is not a capital improvement.
• Kohler Awning, Inc., Adv Op Comm T&F, February 19, 1992, TSB-A-92(11)S -- reaffirms canvas awning installations are not a capital improvement.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1995.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a95_10s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-95 (10)S
Sales Tax
April 19, 1995

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S941031G

On October 31, 1994, a Petition for Advisory Opinion was received from Ms. Ruth Bell, P.O.
Box 738, 70 Whippoorwill Lane, Quoque, New York.
The issue raised by Petitioner, Ms. Ruth Bell, is whether the installation of a canvas awning
constitutes a capital improvement for sales tax purposes.
In 1993 Petitioner purchased an installed canvas awning from Brock Awnings Ltd. to be
installed in her home in Quoque, New York. Brock charged Petitioner $4160 plus sales tax of
$353.60. The awning was custom made to fit exactly in the area to block the sun in the daytime from
entering her living room and dining room. The awning is 23'6" wide and when open projects out
11'6".
Section 1105(c)(3) of the Tax Law imposes a tax on the service of installing tangible personal
property, but excepts such service where the installation constitutes a capital improvement to real
property.
Section 1101(b)(9) of the Tax Law defines a capital improvement as:
(i)

An addition or alteration to real property which:

(A)
Substantially adds to the value of the real property, or appreciably prolongs
the useful life of the real property; and
(B)
Becomes part of the real property or is permanently affixed to the real
property so that removal would cause material damage to the real property or article
itself; and
(C)

Is intended to become a permanent installation.

It has been determined that the installations of canvas awnings do not result in a capital
improvement in accordance with the meaning and intent of sections 1101(b)(9) and 1105(c)(3) of
the Tax Law. New York State Department of Taxation and Finance, New York State and Local
Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property,
Publication 862 (5/94), at 6; Capital Awning Co., Adv. Op STC, May 26, 1983 TSB-A-83(26)S;
Kohler Awning, Inc., Adv Op Com T&F, February 19, 1992 TSB-A-92(11)S. Accordingly
Petitioner's purchase of a canvas awning as well as the installation of said awning is subject to the
imposition of sales tax.
DATED: April 19, 1995

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

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