New York State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in New York, with full citations and the original source on every page.
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If I file a joint New York State income tax return with my spouse, will my separate assets become subject to the liens from tax warrants that were filed and docketed against my spouse before we married?
No. Filing a joint New York income tax return does not subject a spouse's separate assets to liens from warrants docketed against the other spouse before the marriage, and does not make that spouse li…
How does a customer's trade-in reduce the NY sales tax on a long-term motor vehicle lease?
The trade-in credit must be applied against the capitalized cost (the lease's 'sale price'), which lowers the monthly payments and therefore the taxable amount -- it can't be taken a second time off t…
Which of a railroad IT provider's hosted products are taxable, and how are they sourced for NY sales tax?
They split three ways. Products where the customer uses the provider's hosted software to manipulate its own data are sales of prewritten software (taxable, Tax Law 1101(b)(6)) -- Transportation Manag…
Are charges to rent reusable shipping pallets, plus related fees, subject to NY sales tax?
Yes, the pallet rentals are taxable and so are most of the add-on fees. A lease of tangible personal property is a taxable sale (Tax Law 1101(b)(5)), and renting reusable pallets to manufacturers does…
Is a merchant return-authorization (fraud-scoring) service taxable in NY, and what about a linked discount-coupon service?
The return-authorization service is taxable; the discount-coupon service isn't. The authorization service compiles shoppers' return history and runs it through proprietary risk models to recommend whe…
Does an in-service hardship distribution from the Federal Employees' Thrift Savings Plan qualify for New York's income subtraction for federal pensions?
Yes. Tax Law § 612(c)(3)(ii) lets federal employees subtract their pension income from New York adjusted gross income, and because New York exempts in-service distributions paid to its own state emplo…
Are Red Bull Energy Shot and Sugar Free Shot drinks exempt from NY sales tax as dietary supplements?
No -- they're taxable. Tax Law 1115(a)(1) exempts food, dietary foods, and health supplements, but expressly excludes soft drinks and sodas (which include non-carbonated and dietetic beverages). Red B…
Is buying and leasing an aircraft interest through a fractional-style program a taxable property purchase or a nontaxable transportation service?
It's a taxable purchase of tangible personal property, not a nontaxable transportation service. Whether a program like this is taxable property or an exempt transportation service turns on whether dom…
Are a financial data provider's options taxable -- aggregated investor info versus an optional analytics software tool?
Mostly not, but the optional software tool is. The provider gathers and normalizes investor-level portfolio and advisor information from many institutions and delivers it to financial institutions and…
Are an independent personal trainer's services subject to NY State or NYC sales tax?
No. Personal training -- cardiovascular and isometric exercise, weight and resistance training -- is not among the services enumerated as taxable under Tax Law 1105(c), so it isn't subject to New York…
We're financing an airport terminal expansion through the Port Authority. A leasehold mortgage we have to record is 'supplemental' to a governmental instrumentality's tax-exempt mortgage and secures the exact same bond debt -- does it get to piggyback on that exemption even though neither party to OUR mortgage is a government entity?
Yes, exempt -- but not because either party is a government entity. Recording of the Supplemental Leasehold Mortgage is exempt from New York's mortgage recording tax under Tax Law § 255.1(a), which ex…
Are 'peer group' market-share analysis services for financial firms taxable in NY?
Yes -- they're taxable information services, and tax must be collected from September 1, 2010. The provider pools data contributed by a consortium of financial firms and gives each customer a report c…
Is a software license taxed in full because the buyer's NY office is the bill-to address, or only on the NY users?
Only on the portion attributable to users located in New York. Prewritten software is tangible personal property (Tax Law 1101(b)(6)), and a license to use it is taxed where possession is transferred …
Are receipts from printing and mailing patient billing statements subject to NY sales tax?
Yes, the printed statements and envelopes are taxable -- but with carve-outs. Producing patient bills from a customer's electronic file and supplying the envelopes is a sale of printed material, which…
How is a custom window fabricator that also installs taxed on materials, fabrication, and installation?
As a contractor. A fabricator that installs its own product is a contractor, and installing complete windows is a capital improvement -- so the charge to furnish and install windows isn't taxable. The…
New York Advisory Opinion TSB-A-10(11)C / 10(41)S: Are video switching services taxable telecommunication services, can the inputs be bought for resale, and is a rented control panel taxable equipment a broadcaster can buy exempt?
Yes. A video switching service is a telecommunication service subject to State and local sales tax and the section 186-e excise tax; the provider may buy the transmission services and equipment it res…
Which fees of a professional-networking site are taxable -- subscriptions, in-network email, job ads, and surveys?
It splits. Premium subscriptions and paid in-network email are taxable information services: they let a customer search the site's member database and contact targeted members -- essentially buying us…
Can a car dealer buy oil and filters tax-free for 'free' oil changes promised to vehicle buyers?
Yes -- if the deal documents say the oil changes are included in the price. When the dealer's sales invoice (or the sale/lease contract or another writing given at the time of sale) states that oil ch…
If someone is a UK citizen who files a federal Form 1040NR as a nonresident alien, but qualifies as a New York State and City statutory resident because they're present here more than 183 days, what income does New York tax?
New York taxes the individual as a statutory resident under Tax Law § 612(a), meaning New York adjusted gross income equals whatever amount is includable in his federal adjusted gross income - here, t…
Is an online-advertising analytics/management platform a taxable information service in NY?
No -- it qualifies for the personal/individual exclusion. The platform lets clients monitor, manage, and optimize their online advertising across third-party ad networks; it retrieves, analyzes, and p…
New York Advisory Opinion TSB-A-10(10)C: Is a provider of one-way and two-way paging services subject to the section 184 franchise tax on local telephone business?
No. A provider of one-way and two-way paging services is not subject to the section 184 franchise tax, because it is not principally engaged in local telephone business: its paging is a telecommunicat…
Is installing window film a taxable service or a nontaxable capital improvement in NY?
It depends on whether it's part of a new/replacement window or applied to an existing one. Applying window film in connection with the original installation or complete replacement of a window is a ca…
Are a yacht-club member's mooring fees subject to NY sales tax as club dues?
Yes -- they're taxable dues. Tax Law 1105(f)(2) taxes dues paid to a social or athletic club. The yacht club is a 'club' because its members control elections, the selection of new members, and manage…
Are comic books, graphic novels, and trade paperbacks exempt from NY sales tax as periodicals?
It depends on the format. Comic books published serially under the same title at least four times a year are exempt periodicals under Tax Law 1115(a)(5). That includes back issues -- but only if the b…
How can a landlord allocate a lump-sum lease between taxable equipment and nontaxable real property for NY sales tax?
Only with a reasonable, documented allocation -- otherwise the whole rent is taxable. When real property and taxable tangible personal property (here a hotel's furniture, fixtures, and equipment) are …
Can an Empire Zone business claim QEZE sales-tax exemptions for purchases made before it got its QEZE certification?
No. Being certified as an Empire Zone business under the General Municipal Law isn't enough -- to claim the QEZE sales-tax benefits, the business must also apply for and receive a QEZE Sales Tax Certi…
New York Advisory Opinion TSB-A-10(9)C: How may a taxpayer measure whether a building (including shared conference rooms) is principally used in qualifying activities for the Article 9-A investment tax credit?
By measuring qualifying use of the space. For the investment tax credit, a building is principally used in qualifying activities if more than 50 percent of its usable business space is so used; tracki…
Are a financial-data company's charges for data feeds, online reports, application software, technical/research support, and training subject to NY sales tax?
It depends on the item. The company's data feeds are taxable information services (Tax Law 1105(c)) -- they are compilations drawn from a common database that every subscriber accesses, so the 'person…
My organization administers a union health and welfare benefit plan funded by employer contributions under collective bargaining agreements. Are the benefits we pay out subject to MCTMT, and do we have to pay it?
SUPERSEDED -- see TSB-A-10(1.1)MCTMT, issued April 8, 2011, which explicitly replaced this opinion on the same petition and facts. This original opinion concluded that union health and welfare benefit…
Is a company that supplies MRI/CT equipment, staff, and supplies to a hospital -- billed per scan -- renting taxable equipment, or providing a nontaxable service? And are its own purchases taxable?
The company is providing a NONTAXABLE diagnostic-imaging service to the hospital, not renting medical equipment and supplies -- so its monthly per-scan fees aren't subject to sales tax. The key is tha…
If a retired SUNY employee rolls their Optional Retirement Program pension into an IRA, are later distributions from that IRA exempt from New York income tax?
The portion of each IRA distribution that represents a return of the rolled-over ORP pension contribution remains exempt under Tax Law § 612(c)(3)(i), since it is still attributable to state employmen…
Are sales of pumpkins by a supermarket or other business subject to NY sales tax?
It depends on the type of pumpkin. Pie pumpkins (sugar, deep red, golden cushaw and similar gourds normally used in cooking pies, cakes, breads, and cookies) are exempt food sold for human consumption…
Are receipts from a call-tracking service sold to car dealerships subject to NY sales tax?
No. The call-tracking service -- which routes toll-free advertising calls, records the conversations, runs exit surveys, and measures advertising performance for each dealer -- is not taxable. It is N…
Is a transfer of prewritten software taxable in NY, and how is the sale sourced when the code sits out of state but is used here?
Yes, it's taxable, and it's sourced to where the software is used in New York. Prewritten computer software is tangible personal property regardless of how it's conveyed (Tax Law 1101(b)(6)), so the c…
When a theater receives movies from studios, is the rental taxable -- and does it matter whether they come by satellite or on a hard drive?
It depends on how the movie is delivered. Movies the theater receives by satellite transmission or otherwise delivered electronically (with no tangible property changing hands) are NOT subject to sale…
New York Advisory Opinion TSB-A-10(8)C: Does a foreign equipment seller owe Article 9-A tax, and if installation/training push it past PL 86-272, is it taxed only on those receipts?
It depends, and there is no partial exemption. A foreign corporation that only solicits orders for testing equipment (approved and shipped from outside New York) is protected by Public Law 86-272 and …
New York Advisory Opinion TSB-A-10(7)C: Must a New York not-for-profit corporation that has no IRS 501 determination still file and pay Article 9-A franchise tax?
Not necessarily. A New York not-for-profit corporation with no stock or shares, operated on a nonprofit basis with no earnings inuring to members, can qualify for the Article 9-A franchise-tax exempti…
Are membership dues charged by a business-development networking organization taxable as social or athletic club dues?
No. New York taxes dues paid to a social or athletic club (Tax Law 1105(f)(2)), but this organization is not one. While it qualifies as a 'club or organization' under the regulations, it is not a soci…
Was the royalty income a retired professor received from his patented glaucoma treatment, after he became a nonresident of New York, taxable as New York source income?
No. Because the royalties arose from a voluntary patent assignment rather than his university employment, and the patent was not employed in a business, trade, profession, or occupation carried on in …
A prior owner financed a building through an Islamic-finance (Ijara/lease-to-own) structure, deeding the property to a lender's special-purpose entity as security instead of using a conventional mortgage, and paying Mortgage Recording Tax (not RETT) on that deed. I'm now buying the building and financing part of the price by having that lender's entity assign the security deed to my new bank, then consolidating it with an additional mortgage into one new mortgage. Do I owe extra Real Estate Transfer Tax or Mortgage Recording Tax on the deed assignment and consolidation, beyond what's already been paid?
The assignment itself is free of additional RETT and MRT; consolidating it with new financing is taxed only on the NEW money. In 2006, a prior owner (YR) conveyed title to a special-purpose entity (DB…
Are charges for towing and transporting motor vehicles subject to NY sales tax?
It depends on what's being moved and why. Towing a disabled or inoperative vehicle so it can be repaired or maintained is TAXABLE as a constituent part of repair/maintenance under Tax Law 1105(c)(3) -…
Is a trust exempt from New York income tax if its sole trustee lives outside New York and the trust owns no New York property?
Yes. Under Tax Law § 605(b)(3)(D)(i), a resident trust owes no New York income tax if all trustees are domiciled outside New York, its entire corpus (including real and tangible property) is located o…
Once the only New York-domiciled trustee of a resident trust dies and the surviving trustee is a nonresident, does the trust stop owing New York income tax on its income?
Yes, but only prospectively. Once all trustees are non-New York domiciliaries, the trust's corpus (including real and tangible property) is entirely outside New York, and its income is otherwise non-N…
New York Advisory Opinion TSB-A-10(6)C: Can a business claim the QEZE real property tax credit for a period when it was decertified, if the decertification was overturned on appeal?
Yes. A business decertified from the Empire Zones Program in the 2009 reevaluation, but whose decertification was overturned on appeal and which received a retention certificate, keeps its eligibility…
New York Advisory Opinion TSB-A-10(4)C/(23)S: Are charges to use an online virtual-call-center network (and related billing and call-handling services) subject to New York sales tax?
Partly. Charges to access the LiveXchange virtual-call-center network are taxable receipts from the sale of prewritten computer software, sourced to where the users are located. PaySource's billing an…
Are sales of low-vision equipment (magnifiers, telescopes, filters, video magnifiers) to and by vision care professionals subject to NY sales tax?
No -- when sold for use by people with low vision, this equipment is exempt. The hand-held, stand, and spectacle magnifiers, video magnifiers and closed-circuit TVs, monocular telescopes, and absorpti…
Will a marriage to a same-sex partner be recognized for New York State personal income tax purposes?
No, according to this May 2010 opinion. Tax Law §§ 607(b) and 651(b) tie an individual's marital status and filing status for New York personal income tax purposes to the individual's federal marital …
Can a taxpayer amend timely sales-tax refund claims after the refund statute of limitations has expired, if the amendment just reduces the amount sought?
Yes. A taxpayer that filed timely sales-tax refund claims may amend them to reduce the refund amount even after the three-year limitations period has expired, and the claims stay valid and timely -- a…
Are litigation support / e-discovery services -- and the discs, drives, and files used to deliver them -- subject to NY sales tax?
No, the services aren't taxable, regardless of the media they're delivered on. The provider indexes, sorts, de-duplicates, and adds searchable identifiers to a client's own documents -- which makes it…
New York Advisory Opinion TSB-A-10(5)C/(24)S: Are roaming charges for foreign carriers' customers (with a place of primary use outside New York) subject to New York sales or telecom excise tax?
No. A facilities-based carrier that supplies roaming service to the customers of foreign mobile carriers -- customers whose home addresses (places of primary use) are outside New York -- owes no New Y…
Are a company's tenant-screening / credit-reporting services subject only to NYC local sales tax, or to State and local sales tax across New York?
They're taxable as information services under Tax Law 1105(c)(1) (or 1105(c)(9) if delivered electronically), statewide. The company is a consumer reporting agency that resells data from the three nat…
New York Advisory Opinion TSB-A-10(3)C: Could a bank claim the historic-rehabilitation credit against its Article 32 franchise tax under proposed Governor's Program Bill #228?
Yes, if the bill becomes law. Assuming proposed Tax Law section 1456(u) (Governor's Program Bill #228) is enacted, a bank could claim a credit against its Article 32 bank franchise tax equal to 100% o…
My building is a not-for-profit Mitchell-Lama cooperative supervised by the state housing agency, with income limits and restrictions that prevent shareholders from selling at market value. A Voluntary Reconstitution Plan would convert us into a private, for-profit cooperative corporation, letting shareholders finally sell for full market value. Does converting from the Mitchell-Lama nonprofit structure to a private cooperative trigger New York's Real Estate Transfer Tax -- for the building itself, for the new shares issued to participating shareholders, and for shareholders who opt out instead?
Yes, RETT applies at multiple points in the conversion, though credits and the mere-change exemption reduce some of the burden. A shareholder in a not-for-profit Mitchell-Lama cooperative (organized u…
Is an optional, separately stated 'rental protection' charge — a theft and damage waiver that isn't insurance — subject to sales tax when you rent equipment?
No. An optional, separately stated charge a lessee pays its equipment lessor for a 'rental protection plan' — a waiver limiting what the lessee owes for theft of or damage to the rented equipment, exp…
Is renting a self-storage unit that you lock and control yourself subject to New York's sales tax on storage services?
No. Renting a self-storage unit is not subject to the sales tax on storage services under Tax Law § 1105(c)(4) when the arrangement is a lease of real property rather than a storage service. Here the …
Is a public university's mandatory annual vehicle registration fee taxable when the same fee also lets the registrant park on campus?
Yes. A State University of New York campus's mandatory $9.65 annual vehicle registration fee is subject to sales tax as a parking service under Tax Law § 1105(c)(6), because the single fee and permit …
A campus dining contractor buys student meals from an off-campus hotel housing overflow students — does it owe sales tax on those purchases, and can it recover the tax?
The purchases are taxable, but the tax is recoverable. A food-service management company that contracts with a public college to provide meal-plan meals, and that buys meals from an off-campus hotel t…
Are receipts for managed IT support services -- monitoring, management, backup, security -- subject to NY sales tax?
It depends what's sold. The integrated IT monitoring and management packages are not taxable (their primary function -- helping a customer operate and manage its IT system -- is an unenumerated servic…
Are sales of aloe vera leaves subject to NY sales tax?
No -- aloe vera leaves sold for consumption (cut from the plant and displayed in the produce section) are exempt from sales tax under Tax Law 1115(a)(3) as a product consumed for the preservation of h…
Is a food producer's sale of branded food to a stadium concessioner taxable when related companies serve and oversee that food?
Yes. Even though the petitioner only produces and delivers the food unheated and performs no services at the stadium itself, sales tax applies under Tax Law 1105(d)(i)(2) because other entities in its…
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These are official tax letter rulings and advisory opinions issued by New York's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.