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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Is a yacht club condominium a taxable social/athletic club, is the sale of a boat-slip condo unit itself taxable, and can the condo buy maintenance services tax-free for resale when it bills unit owners for maintenance?
The condo IS a social/athletic club, so its Common Expense assessments to unit owners are taxable dues -- but a slip unit's sale is an untaxed real property sale. Maintenance work billed for one owner…
For a long-distance telephone reseller offering switched service, private lines, 1-800 numbers, calling cards, debit cards, and billing services, which specific charges are taxable New York intrastate telephone service and which are exempt (interstate calls, or purchases the company resells to its own customers)?
Whether a call is taxable turns only on where it originates and terminates (intrastate = taxed, interstate = exempt), never on the customer's billing address; almost everything the company itself buys…
Is a construction contractor's purchase of required progress and special construction photographs -- submitted to New York City as a condition of getting paid -- exempt as a resale or as part of a tax-exempt capital improvement?
No to both. The photographs are taxable tangible personal property that the contractor itself consumes to satisfy its contract and get paid (not a resale to the City), and since the photos never becom…
Does a not-for-profit 'call before you dig' organization owe sales tax on its member dues, which fund both its damage-prevention education/seminars and its call center that locates underground utility lines?
Yes -- the call center that fields calls from contractors and relays them to utility members is itself a taxable telephone answering service, and because members can't buy the education, seminar, trai…
In the modified opinion, are an asbestos contractor's plastic bags and poly taxable, and what changes when the removal is part of a capital improvement?
Same core result as the original opinion — disposal bags are 'actually transferred' (not taxable) and plastic poly is consumed by the contractor (taxable) — but this modified opinion adds that when th…
When a retailer sells discounted cellphones to customers who also sign a carrier service contract, are the phones taxable 'promotional items' the retailer can't buy for resale?
The phones are purchased for resale, not promotional items. Because the retailer sells the phones (bundled with service) at a profit rather than giving them away or selling below cost, it buys them ta…
Can a trash-removal company buy portable compactors tax-free for resale when it supplies them to customers as part of its trash-removal service?
No. Because the hauler and its customer both use the compactors as part of one bundled trash-removal service, the compactors aren't purchased for resale — so the hauler owes sales tax on buying them, …
Is a company's service of testing computer circuits taxable when the circuits will be assembled into products held for resale?
No — not taxable here. Testing computer circuits is a taxable service on tangible personal property, but because the circuits will be assembled into products held for resale, the testing isn't taxed, …
Are an asbestos-removal contractor's purchases of plastic disposal bags and plastic wall/floor poly taxable when the work is done for tax-exempt property owners?
The plastic disposal bags are 'actually transferred' to the customer along with the asbestos, so buying them isn't taxable; but the plastic poly used to seal walls and floors is consumed by the contra…
Must a national fraternity's parent organization collect sales tax when it sells pins, cards, and supplies to its chapters and members?
Yes. When the parent organization sells items like ID cards, pins, and supplies to chapters or members, those are retail sales — it buys them tax-free for resale but must collect sales tax on the sale…
Is a 'marking service' — attaching price tickets to merchandise — a taxable enumerated service, and is it exempt as work on goods held for sale?
It is taxable. A 'marking service' — attaching price-ticket labels to garments and other merchandise — is one of the enumerated services taxed under Tax Law § 1105(c). And it can't be purchased for re…
Can a trash-removal company buy the containers it rents to customers tax-free as a purchase for resale?
No. A trash-removal company cannot buy its trash containers exempt as a purchase for resale, even when it separately states a container rental charge on the customer's bill. Under Tax Law § 1105(a) an…
Are a company's charges for letting a medical practice use its leased MRI machine a taxable rental of equipment, or a nontaxable service?
Yes — the charges are a taxable rental of equipment. Where a company subleases an MRI system to a professional corporation (PC) and the PC's own technicians operate the machine and direct its use — wh…
Can a retailer buy labeling and hanging services for its resale merchandise tax-free, and is use tax due if the work is done out of state?
No — the labeling and hanging services are taxable. When a clothing retailer hires a company to print and affix labels and put merchandise on hangers, those services are taxable under Tax Law § 1105(c…
Does a salvage broker owe sales tax on the storage and towing charges it pays to release insurance-owned vehicles headed for resale at auction?
No — with resale certificates. Salvage Management, a broker that tows and stores insurance-owned wrecked vehicles and sells them for resale at dealer wholesale auctions, does not owe sales tax on the …
When a natural gas utility sells and installs vehicle conversion kits, sells compressed natural gas (CNG) as motor fuel at its own filling stations, and wholesales natural gas to fleet owners and other filling stations, which of those transactions trigger sales tax, motor fuel excise tax, and section 186/186-a utility gross earnings tax?
Different treatment for each of five transaction types. The Brooklyn Union Gas Company planned to sell/install below-cost CNG vehicle conversion kits, sell CNG as motor fuel at its own filling station…
Are a soft-drink bottler's reusable trays and dispenser tanks, transferred to wholesalers on a deposit-and-return basis, taxable?
No — the trays and tanks are exempt packaging materials, and the bottler may buy them for resale tax-free. Clinton's Ditch Co-op Co., a soft-drink bottler, sells its 2-liter product in reusable plasti…
May a lessor buy a CAT-scan machine for resale, and are its lease charges exempt under the production exemption?
The machine can be bought for resale, but the lease charges are not production-exempt. Segal Equipment Associates owns a CAT-scan machine it leases monthly to a corporation that uses it to produce dia…
Is hazardous-waste cleanup and hauling to a disposal site taxable, is a separately stated transportation charge taxable, and can the company buy its supplies for resale?
The service is taxable trash removal, the separately stated freight is taxable too, and whether the supplies are resale-exempt is a factual audit question. West Central Environmental Corp. cleans up h…
When a trucking firm hauls material for contractors with its own driver, is it providing a nontaxable transportation service or a taxable rental of the truck — and when does it owe tax on the material?
Hauling with the firm's own driver and control is a nontaxable transportation service; only when the firm buys and sells the material does resale-tax handling apply. C.K. Industries Corp., a trucking …
Can a caterer buy paper cups, napkins, tablecloths, and plastic tableware tax-free as items bought for resale?
Only partly. Festive Caterers Inc. asked whether its purchases of paper cups, napkins, tablecloths, and plastic tableware are exempt as items bought for resale because they become part of a customer's…
Is charging to irradiate a core sample — making it radioactive so it can be tested — a taxable service in New York?
Yes — it's taxable. Company X, which analyzes core samples, needs each sample made radioactive before testing; Company Y performs the irradiation and returns the radioactive sample with a report of th…
Is a vending operator's purchase of a video game machine a nontaxable purchase for resale because he later 'contributes' it to a partnership with the location owner?
The purchase is taxable — it is a purchase for use, not a purchase for resale, and later contributing the machine to a partnership doesn't change that. Folz Amusement & Game Co. buys a video game mach…
Does a sale-and-leaseback of leased vehicles trigger sales tax, or is it exempt as a purchase for resale?
A sale-and-leaseback of vehicles that stay in a leasing business is made solely for resale, so neither leg is subject to sales tax. Key Capital, an auto-leasing company, proposed to sell its already-l…
If an owner buys a recreational vehicle to rent out but also for some personal use, can the purchase be tax-free as a purchase for resale?
A vehicle bought both to rent out and for the owner's own use is not purchased exclusively for resale, so the purchase is a taxable retail sale — the resale exclusion doesn't apply. May Associates ren…
If an owner buys a vehicle to rent out but also uses it personally, is the purchase tax-free as a purchase for resale?
A vehicle bought both to rent out and for the owner's own use is not purchased exclusively for resale, so the purchase is a taxable retail sale — the resale exclusion doesn't apply. May Associates lea…
Does a caterer owe tax on floral centerpieces it buys for customers, and are its leasehold improvements exempt as capital improvements?
A caterer's floral centerpieces are taxable, and its leasehold marble floor and new ceiling are capital improvements, but its disco lights are taxable trade fixtures. Bayshore Catering buys standard f…
How is sales tax applied when a company rents equipment from its own subsidiary — for re-rental, for its own use, plus fuel and maintenance?
Equipment a company rents from its subsidiary to re-rent to customers is a purchase for resale (not taxable, with a resale certificate), but equipment it takes for its own use in exchange for maintena…
If a recording studio leases sound and recording equipment from a supplier and then re-rents it to studio customers, does the studio owe sales tax on the equipment lease it pays to the supplier?
No — the equipment leases the studio pays to its supplier are not taxable. Because the studio re-rents that same sound and recording equipment to its customers for a consideration, a 'rental' is itsel…
Can a legal publisher buy the statutes, court reports, and periodicals it researches tax-free — as resale, research materials, information services for resale, or production supplies?
Generally taxable — the Department rejected all four exemption theories, though a separate newspaper-and-periodical exemption may still cover some items. Lawyers Co-operative buys statutes, court repo…
Are an ad agency's purchases of photography and artwork taxable when the agency incorporates them into camera-ready mechanicals it sells to its clients?
No — the photography and artwork are not taxable, and no use tax applies. The ad agency buys artwork and photography and incorporates it into camera-ready mechanicals that it sells to its clients. In …
How is New York sales tax handled on films leased to TV networks — where delivery controls tax, whether split in/out-of-state broadcasts reduce the base, and which production purchases are exempt?
Leasing films is a taxable sale keyed to where the film is delivered, and the full lease price is taxable even when the broadcast reaches viewers outside New York. A lease is a 'sale' (§ 1101(b)(5)), …
Does a manufacturer owe sales tax when it buys a service contract that it passes through, as part of the product's price, to the end user?
No — the manufacturer's purchase of the service contract is not taxable, because it buys the contract for resale. A maintenance or service contract on tangible personal property is itself a taxable pu…
How do New York's production exemptions and the resale exclusion apply to a maker of lithographic plates and printer supplies — and when does the New York City tax still apply?
Mostly exempt — with a New York City carve-out and item-by-item rules. Polychrome Corporation makes lithographic plates and film and a range of printer supplies. The Department applied New York's prod…
Does a caterer owe sales tax on tableware it rents to use in serving meals, even though it collects tax from customers on the full price of the catered meals?
Yes — the caterer owes tax on the rented tableware and must still charge tax on the full meal price. Gates Circle Realty Corp., a caterer, rented plates, cups, glassware, flatware and similar items to…
Does a display maker owe sales or use tax on artwork it buys from suppliers, and does the resale exclusion or the production exemption apply?
It depends on how the artwork is used — resale is tax-free, and artwork consumed to produce a display for sale is exempt except for New York City tax. Ledan, Inc. designs and sells displays and orders…
When a motel buys soap, paper cups and bathroom tissue to place in guest rooms, can it buy them tax-free as a purchase for resale or as production materials?
Taxable — the motel must pay sales tax on these supplies. Lanz's Motel asked whether items like plastic or paper cups, bathroom tissue and guest soap that it places in rooms for guests can be bought t…
Are a wholesaler's gummed labels — some on shipping cartons, some price labels on the product — taxable when the wholesaler buys them?
Both kinds of labels are exempt — on different grounds. Trans World Music Corporation, a wholesaler, buys gummed labels: some are affixed to the inside or outside of the cartons shipped to customers (…
Are a printer's plates and negatives exempt from New York sales tax, and does the exemption reach New York City's tax?
Exempt as production equipment everywhere except New York City. D.L. Terwilliger Co. Inc., a printer under audit for December 1975 through May 1980, asked whether it owes sales tax on the plates and n…
Is fuel oil a property owner buys to heat a city-owned building tax-exempt as a resale to the city or a purchase as the city's agent?
Taxable — it was neither a resale nor an agency purchase. Tamas Friedman owns a Brooklyn building whose furnace also heats an adjacent building owned by the New York City Housing Preservation and Deve…
Is raising dogs and ferrets for labs and pets 'farming,' and is the feed a tax-free purchase for resale as part of the animals?
Taxable — it's not farming, and metabolized feed isn't bought for resale. Marshall Research Animals, Inc. commercially raises and feeds dogs and ferrets for sale to laboratories and as pets. It argued…
Can a caterer that prepares complete airline meals buy the paper containers, cups, foil, utensils, and bags used to package the meals tax-free as purchases for resale?
No. Sky Chefs prepares complete meals sold to airlines and buys paper containers, cups, foil, utensils, and bags to package them. These are not tax-free purchases for resale. Customers do not buy the …
Does a cable-TV operator owe sales and use tax on the materials it builds into its system and on the tools, vehicles, and equipment it uses to operate?
Yes. Seneca Cable TV owes New York State and local sales and use tax on both (1) the materials it assembles or builds into its buildings, head end, trunk distribution system, and test equipment, and (…
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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.