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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Does an out-of-state manufacturer exceed mere solicitation (and lose Public Law 86-272 protection) when a subsidiary delivers its products and it licenses university-developed products for a royalty?
Wausau was not subject to Article 9-A tax on the stated facts, but some of its New York activities went beyond solicitation. Its rare in-state repairs were de minimis under the Public Law 86-272…
Does an armored car company owe sales tax on separately priced 'cash management services' like ATM cassette loading and deposit counting?
An armored car company's separately priced 'cash management services' (ATM cassette preparation, change order preparation, currency verification, deposit and envelope processing) aren't taxable…
Does an architectural firm owe sales tax on the printed 'bid set' copies of blueprints it separately charges clients for at cost?
An architectural/engineering firm's design fee isn't taxable, but when it separately charges its clients for printed 'bid set' copies of final working drawings (at cost, for use soliciting…
Is an unauthorized foreign life insurer that makes New York mortgage loans through a disregarded LLC subject to Article 33 instead of Article 9-A, and what is its tax?
It is subject to Article 33, not Article 9-A, and its computed tax is zero but it must still file. Because the single-member LLC is disregarded, its New York mortgage-lending activity is treated as…
Can a parking company keep only electronic records from its Ticketech ticketing system and stop storing thousands of boxes of paper parking tickets?
Yes, in principle -- New York's electronic recordkeeping regulations apply broadly to any tax record a taxpayer must retain, so a parking operator's Ticketech electronic records can satisfy the Tax…
Does an out-of-state data backup company owe New York sales or use tax on its subscription service and the connector software it installs on subscribers' computers?
The subscription fee for an off-site data backup and recovery service isn't subject to New York sales tax because it's not an enumerated taxable service (and the data being stored isn't taxable…
Can an asbestos removal contractor get a sales tax refund on the disposable materials and protective equipment it buys, since those items end up contaminated and legally owned by its customer as waste?
Yes -- because federal and state law make the customer the legal owner of contaminated asbestos waste, an asbestos-removal contractor's disposable supplies (suits, gloves, bags, filters, sheeting,…
Is an insurance holding company's aircraft-owning affiliate's plane an exempt commercial aircraft when 80% of its use flies employees and guests of its parent insurer for a cost-based fee?
Yes -- because the aircraft-owning subsidiary is a genuinely separate legal entity that retains dominion and control (through an independent management company) and devotes about 80% of the…
Are nail clipping, grooming, and medicated baths performed by a veterinarian's staff subject to New York sales tax?
It depends on WHY the service is performed -- nail clipping, grooming, or bathing done as a necessary, medically-related part of treating a diagnosed condition (like an ingrown claw, flea…
Is a not-for-profit political action committee that qualifies under IRC section 527 subject to New York's Article 13 tax on unrelated business income?
No. New York's Article 13 tax on unrelated business taxable income applies only to organizations described in IRC section 511(a)(2) -- those exempt by reason of IRC section 501(a), meaning…
Are a New York corporation's commission receipts allocated to New York when its sole shareholder-president never works out of its New York office?
No, none of the commission receipts are allocated to New York. A corporation's receipts from compensation for services are allocated to New York if the services are performed there, including by a…
Is an out-of-state alarm-monitoring company doing business in New York when it uses third-party contractors to install and service equipment for its New York customers?
Not from the contractors alone. An out-of-state alarm-monitoring company with no New York office, employees, representatives, or inventory is not doing business in New York merely because it hires…
If a nonresident owns a seat (membership) on a New York stock or commodity exchange and leases it out for income after moving out of state, is that rental income - and any later gain on selling the seat - taxable as New York source income?
Yes. Because an exchange seat has its business situs in New York, leasing it out with regularity and permanency is carrying on a business in New York under Tax Law § 631(b)(1), so the rental income…
Are a medical-equipment company's rentals of prescription therapeutic hospital beds and wound-care (V.A.C.) devices subject to New York sales tax?
The beds and devices themselves qualify as exempt medical equipment, so a sale or rental directly to a patient or an exempt organization isn't taxable -- but because this company actually rents them…
Does a contractor installing underground high-voltage electric cable and related equipment for a utility owe New York sales tax on the materials it buys for the job?
Mostly yes -- because installing the cable, conduit, and related utility equipment is a capital improvement to real property (so the contractor's charge to the utility isn't taxable if it gets a…
Is a stock-photo business's sale of its own photographs subject to New York sales tax, and does it matter whether the images are delivered on paper/disk or purely electronically?
It depends on the format and the rights sold -- selling a photo on paper, disk, or other tangible medium is a taxable sale of tangible personal property, but delivering the same image purely…
Is the per-event fee a singles-events organizer charges attendees a taxable admission charge under New York sales tax law?
No -- because the primary purpose of the events is to facilitate dating (a social-networking service), not to provide entertainment or amusement, the organizer's per-event fees aren't taxable…
Is a Florida corporation that owns entities holding New York lottery annuity rights doing business in New York, and can it claim a credit for income tax withheld on those payments?
No, it is not doing business in New York and owes no Article 9-A tax. A corporate partner is subject to Article 9-A only if a partnership it owns is doing business in New York; here the entities…
As a national retail chain leasing store space, I'm structuring various long-term lease deals with landlords -- some in existing or planned shopping centers, some with due-diligence contingency periods before I'm bound, some involving lease extensions or a right of first refusal instead of a purchase option. Which of these eight common leasing scenarios trigger New York's Real Estate Transfer Tax, and when exactly does the tax clock start running in each?
This landmark 8-scenario ruling establishes the framework later RETT lease opinions rely on. A long-term lease (49+ years including renewals, with substantial capital improvements) is only taxable…
Is a ferry company that runs New York City interborough routes under a city lease taxed under Article 9 (sections 183/184) or Article 9-A, and how are its ferry receipts allocated to New York?
It is taxed under Article 9-A, not sections 183 or 184. Its ferry income is business income allocated under section 210.3(a)'s three-factor formula. Within that formula, its ferry receipts are…
Is a fiber optic network company's monthly charge to lease dark (unlit) fiber optic cable subject to New York sales tax as a telephone service, and what about its lit fiber/WDM/Metro Ethernet services?
Dark-fiber charges are not taxable on these facts: the company leases unpowered cable without activation equipment, treated like a real-property lease. Its lit WDM and Metro Ethernet services are…
Does a fire-protection installation contractor owe sales tax on the labor portion of components fabricated for it by a commonly owned sister company?
Yes -- even though the two companies share the same two owners, officers, and workplace, because each maintains its own employees, payroll, books, and sales tax registration, they're treated as…
Does a contractor who installs underground telephone conduit and cable for a phone company owe New York sales tax on rented construction equipment, purchased materials, and its installation charges?
Equipment rentals and purchases of conduit, footings, and manholes are taxable on these facts, even when installed on public land. Qualifying capital-improvement installation charges are untaxed…
Are a corporate partner's allocations of a limited partnership's trading profits investment income or business income for New York Article 9-A purposes?
The character flows through from the partnership. Under the aggregate method (Regulations section 3-13.3), a corporate partner is treated as realizing each partnership item directly from its…
When an Empire Zone company has a short tax year with none of the four quarterly measuring dates, how does it count employees for the EZ and QEZE credits?
Use the headcount on the last day of the short year. The EZ wage credit, EZ employment incentive credit, QEZE tax reduction credit, and QEZE real property tax credit normally average employees…
Are a dental laboratory's charges to dentists for bite blocks, models, and impression trays used to make dentures, crowns, and bridges subject to New York sales tax?
No -- because dentures, crowns, bridges, and similar prosthetic devices are exempt prosthetic aids, and the bite blocks, models, and impression trays are really just tools the lab uses (and bills as…
Are an affiliate's receipts from selling mobile-phone equipment subject to New York's section 186-e telecommunications excise tax, and do they pass through to its members or partners?
No, the equipment receipts are not subject to section 186-e. An affiliate (Equipco) that sells mobile-telecommunications equipment but does not sell the telecommunications service itself is not a…
Are the speech, occupational, and physical therapists who provide preschool special-education and early-intervention services independent contractors or employees for New York withholding tax purposes?
The therapists are employees, not independent contractors. Early Learning controls the means and methods of their work - setting hours, assigning children, and requiring supervised progress reports…
Are a trade-show display company's charges for delivery, freight, drayage, assembly, and dismantling subject to New York sales tax?
It depends which charge and when -- delivery, drayage, and assembly charges billed as part of selling or renting a display are just part of the taxable sale price and can't be carved out, but…
Does a car dealer owe sales or use tax on loaner vehicles it provides free to customers under an extended warranty's rental-car benefit?
No -- because the dealer's rental-fleet vehicles are used exclusively for rental purposes, the dealer can buy them tax-free for resale in the first place, the manufacturer's reimbursement to the…
How does a New York resident compute the use tax owed when bringing a custom-built vessel, constructed and outfitted out of state, into New York for use?
The use tax is based on the full cost of the vessel and everything used to build and outfit it -- purchase price of the vessel, all incorporated materials, plus the cost of any taxable…
Does a coating company that processes its customers' tools and precision components for them qualify as a 'producer' entitled to New York's production exemption on its own machinery, tools, and utilities?
The coating company may qualify for production exemptions when its processing is part of a customer's manufacture of property for sale. Machinery, equipment, parts, tools, and supplies must be used…
Is a sign painter's charge for painting temporary advertising on car dealers' windshields and building windows subject to New York sales tax?
Painting advertising copy on a dealer's cars held for resale is not taxable: section 1105(c)(2) excludes printing or imprinting on tangible property held for resale. Painting copy directly on a…
Is a public university's separate vehicle-registration fee subject to New York sales tax, and what about its parking fee?
The university's separate $20 vehicle-registration fee is not taxable because it confers no parking privilege. Its parking fee is taxable. Although SUNY is an exempt governmental entity, its parking…
Is a movie theater company's purchase of armored courier service to transport cash receipts subject to New York sales or use tax?
Yes -- armored car and bonded courier services are taxable 'protective and detective services' under New York law, and because the cash bags the theater's bank picks up are ultimately delivered to…
Is a pipeline inspection company's charge for running a robotic 'smart pig' through a customer's pipeline subject to New York sales tax?
Yes, for the portion of the pipeline located in New York -- because the inspection keeps the customer informed of the pipeline's condition to help maintain it at its normal level of readiness and…
How does New York sales tax apply to a contractor's installation of gas mains and telephone conduit, and to the road-building materials and conduit it buys for those jobs?
Qualifying gas-main and phone-conduit installation charges are exempt capital improvements with a proper certificate. The contractor's conduit purchases remain taxable even when installed under…
Are membership dues paid to a fox-hunting club subject to New York's club dues sales tax?
No -- because the club's sole purpose is fox and coyote hunting on horseback with hounds, and it maintains no social or athletic facilities, doesn't sell meals, and provides no other member…
Is the fee a carnival game operator charges patrons to play a game of chance for a prize a taxable admission charge under New York sales tax law?
No -- because patrons aren't charged anything just to enter the tent or area where the games are set up, the fee to actually play a game for a chance at a prize isn't an admission charge to a place…
When a corporate wellness consultant bundles nontaxable coaching, handouts, workshops, textbooks, and on-site massage into one yearly package price, is the whole charge taxable, or just the textbooks?
It depends on how the bill is itemized. Dr. Coff's wellness coaching, workshops, and on-site chair massage are nontaxable services, and the handouts and wellness calendar are incidental freebies…
Is a telecom subsidiary's brand-new corporate jet purchase exempt from New York sales tax when it's delivered out of state and used mostly to fly the parent company's affiliated group?
Yes. A telecom subsidiary's purchase of a new aircraft — delivered out of state and hangared in New York — qualifies as exempt commercial aircraft because the subsidiary keeps full operational…
Is a corporate subsidiary's company-owned aircraft, and the fuel and maintenance it buys for it, exempt from New York sales and use tax when the subsidiary flies its parent company's people over 95% of the time for a cost-based fee?
The aircraft qualifies for the commercial-aircraft exemption on these facts, and its maintenance and repair purchases and services qualify for exemption. Its transportation fees are not an…
Are a retired New York public school teacher's IRC section 403(b) tax-deferred annuity (TDA) distributions exempt from New York personal income tax?
The full public-pension exemption applies only to the extent TDA distributions are attributable to amounts actually contributed by New York State, its subdivisions, or agencies. If those entities…
Is specialized equipment sold to blind and visually impaired people — video magnifiers, Braille note-takers, talking GPS units, and reading scanners — exempt from New York sales tax as prosthetic aids?
Yes. Video magnifiers, Braille and voice note-taking devices, their GPS attachments, reading scanners, and the specialized proprietary software bundled with them are all exempt from New York sales…
Is a corporate flight subsidiary's aircraft-leasing and in-house air-transportation setup exempt from New York sales tax as a 'commercial aircraft,' and does a corporate merger of the flight subsidiary trigger sales tax on the transferred plane?
The affiliate's payments were for nontaxable air transportation services, not an aircraft rental, because the flight subsidiary kept control of the aircraft. Aircraft used more than 50% for…
Is a box of frozen, individually wrapped, fully cooked chicken sandwiches sold at a warehouse club subject to New York sales tax as a taxable 'sandwich,' or exempt as grocery food?
No. A box of 12 individually wrapped, fully cooked, frozen chicken sandwiches sold in a warehouse club's freezer case is exempt from New York sales tax as food for human consumption. Even though New…
Are elevator inspection, consulting, design, and expert-witness services taxable as real property maintenance in New York, or exempt when they're government-mandated code inspections?
Discretionary elevator condition inspections (for sales, financing, modernization planning, or avoiding future violations) are taxable as real-property maintenance services, but an inspection…
Is an out-of-state computer-hardware company that sells in New York only through one home-based sales representative exempt from New York franchise tax under Public Law 86-272?
Yes, it is exempt from Article 9-A franchise tax under Public Law 86-272. The company's only New York activity is one sales representative soliciting orders for tangible personal property…
Is the $7,500 salary Petitioner was paid for January 2003 New York source income under Tax Law § 631, even though Petitioner never physically entered New York State during that month?
The January 2003 salary may be New York source income in part. Because the petitioner performed no services for the employer in 2003, the Department treated the salary, like severance, as…
In a chain of landlord, tenant, and sub-tenant manufacturers sharing one electric meter, who owes sales tax on the electricity, and does any of it qualify for the manufacturing production exemption?
It depends on how precisely the electricity is measured and billed. A landlord or master tenant who sub-meters and bills a sub-tenant for its ACTUAL usage is making a taxable resale of electricity…
Does a planned members-only fitness club owe New York sales tax on founding-member loans, refundable deposits, monthly dues, and forfeited minimum-spending credits toward its restaurant, spa, and massage services?
The club's founding-member loans, refundable deposits, and monthly membership dues aren't taxable at all, because members have no control over the club's management or activities, so it isn't a…
When a condo association sub-meters electricity to bill unit owners for their actual usage, does it have to collect sales tax on those charges, and at what rate?
Yes. Once a condo association sub-meters and bills unit owners for their actual electricity usage, it becomes a vendor making a genuine resale of electricity and must register, collect, and remit…
Does an out-of-state HVAC service-contract manager with one New York employee and a network of local subcontractors have to collect New York sales tax, and how are capital-improvement vs. taxable repair charges split?
Yes. Even though the company has no office in New York and only one resident employee (who does site surveys, not repairs), hiring local subcontractors to perform HVAC installation, maintenance, and…
Can a casket manufacturer deduct a 5% early-payment discount from the taxable receipt when it sells caskets to New York funeral directors?
No. A 5% discount offered only to customers who pay by a specified date is an 'early payment discount' meant to encourage prompt payment, not a genuine price reduction, so New York law specifically…
Is an out-of-state corporation whose only New York activity is a researcher it hired to work at a New York university subject to New York Article 9-A franchise tax?
It depends on the worker status. If the New York researcher is the corporation's employee, that activity is doing business in New York and the corporation owes Article 9-A franchise tax and must…
Is a Texas parent that runs payroll for its New York operating subsidiary subject to New York Article 9-A franchise tax?
It depends on whose employees the New York workers are. A Texas parent that handles payroll for its New York operating subsidiary (PPNY) under the parent's federal EIN is subject to Article 9-A only…
Can a single-member LLC or its corporate owner claim New York Brownfield Cleanup Program tax credits, and when, if costs are incurred or property is placed in service before the program's first effective year?
Yes, the corporate owner claims them. If the LLC is disregarded, it is a branch or division of its owner, so the owner (taxable under Article 9-A) claims the brownfield redevelopment credit (site…
Is an out-of-state ready-mix concrete seller that delivers to New York in its own trucks protected by Public Law 86-272?
Yes, if the concrete is central-mixed. An out-of-state seller whose New York activity is a phone listing and delivery of central-mixed (plant-mixed) concrete in its own trucks -- where the slow drum…
Must a tax-exempt golf association collect sales tax on U.S. Open spectator admissions, hospitality tent/table packages, concession and mail-order merchandise sales, and can it use tax-included pricing?
Yes to admissions: spectator tickets to the U.S. Open golf tournament are taxable admission charges, and a hospitality package's charge in excess of the admission price is exempt as space rental…
Are sales commissions a mobile phone carrier pays to its equipment-selling affiliate for signing up customers taxable, and can that affiliate buy discounted phones tax-free as inventory for resale?
Sales commissions that a mobile phone service provider pays its affiliated equipment seller for signing up or renewing customer service contracts aren't taxable at all — they're not a sale of…
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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.