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.
No New York rulings match these filters
Try a different search term or clear the filters.
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Can an asbestos-removal contractor get a refund of the sales tax it paid on the disposable supplies (bags, suits, filters, encapsulant, etc.) it uses on each job, since those items end up contaminated and legally become the client's waste?
Yes, for nearly all of the listed items. Because federal and state law makes the client (the waste generator) the legal owner of the contaminated disposal materials, and because those materials -- fil…
Is a professional pet-sitting business's dog walking, litter box cleaning, and pet feeding service subject to New York sales tax?
Yes, generally taxable. New York's sales tax regulations classify pets as 'tangible personal property,' so a professional pet-sitting service that walks dogs, cleans litter boxes, and feeds pets count…
Does a private company that licenses a county-owned golf course and must buy its own equipment (which becomes the county's property when the license ends) get the county's sales tax exemption on those equipment purchases?
No, the equipment purchases are taxable, not exempt. Even though the county eventually gets ownership of the equipment when the license ends, and even though the licensee sometimes identifies itself a…
Is a licensed architect's standalone rendering business -- producing computer renderings and design-concept images for developers, architects, and engineers -- subject to New York sales tax?
Generally taxable. Renderings and architectural models are tangible personal property, so producing and selling them is a taxable sale, and simply holding an architecture license doesn't change that i…
Can a dental practice's own in-house dental lab (making dentures, crowns, and bridges) buy its raw materials tax-free with a resale certificate, and does it matter whether the lab operates as a division of the practice or as a separate LLC that sells the finished prosthetics back to the practice?
It depends entirely on the business structure. If the dental practice runs the lab itself as a division, its purchases of precious metals, porcelain, and acrylics are taxable retail purchases either w…
Is the severance pay a nonresident receives after leaving a New York job subject to New York State personal income tax?
It depends on what the severance pay is for. If it compensates the former employee for past services performed in New York, it is New York source income and taxable, allocated using the same working-d…
Are lump-sum payments from a nonqualified deferred compensation plan to nonresident former employees taxable by New York, and does the employer have to withhold tax on them?
No. Lump-sum distributions from The Limited's nonqualified deferred compensation plan to nonresident, nondomiciliary former employees are exempt from New York personal income tax under the federal pre…
When an Illinois partnership that does business both in and out of New York sells stock it held in an affiliated company, is a nonresident partner's share of that gain taxable as New York source income?
It's not a flat yes or no. The Department held that because the partnership carried on business both within and without New York, its income (including the stock-sale gain) must be apportioned, but wh…
How does a company source receipts from licensing databases and electronically transmitting circulars, forms, manuals, and reports in the Article 9-A receipts factor?
They are other business receipts sourced to where the customer accesses the data. Receipts from licensing databases and electronically transmitting circulars, forms, manuals, and reports are 'other bu…
Are the electricity, gas, and fuel purchases a residential condominium association or trailer park makes to heat and light shared areas -- hallways, parking lots, pools, community buildings, water/sewage pumps -- exempt from New York sales tax as residential energy use?
Yes, generally exempt. Energy sources and services (fuel oil, gas, electricity, steam, propane, etc.) purchased by a residential condominium association or trailer park to heat, light, or operate comm…
Does a bank's dedicated aviation subsidiary -- a genuinely separate corporation that owns and flies its own planes for related companies' employees and customers, charged at cost -- qualify for the commercial aircraft sales tax exemption on new aircraft purchases and on the fees it charges affiliates?
Yes. A dedicated aviation subsidiary that is a genuinely separate, independently operating legal entity -- with its own assets, employees, bank accounts, and business relationships, not just a shell -…
Is a telecom company's 'backhauling' service -- transporting foreign-originated internet and voice/data traffic from a U.S. cable landing station or satellite earth station to a U.S. destination -- taxable New York telephony, or exempt international telephony?
Not taxable. Even though the physical transport happens entirely within the United States -- from a cable landing station or satellite earth station where the traffic first enters the country to an in…
Does a company that services and repairs manufacturers' machine tools have to register as a sales tax vendor, collect tax, and file returns on its repair charges?
Yes, generally -- but with a key exemption. Repairing and servicing machine tools is a taxable service, so the repair company must register as a sales tax vendor, collect tax on its taxable receipts, …
When a utility just delivers electricity or natural gas that a customer bought from a competing third-party supplier, is the utility's delivery/transportation charge itself a taxable 'electric service' or 'gas service'?
Yes, for now. Even when a customer buys electricity or natural gas from a competing third-party supplier under New York's retail-access programs, the utility's separate fee for transporting, transmitt…
Does the federal law shielding nonresidents' pension income from state tax (Public Law 104-95) cover a pension distribution a nonresident received back in 1995?
No. The federal preemption in 4 U.S.C. § 114(a) applies only to retirement income received after December 31, 1995, so a nonresident's 1995 pension distribution remains taxable New York source income …
Is a section 186 gas utility's distribution of subsidiary stock in a PSC-driven restructuring treated as a dividend subject to the excess dividends tax?
No. Where Brooklyn Union Gas, as part of a regulator-driven holding-company restructuring, distributes the common stock of certain subsidiaries (its 'Interests'), that distribution does not represent …
Is a registered limited liability partnership that elects to be taxed as a corporation federally also taxed as a corporation under New York Article 9-A?
Yes. Under section 208.1, the term 'corporation' includes an association taxable as a corporation, so a registered limited liability partnership (RLLP) that elects under the federal check-the-box rule…
We're ESDC. Our subsidiary QWDC is developing the Queens West waterfront project in Hunters Point. A private developer will borrow from outside lenders, and QWDC will be named mortgagee -- alone or as co-mortgagee -- before assigning its interest to the real lenders, with the mortgage likely severed, refinanced, and even converted from leasehold to fee financing over many years as multiple parcels are built out in stages. Is all of that exempt from mortgage recording tax?
Exempt for mortgages naming ESDC or QWDC as mortgagee; later increases in debt remain taxable. In 1989, ESDC (then the NYS Urban Development Corporation) joined the City of New York, the city's Econom…
If a family member with dementia or another serious illness is moved into a New York nursing home by a relative acting under power of attorney, does that make the person a New York resident for income tax purposes?
No. Because Rosa Schmitz's 1998 move into New York adult care facilities resulted from advanced Alzheimer's disease, bladder cancer, and breast cancer rather than her own voluntary intent to make New …
Do membership fees at two different Manhattan health-club facilities -- one with a full range of participant sports, the other with only traditional gym equipment -- owe New York State club-dues tax or New York City's separate tax on gyms and health salons?
It depends on the facility. Membership fees at both facilities escape New York's state/local social-athletic-club dues tax, because members have no ownership interest or control over either club. But …
If a pest-control company gives customers a 10% discount for paying an entire year's service contract up front instead of paying after each visit, can it exclude that discount from the receipts it charges sales tax on?
Yes. Because the 10% discount is offered at the moment the contract is signed -- in exchange for prepaying the full year rather than paying after each visit -- and isn't a reward for paying a set pric…
Does a newly formed golf and social club owned by a for-profit LLC have to charge sales tax on membership dues and a one-time initiation-fee deposit, when members hold no ownership stake in or control over the club?
No. Because members of the club won't own any proprietary interest in it, won't control its management or activities, and the only cap on membership is the physical capacity of the golf course and clu…
Are gastrostomy feeding tubes, the 'spike set' tubing kit, and feeding machines/pumps used for tube-feeding patients exempt from sales tax as prosthetic devices?
Yes. A gastrostomy tube -- which carries nourishment through the abdominal wall directly into the stomach for patients whose esophagus can no longer function -- qualifies as an exempt prosthetic aid b…
Are membership and initiation fees at Chelsea Piers' Sports Center -- with its pool, rock-climbing wall, running track, and boxing ring -- subject to New York's social/athletic club dues tax or New York City's separate gym/health-salon tax?
No, on both counts. Membership and initiation fees at the Sports Center are not taxable as social/athletic club dues under state law, because members have no control over the club's activities, member…
Is a hazardous-waste landfill cleanup -- capping, grading, drainage systems, groundwater collection, and related construction -- a tax-exempt capital improvement to real property, and are the materials used in it exempt from sales tax?
Yes to both. The remediation work -- capping, grading, drainage and groundwater collection systems, and related permanent construction at a state-registered hazardous waste landfill -- meets all three…
Can an out-of-state printing company accept a New York Resale Certificate (Form ST-120) from an out-of-state customer that isn't registered in New York, when the finished product is shipped directly to that customer's own customer in New York?
Yes. An out-of-state purchaser doesn't need to be registered with New York to use Form ST-120, Resale Certificate, in a drop-shipment transaction -- as long as it's registered to collect tax in anothe…
Is a Manhattan sports club's membership fee subject to New York's social/athletic club dues tax, or to New York City's separate tax on gyms and health salons?
No, on both counts. The club's membership fees are not taxable as social/athletic club dues under state law, because members have no control over the club's activities, member selection, or management…
Is a corporation subject to Article 9-A tax for the years it was active, and after it was dissolved by proclamation while merely holding property as nominee?
It is taxable for its active years but not after dissolution. The corporation (JN Parkville Inc/Corp) is subject to the Article 9-A franchise tax under section 209.1 for the taxable years it was incor…
Is a foreign corporation that holds New York real property for investment subject to the Article 9-A franchise tax?
Yes. A foreign corporation that owns real property in New York for investment purposes is owning property in the state within section 209.1 and 20 NYCRR 1-3.2(d), which subjects it to the Article 9-A …
Does custom-built trading software stay exempt from sales and use tax as 'custom software' after a corporate reorganization moves it into a separate subsidiary and licenses it back, and does giving customers free access to related front-end software trigger tax?
Yes, on every issue raised. Both the trade-execution algorithm software (built by a joint venture to the broker-dealer's specifications) and its own internally developed front-end trading software qua…
How does a company allocate receipts from leasing dark fiber-optic strands in the Article 9-A receipts factor?
Source them by fiber miles. For dark-fiber leases, fiber miles within New York equal the number of strands leased under a contract multiplied by the route miles located in New York. The New York porti…
Does paying an annual dividend to an investor in a For-Profit Zone Capital Corporation within 36 months trigger recapture of the zone capital credit?
No. An annual dividend paid out of current or accumulated earnings to an investor in a For-Profit Zone Capital Corporation, even within 36 months of the credit year, is not a redemption or disposition…
Are natural gas sales involving a municipal energy cooperative subject to the section 186-a tax, and is a 501(c)(3) cooperative exempt from the section 186 franchise tax?
The gas sales are taxable, and 501(c)(3) status is no shield from section 186. Section 186-a taxes sales of gas for ultimate consumption, not sales for resale; on the facts, the supplier's natural gas…
Do membership fees and monthly dues at a chain of Bally Total Fitness/Bally Sports Clubs locations in New York City -- which aren't all identical -- owe New York's social/athletic club dues tax or New York City's separate gym/health-salon tax?
Generally no, but it's location-by-location. Membership fees and dues at these Bally-affiliated clubs are not taxable as social/athletic club dues under state law, because members have no ownership in…
Are offshore feeder (Spoke) funds doing business in New York merely by being partners in a New York-present master (Hub) fund that only trades securities or commodities for its own account?
No. Under the self-trading exemption in section 209.2-a, an offshore (alien) Spoke feeder fund is not deemed to be doing business, employing capital, or maintaining an office in New York merely becaus…
Is a water-works corporation that is an instrumentality of a town water authority and a section 1411 not-for-profit local development corporation subject to New York franchise or utility taxes?
No. Country Knolls Water Works -- whose sole member is the Town of Clifton Park Water Authority (a public benefit corporation) and which was reincorporated in 1995 as a not-for-profit local developmen…
If a New York resident owns a Delaware LLC that only trades securities for its own account, and the LLC's other member is a trust with an out-of-state trustee, does New York tax the LLC or the trust?
Neither the LLC nor Petitioner (its NY-resident managing member) is 'carrying on a business' in New York, because trading and managing assets solely for one's own account under Tax Law § 631 doesn't c…
When two construction companies form a joint venture and each contributes equipment plus an operator under a subcontract arrangement, is that a taxable equipment rental to the joint venture, or a non-taxable service, and how does 'dominion and control' over the equipment decide which?
It depends on who actually keeps control of the equipment. A joint venture is treated as a separate entity from its corporate partners for sales tax purposes, so a partner furnishing equipment and an …
Is a monthly real-estate magazine that's almost entirely advertising and property listings, with only a handful of short articles, an exempt 'periodical' under New York's sales tax law?
No. Even though 'Showcase of Homes' is published monthly and contains a few short articles by different authors, the Department found it doesn't qualify as an exempt periodical because it's devoted al…
Does a building-cleaning company have to pay sales tax on the paper towels, garbage bags, rock salt, and cleaning agents it buys to perform its cleaning services, even though it separately bills customers for supplies?
It depends on what happens to the item. Supplies a cleaning company uses up performing its own service -- like garbage bags, rock salt, and general cleaning agents -- are taxable purchases, even if th…
Is a foreign parent's election to become a financial holding company under Gramm-Leach-Bliley a registration under the Bank Holding Company Act for section 1452(a)(9)?
No. A foreign parent corporation that owns a foreign bank and elects to be treated as a 'financial holding company' under the Gramm-Leach-Bliley Act has not thereby 'registered under the federal Bank …
Must a voluntarily dissolved corporation that merely holds record title to real property file Article 9-A franchise tax returns?
No. A voluntarily dissolved corporation that is merely the record title holder of real property, and is otherwise inactive, is not doing business in New York under section 209.3, and is not subject to…
In a PSC-driven utility restructuring, are spin-off transfers subject to the real estate transfer tax, and do they generate section 186 gross earnings, 186-a gross income, or excess dividends?
A spin-off that is a mere change of identity with no change in beneficial ownership is exempt from the real estate transfer tax under section 1405(b)(6); a spin-off that does change beneficial ownersh…
If a commercial lender that finances a retailer's inventory later seizes a blocked lockbox bank account that happens to contain sales tax the retailer collected from customers, does the lender become liable to New York for that sales tax money?
Yes. Even though a commercial finance company isn't a 'vendor' with its own duty to collect sales tax, once it takes control of a bank account it knows contains sales tax collected by the retailer fro…
Are the single-use 'fistula needles' used to connect a hemodialysis patient's blood vessels to the dialysis machine exempt prosthetic aids, or taxable medical supplies?
Exempt. Fistula needles -- the two short, sharp, single-use needles connected to tubing that link a hemodialysis patient's surgically created arteriovenous fistula to the dialysis machine -- qualify a…
Does a defense contractor owe sales tax on the materials and services it buys to maintain and caretake Navy-owned facilities under a cost-reimbursement government contract?
Yes, generally. Even though the contractor performs caretaker maintenance under contracts with the Navy (a tax-exempt federal agency) and gets reimbursed for its costs, the contractor -- not the Navy …
If a New York municipal bond mutual fund invests its short-term cash in a money-market mutual fund that also pays exempt-interest dividends, do those dividends stay exempt from New York State and City income tax as they pass from the money-market fund up to the bond fund and then out to the bond fund's own shareholders?
Yes. As long as each fund in the chain (the money-market "lower-tier fund" and the municipal bond "upper-tier fund") independently qualifies under IRC § 852(b)(5) to pay exempt-interest dividends, the…
When the Port Authority charged an airline its pro-rata share of common-area guard services and a federally mandated armed 'Boarding Security Program' at JFK Airport's international terminal, were those charges subject to sales tax?
No, on both counts, but for different reasons. The airline's pro-rata share of the Port Authority's common-area guard service charges is treated as 'additional rent' under the lease rather than a sepa…
A commercial mortgage held by a REMIC securitization trust is being defeased: the borrower gets a fresh loan secured by U.S. Treasury securities instead of real property, a new special-purpose successor entity takes over that Treasury-backed obligation, and the ORIGINAL mortgage and note get assigned to a brand-new lender as consideration -- with the original borrower still on the hook for the original mortgage debt, just now owed to the new lender. Does any of this trigger fresh mortgage recording tax, and can the new lender record a supplemental mortgage afterward tax-free?
No new mortgage recording tax on the assignment itself; a later supplemental mortgage stays tax-free too, unless it adds new debt. In a commercial mortgage defeasance, the original borrower owes a bal…
Does a financial-risk-analysis firm owe sales tax on the prewritten software it buys and uses to generate its reports, and does it have to charge customers sales tax on its portfolio risk-analysis and stress-test services?
Two different answers for two different things. The prewritten Algorithmics software the company buys and uses internally to help generate its risk reports is a taxable purchase, since it's used in pe…
Can a security company buy its 'security vehicles' tax-free for resale, when some vehicles are leased out with a uniformed driver providing patrol services and others are leased out empty for customers to park and move themselves?
It depends on how each vehicle is used, and it can't be mixed. Vehicles the company leases out WITH a licensed security-guard driver are an inseparable part of a taxable protective/patrol service -- t…
Is an online service that authenticates a customer's identity and electronically delivers a 'Digital ID' (a digital certificate for secure internet transactions) subject to New York sales tax?
No. Delivering a Digital ID -- an electronic identity credential, not a text file or software product -- over the internet doesn't match any of New York's specifically listed taxable services, so char…
Does an aircraft-owning LLC's lease of its jet to an aviation operator, which then charters the plane exclusively to one affiliated company at cost-reflecting rates, qualify for New York's commercial-aircraft sales tax exemption even though the plane serves only a single customer?
Yes. Because the charter payments the aviation operator receives reasonably reflect its actual costs of maintaining and flying the aircraft -- and the plane is devoted entirely to providing transporta…
Is replacing the vinyl liner of an in-ground swimming pool -- pumping out the water, removing the old liner, repairing the pool walls, and installing a new liner -- a tax-exempt capital improvement, or a taxable repair?
It's a capital improvement, not a taxable repair. Replacing the vinyl liner of an in-ground pool -- along with the related draining, removal, wall repair, and reinstallation work -- substantially prol…
Is a public university's $5 'vehicle registration fee' -- which the university says isn't a parking fee, but which its own rules describe as buying a parking permit -- subject to sales tax as a charge for parking?
Yes. Even though the university calls it a 'vehicle registration fee' rather than a parking fee, its own parking rules repeatedly describe the same $5 payment as buying a 'parking permit' that lets th…
When a company buys a 25% 'interest' in a private jet through a fractional-ownership program -- where a separate management company controls scheduling, pilots, maintenance, and can substitute other aircraft -- is that purchase a taxable acquisition of an aircraft, or a nontaxable transportation service?
It's a nontaxable transportation service, not a taxable purchase of an aircraft. Because the fractional-ownership program's independent Manager -- not the purchasing company -- retains real dominion a…
When disregarded single-member LLCs charge their tenants for utility services, which entity files the Form CT-186-A utility services tax return?
Each LLC files its own return, not the parent. Where domestic single-member LLCs (S1, S2, S3) -- disregarded for federal income tax but each owning an office building and charging tenants for utility …
Are an internet risk-management education platform, and separate market-risk and credit-risk analysis/forecasting services sold to financial professionals, subject to New York sales tax?
No, on all three services. Interactive online educational courses in risk management aren't taxable because educational services (interactive or not) aren't among New York's enumerated taxable service…
If out-of-state companies hire New York-based, homebased independent contractors to take inbound customer calls and orders by phone, does that alone make the out-of-state companies responsible for collecting New York sales tax on their New York sales?
No, not by itself. Having New York-based, homebased independent contractors take inbound telephone orders and provide customer service on behalf of an out-of-state company is a 'fulfillment service' u…
Browse New York rulings by topic
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.