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 resell a product that arrives partly cooled or degraded and I use fuel and electricity to restore it to a saleable condition before delivery, do those utility purchases qualify for New York's production exemption?
No. Fuel oil and electricity used to reheat previously-manufactured liquid asphalt so it can be stored and delivered are taxable, because reheating for storage and delivery is a post-production, distr…
If my business buys produce from farmers on consignment and then cleans, sorts, packages, and stores it for sale to retail stores, do my equipment and utility purchases qualify for New York's farm production sales tax exemption?
No. A distributor that obtains fruit from farmers on consignment and then cleans, sorts, packages, and stores it for resale is not itself engaged in exempt farm production, so its purchases of equipme…
New York Advisory Opinion TSB-A-09(13)C/(8)I: Does a long-existing corporation reopening operations in an Empire Zone pass the section 14 'new business' test?
Yes for QEZE, no for the wage/investment credits. A corporation taxable under Article 9-A since 1993 that reopens at a new Empire Zone plant passes the section 14(j) 'new business' test, because that …
If a customer returns merchandise late and only gets a partial refund under our store's return policy, do we refund all the sales tax collected, or only the tax on the amount we actually refund?
Only a partial refund of sales tax is due. Because New York sales tax is a transaction tax based on the original purchase price, a customer is entitled to a tax refund only in proportion to the percen…
If I sell a product from a New York terminal to out-of-state customers who arrange their own pickup, do I have to charge New York sales tax, and does it matter whether a common carrier or the customer's own truck picks it up?
It depends on who takes physical delivery in New York. Sales are taxable when the customer (or the customer's own hired carrier) picks up the asphalt in New York, even if it's headed out of state — bu…
If I roll over my Federal Reserve Bank of New York 401K Thrift Plan (which is exempt from New York tax) into an IRA, will distributions from the IRA still be exempt from New York personal income tax?
Yes, but only in part. The portion of an IRA distribution that represents a return of the rolled-over FRBNY 401K Thrift Plan contribution stays exempt under Tax Law § 612(c)(3)(ii). Any gain or income…
If I rent construction equipment to a subcontractor working on a government project like the Freedom Tower, do I have to charge sales tax, or is the rental exempt because the ultimate owner is a tax-exempt government entity?
Yes, tax was due. New York's governmental-purchase exemption didn't cover this crane rental because the subcontractor renting the cranes was never named as an appointed agent of the Port Authority on …
New York Advisory Opinion TSB-A-09(12)C: Are unbundled sales of energy commodities subject to the local gross receipts taxes under General City Law section 20-b and Village Law section 5-530?
Yes (informal opinion). Unbundled sales of energy commodities -- selling the commodity apart from its delivery -- are subject to the local gross receipts taxes that cities and villages may impose unde…
New York Advisory Opinion TSB-A-09(11)C: Are unbundled sales of energy commodities subject to the local gross receipts taxes under General City Law section 20-b and Village Law section 5-530?
Yes (informal opinion). Unbundled sales of energy commodities -- selling the commodity apart from its delivery -- are subject to the local gross receipts taxes that cities and villages may impose unde…
New York Advisory Opinion TSB-A-09(10)C/(6)I: Will a newly formed entity or a division of a foreign corporation be eligible for the QEZE tax reduction credit and the wage tax credit?
Yes, beginning in the second taxable year. Either a newly formed entity or a division of the foreign corporation can claim the QEZE tax reduction credit and the EZ wage tax credit if it has at least o…
If I rent an individual free-standing garage to an apartment tenant, either bundled into rent or as a separate charge, do I have to charge New York sales tax on it as a parking or garaging service?
No. Renting an individual, numbered garage to a tenant under a lease that gives the tenant exclusive control of that specific space is a lease of real property, not a taxable parking or garaging servi…
If I sell memberships letting people drive their own cars on my private road course, are the membership fees and annual dues subject to New York sales tax as club dues or admission charges?
No. Membership license fees and annual dues for a private road-course driving facility are not subject to sales tax, because driving on the course is a participant sporting activity exempt from the am…
If I run a web-based platform that homecare agencies and subcontractors log into to schedule care and track visits, is access to my software taxable, and is training or customization also taxed?
Yes. Charges for accessing a web-based homecare scheduling and time-and-attendance platform are taxable as a sale of prewritten software, sourced to the locations of the agencies and subcontractors wh…
New York Advisory Opinion TSB-A-09(9)C/(24)S: Are telecom services a reseller sells to offshore call centers (calls always originating or terminating offshore) subject to New York sales tax or the section 186-e excise tax?
No. A telecom reseller's services sold to offshore call centers are not subject to New York sales tax or the section 186-e excise tax. Because every call either originates or terminates at the offshor…
New York Advisory Opinion TSB-A-09(8)C: How are a website operator's online advertising fees and medical 'risk participation' fees sourced to New York for the Article 9-A business allocation percentage?
By where the audience is and where the service is performed. A website operator's advertising receipts are sourced to New York based on where the audience views/reads the ads (the same audience-based …
If customers buy fractional ownership interests in an aircraft I manage, but I retain control over scheduling, pilots, and maintenance, are their payments taxed as a rental of the aircraft or as an untaxed transportation service — and is my own purchase of the aircraft taxable?
Neither is taxed as a sale of the aircraft. Because the fractional-share operator retained full dominion and control (scheduling, pilots, maintenance, and the right to substitute aircraft), customer p…
If an employer's electronic system produces a Form W-4 that satisfies the federal electronic-signature requirements, does the New York equivalent, Form IT-2104, automatically satisfy New York's own signature requirements?
No. Meeting the federal electronic-signature requirements for Form W-4 does not automatically satisfy New York's signature requirements for Form IT-2104. The electronic system must separately comply w…
If my store charges customers a separate fee for a personal shopper to pick their groceries, and a separate fee for home delivery, are either of those service charges subject to sales tax?
It depends which service. A grocery store's separate personal shopping fee is not taxable, but its home delivery fee is taxable in full whenever the delivered order includes any taxable item or servic…
If my engineering firm designs products for clients and delivers drawings, prototypes, and CAD data, which parts of my charges and which of my own material purchases are subject to New York sales tax?
Mostly untaxed. An engineering firm's product-development service charges (including transferring CAD data electronically) aren't subject to sales tax unless the firm separately sells taxable prototyp…
My design firm delivers logos, brochures, and website designs to clients either on disc or electronically — does the delivery method change whether my design charges are subject to New York sales tax?
It depends entirely on delivery method. A design firm's charges are fully taxable when the final design (logos, brochures, website HTML code) is delivered on tangible media like a disc to a client in …
My company licenses customers access to markdown-recommendation software hosted on our own server, with separate charges for implementation, support, and hosting — which of these charges are subject to New York sales tax?
Mostly taxable. Monthly license fees for remotely-accessed, non-downloaded markdown-recommendation software are taxable prewritten computer software because the customer gains the right to use it even…
New York Advisory Opinion TSB-A-09(7)C/(4)I: May an LLC specially allocate the tangible-property component of the Brownfield Redevelopment Tax Credit in the same proportion as the related depreciation deductions?
Yes, if the depreciation allocation is valid. An LLC taxed as a partnership may specially allocate the tangible-property component of the Brownfield Redevelopment Tax Credit among its members in the s…
My company sells subscription reports built from a shared database of evaluator input about my customers — are those subscription fees a taxable information service in New York?
Taxable. A web-based subscription service's fees for evaluation reports on investment broker dealers are a taxable information service under Tax Law §1105(c)(1), because the reports are built from a c…
My country club has both stockholder-members and non-stockholder members, with dues, initiation fees, and stock purchase charges — are membership dues and fees subject to New York sales tax?
Taxable. A golf/country club's membership dues, stock-purchase fees, assessments, initiation fees, and minimums are all subject to sales tax as social-or-athletic-club dues under Tax Law §1105(f)(2), …
New York Advisory Opinion TSB-A-09(6)C: How do Empire Zone benefit periods and QEZE credits work for a parent and subsidiary filing combined, and when a certified subsidiary merges into the parent?
Each entity keeps its own benefit period, and a merger collapses them to one. A certified subsidiary gets its own 10-year QEZE benefit period and computes its credits on its own numbers, applied again…
If my company sells human- or animal-tissue surgical implant products to hospitals, is that sale exempt from New York sales tax as a prosthetic aid?
Exempt. A processor's human- and animal-tissue soft-tissue implant products sold to hospitals qualify as tax-exempt prosthetic aids under Tax Law §1115(a)(4), because they replace missing or malfuncti…
My company licenses mortgage brokers access to our loan-origination software hosted entirely on our own out-of-state servers, with no download and no code ever touching the subscriber's computer — is our subscription fee subject to New York sales tax, and does the federal Internet Tax Freedom Act protect us?
Taxable. A mortgage-technology company's subscription fees for its "Encompass Anywhere" Internet-hosted loan origination and processing software are subject to New York sales tax as a sale of prewritt…
We're the public benefit corporation that manages Roosevelt Island. On a mixed-use development (the Octagon Project), we'll be named mortgagee on financing that's really funded by a private lender, and later assign our interest to that lender. Is that mortgage -- and any later assignments, supplements, or modifications of it -- exempt from mortgage recording tax as long as it's really us presenting it for recording?
Exempt, if RIOC is named mortgagee and presents the mortgage for recording. The Roosevelt Island Operating Corporation (RIOC), a public benefit corporation and political subdivision created by the sta…
My company provides automated voice-calling services to airlines, banks, and other businesses using proprietary software we keep entirely in-house — is our calling-service fee or our own software subject to New York sales or use tax?
Not taxable. An automated voice-message provider's fees for placing calls to customer-designated recipients aren't subject to New York sales tax, because the service isn't among the enumerated taxable…
New York Advisory Opinion TSB-A-09(5)C: How are a social network's online advertising receipts (CPC and CPM) allocated to New York for the Article 9-A business allocation percentage?
By where the audience is. A website operator's online advertising receipts are allocated to New York based on the New York audience, not where its servers or staff sit. Cost-per-click (CPC) receipts a…
My company sells FDA-classified copper IUDs to both patients and medical providers — do they qualify for New York's sales tax exemption for drugs and medicines?
No, not as drugs — but yes, functionally exempt for patients. The ParaGard copper IUD does not qualify for New York's drugs-and-medicines sales tax exemption because the FDA classifies it as a medical…
New York Advisory Opinion TSB-A-09(4)C: Is a corporation dissolved by proclamation that merely holds New York real property as a nominee still subject to Article 9-A franchise tax?
No, not after dissolution. A corporation dissolved by proclamation that merely remains the record title holder of New York real property as a nominee for others, and is otherwise completely inactive, …
When a taxpayer files an amended New York income tax return to claim a refund based on federal changes, does interest on the overpayment start running from the date of the original return or the date of the amended return?
Interest runs only from the date the amended New York return was filed, not from the original return's filing date. Under Tax Law § 688(a)(3), no interest is allowed for any day before an amended retu…
New York Advisory Opinion TSB-A-09(3)C: Does a newly formed AMD/Foundry subsidiary qualify as a 'new business' under sections 14(j), 210.12(j), and 210.19(c)?
Yes for two tests, no for the third. The newly formed corporation will qualify as a 'new business' under Tax Law sections 14(j)(1) and 210.12(j) because it is not substantially similar in ownership to…
New York Advisory Opinion TSB-A-09(2)C: Is a foreign non-life insurer with no New York premiums taxable under Article 33 solely because it is a limited partner in a fund doing business in New York?
It depends on the fund. A foreign non-life insurance corporation not licensed in New York and with no New York premiums can still be subject to the Article 33 insurance franchise tax if it is a limite…
My company retrieves and delivers copies of individual patients' confidential medical records to requestors on behalf of medical facilities — is that record-retrieval fee subject to New York sales tax?
Untaxed. Fees for retrieving and furnishing an individual's own specifically identified, confidential medical or insurance records to an authorized requestor are not a taxable information service or s…
My out-of-state satellite Internet provider furnishes required equipment to New York customers through third-party dealers, and I've never paid New York sales tax on the equipment purchase itself — do I owe New York use tax on that equipment?
Mostly exempt in practice. An out-of-state satellite Internet provider owes New York use tax (not sales tax) on customer premises equipment it furnishes to New York customers as an integral part of it…
Is the income a securities market maker earns from its specialist and market-making trading taxed as business capital or as investment capital under New York's corporate franchise tax?
It is business capital. A registered securities dealer that acts as a market maker or specialist holds those securities as dealer property for sale to customers, so the income is business income (appo…
I rent scaffolding, hoisting equipment, and temporary walkways to contractors for construction projects and separately charge for disassembly — is any of this taxable, and can I buy my equipment tax-free for resale?
Taxable rental, exempt equipment purchase. Rentals of scaffolding, hoisting equipment, safety netting, and temporary walkways are always subject to sales tax as a rental of tangible personal property,…
We install closed circuit television/security camera systems for commercial buildings — is our installation charge a taxable sale, or can it qualify as an exempt capital improvement?
It depends on the component. A closed circuit television installer's charges for in-wall/ceiling wiring and cable installed like a building's electrical system can qualify as an exempt capital improve…
Is a former Merrill Lynch employee's reinstated restricted stock and stock option income, given in exchange for signing a noncompetition agreement, taxable by New York once he becomes a nonresident?
No. The Department concluded that the reinstated nonqualified RSUs and stock option units were consideration solely for the nonresident's noncompetition agreement, not compensation for work performed …
Does an investment in a certified Qualified Emerging Technology Company made in the form of convertible debt qualify for New York's QETC tax credit, and if so, in which tax year is the credit claimed?
No - not until the note converts to stock. A convertible note is a loan, not a contribution of property or ownership interest, so it isn't a 'qualified investment' under Tax Law § 606(r)(1)(C) when it…
My platform helps buyers and sellers complete two types of syndicated loan trades over the Internet, sometimes letting the seller input their own data directly instead of us doing it — is either product a taxable information service or software sale in New York?
Split result. Neither of a financial platform's two loan-settlement products is a taxable information service, because converting a subscriber's own data into contract form isn't furnishing new inform…
We're building a multi-million-dollar custom steam pipeline on our own land to supply a long-term industrial customer — does this construction qualify as an exempt capital improvement, or is it a taxable installation?
Exempt as a capital improvement. A custom-engineered, above-ground steam pipeline that a facility owner builds on its own land to supply an adjacent industrial customer qualifies as an exempt capital …
We built software for one airline, then repurposed it as the base for a licensed product we now customize and sell to many different airlines — is that taxable prewritten software, or exempt custom software?
Taxable. Software originally custom-built for one airline becomes taxable prewritten computer software once it's reused as the base product licensed and re-customized for other airline customers, beca…
My company provides automated voice-calling services to airlines, banks, and other businesses using proprietary software we keep entirely in-house — is our calling-service fee or our own software subject to New York sales or use tax?
Not taxable. An automated voice-message provider's fees for placing calls to customer-designated recipients aren't subject to New York sales tax, because the service isn't among the enumerated taxable…
My regulatory-compliance and investigative firm offers 15 different service lines (AML, OFAC, fraud reviews, forensic technology, background checks, training, and more) — which of these count as taxable 'detective services' in New York, and which are untaxed advisory work?
Split by activity, not by service line. A regulatory-compliance firm's advice-and-training work (reviewing policies, developing programs, training staff) is untaxed consulting, but the moment the firm…
We license IT and business-skills e-learning courseware, a searchable reference library, an optional mentoring add-on, and live instructor-led virtual classroom sessions — which of these are subject to New York sales tax, and how do we source tax when our customers' employees are spread across multiple states?
Split result. SkillSoft's hosted e-learning courseware is taxable prewritten software (license fees taxed based on where each licensed user is located, even without any download), its Referenceware se…
We sell interactive online e-learning courses, plus separate add-on charges for a reference library, a live mentoring service, and a course-planning consultation — which of these are subject to New York sales tax?
Mixed result. Highly interactive online e-learning courses are taxable as a sale of prewritten computer software (whether accessed online or downloaded), and a reference-library add-on is a taxable in…
I run trucks that only haul household goods for moving customers. Are those vehicles exempt from New York's Highway Use Tax?
Yes. New York's Highway Use Tax (Tax Law § 503.1) applies to operating a vehicle on the state's public highways, but § 504.5 exempts any vehicle used exclusively to transport "household goods" by a ca…
My organization is a certified tax-exempt fraternal insurance company, but I sell discounted books and gifts to members by phone/Internet through a 2008 law change targeting 'remote sales' — do I now have to collect New York sales tax on those sales?
Yes, must collect. A New York fraternal insurance company that is otherwise a certified tax-exempt organization must still collect and remit sales tax on its regular phone/Internet retail sales of boo…
I manufacture goods and sell them for resale to retailers under resale certificates, but sometimes the retailer's own customer pays part of the price directly to me instead of to the retailer — does that direct payment turn into a taxable sale by me?
No new sale. A window-treatment manufacturer that sells to retailers for resale (properly documented with resale certificates) does not make a new taxable sale, and owes no sales tax, when a retailer'…
My company prints and mails direct-mail advertising coupons for local merchants from an out-of-state printing plant to addresses all over the country, including New York -- do I owe New York sales or use tax on the mailings that go to New York addresses?
Mostly exempt. A national direct-mail advertiser's printed coupon materials, produced and mailed out of state to New York recipients on behalf of its franchisees' advertiser-clients, are exempt promot…
Does the federal Public Law 86-272 solicitation-only protection apply to S corporations, LLCs taxed as partnerships, and their owners for New York corporate franchise and personal income tax?
Yes, with limits. An S corporation whose only New York activity is soliciting orders is protected by PL 86-272 - which also makes it ineligible to be a New York S corporation, so nonresident sharehold…
My client manufactures displays in New York and sells FOB origin, with the customer's own common carrier picking them up at our dock -- do we still owe New York sales tax based on where the carrier ultimately delivers them, even though title passed at our loading dock?
Taxed at the delivery destination, not the dock. A New York display manufacturer selling FOB origin, where title passes to the customer at the company's own loading dock, must still collect New York s…
My client's records-retrieval business gets authorized requesters copies of their own confidential medical records, tax returns, or Social Security statements from the actual custodians -- are those retrieval fees subject to New York sales tax?
Not taxable, with one exception. A records-retrieval company's fees for obtaining and delivering an individual's own specifically-identified confidential medical, tax, or Social Security records -- us…
My catering company and a commonly-owned event-rental affiliate often work the same events for the same clients but bill separately -- can the affiliate keep using resale certificates with its vendors even though we're related companies?
Yes, as long as they're genuinely separate. A commonly-owned affiliate of a catering company that independently sells and rents event items (tents, flowers, entertainment) to the same customers at the…
Are downloadable wallpaper, games, ringtones, and ringback tones sold by a mobile phone carrier subject to New York's utility tax, telecommunications excise tax, or sales tax?
Mostly no, with one exception. A carrier that separately and reasonably bills for wallpaper, games, ringtones, and ringback tones can exclude them from the section 186-a utility tax, the section 186-e…
I sell access to hosted image-editing software that lets customers upload and manipulate product photos on my servers — no software is ever downloaded to the customer. Do I still owe New York sales tax on the license fees?
Yes, taxable. Adobe Systems Inc.'s annual license fees for its "OnDemand ASP Software" — a hosted product that lets customers upload and manipulate product images on Adobe's own out-of-state servers, …
I run a portable moving-and-storage-container business with a long list of separate charges — delivery, moving, storage, damage waivers, cleaning, repairs, supplies — which of these actually owe New York sales tax?
It splits by charge type. A portable storage container company's charges for the container rental itself, for storage at the dealer's warehouse (and access to it), for moving to/from that warehouse, f…
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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.