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 a monthly consumer newsletter listing manufacturer refund offers qualify as a tax-exempt periodical, so its sales aren't subject to sales tax?
It's exempt — the monthly 'Consumer's Bulletin' meets the five-part test for a periodical, so its sales aren't taxed. Rose Marie Thompson asked whether she must collect sales tax on sales of her publi…
When an out-of-state seller registered in New York ships goods to a New York customer of its out-of-state buyer (a drop shipment), and no exemption certificate is given, is New York sales tax due?
Yes — because the goods were delivered in New York and no exemption certificate was provided, New York State and local sales tax is due. Banner Metals (a Pennsylvania company registered to collect New…
Is the rental of a crane taxable when the rental company supplies the operator but the customer supervises and directs the crane's use?
It's taxable — because the customer directs and controls how the crane is used, renting the crane (even with the rental company's operator) is a taxable lease of tangible personal property. Enercon Sy…
When a truck lease separately bills the lessee for interest expense (plus a profit markup), is that interest charge part of the taxable rental receipt?
Yes — the separately billed interest charges, including the 10% profit markup, are part of the taxable rental receipt and sales tax must be collected on them. Island Leasing Corp. leases trucks to New…
Does filing the required bulk-sale notice, by itself, relieve the purchaser of all liability for the seller's unpaid sales taxes — and does timing matter?
No — filing the bulk-sale notice by itself does not relieve the purchaser of all liability; it is the timely notice combined with withholding the purchase price that limits and protects the buyer. Kle…
New York advertising agencies sometimes buy materials -- like photoengraving plates and drawings -- as agent for an out-of-state client, and those materials end up owned by that out-of-state client while briefly located in New York. Does that client's ownership of such materials in New York, by itself, make the out-of-state client corporation subject to New York's Article 9-A franchise tax?
No. The American Association of Advertising Agencies, Inc. (AAAA) raised the issue on behalf of member agencies located in New York that perform services for non-New York clients not otherwise subject…
Are restaurant meals for a municipality's employees on official business exempt from sales tax when the city pays directly, and when the employee pays and is reimbursed?
Exempt in both cases — meals for city employees on City business are exempt from sales tax whether the City pays the restaurant directly or the employee pays and is fully reimbursed. The City of Rome …
Is computer hardware and custom software used to produce books for sale exempt from New York State and county sales and use taxes?
Both are exempt — the computer hardware used to produce books for sale is exempt production equipment, and the custom software is nontaxable intangible personal property. Matthew Bender & Company, a l…
Is a fishing party boat that carries passengers from New York to New Jersey fishing waters and back — without discharging them in another state — an exempt commercial vessel engaged in interstate commerce?
Not exempt — because the boat brings its passengers back without discharging them in another state, it isn't engaged in interstate commerce, so its fuel, provisions, supplies, and repairs are taxable.…
When a contractor makes asphalt and uses it in its own capital-improvement road jobs, is that a 'sale' of the asphalt that qualifies the contractor for the production machinery and fuel exemptions?
No — the contractor uses (doesn't sell) the asphalt it makes for its own capital-improvement jobs, so it isn't a vendor and can't claim the machinery or fuel/utility production exemptions. Willets Poi…
Our finance subsidiary lends money to affiliated companies in the same corporate family to help fund their capital needs, evidenced by unsecured, non-negotiable intercompany notes that are never sold on any market or exchange. Does the interest we earn on those notes count as investment income from investment capital (potentially more favorably taxed) or as business income from business capital under New York's Article 9-A franchise tax?
Business capital, not investment capital -- meaning the interest is business income. Mobil International Finance Corp. lent money to various companies within the Mobil corporate family to help finance…
Is a weekly ad-heavy shopping publication a tax-exempt newspaper or periodical, so its sales aren't subject to sales tax?
It's exempt as a periodical — the weekly 'Buy-Lines Press' isn't a newspaper (no reports of current events), but it meets the periodical test, so its sales aren't taxed. B-L Press, Inc. asked whether …
Are 'start-up' charges and one-year warranty service on newly installed rooftop HVAC units subject to sales tax?
Split result — the 'start-up' is part of a nontaxable capital-improvement installation, but the later one-year warranty service is a taxable repair. Enercon Service, Inc. performs two services on roof…
Is a bulletin that is essentially a listing of manufacturers' refund offers a tax-exempt periodical, or a taxable information service?
It's taxable — a bulletin that is essentially a listing of manufacturers' refund offers is a taxable information service, not an exempt periodical or newspaper. Rose Marie Thompson asked whether she m…
New York Advisory Opinion TSB-H-80(245)I: Are exempt-interest dividends from a proposed regulated-investment-company share class investing exclusively in New York State and local bonds subject to New York Personal Income Tax or the Unincorporated Business Income Tax?
No, for either tax. The Department held that exempt-interest dividends excluded from federal gross income aren't part of the federal adjusted gross income that starts the New York Personal Income Tax …
New York Advisory Opinion TSB-H-80(244)I: Is a partnership that trades stocks, options, financial futures, risk arbitrage, and commodities solely for its own account subject to New York's unincorporated business tax?
No. The Department held that a partnership whose only activity is buying and selling stocks, options, financial futures, and commodities purely for its own account - with no customers and no commissio…
New York Advisory Opinion TSB-H-80(243)I: Is a limited partnership organized to acquire stock, make investments, and hold financial assets solely for its own account subject to New York's unincorporated business tax?
No. The Department held that Hoffman & Co., a limited partnership organized to acquire capital stock, finance investments in companies, and hold and trade securities and other financial assets - all s…
New York Advisory Opinion TSB-H-80(242)I: Is a limited partnership organized to acquire stock, make investments, and hold financial assets solely for its own account subject to New York's unincorporated business tax?
No. The Department held that Industrial Capital Group, a limited partnership organized to acquire capital stock, finance investments in companies, and hold and trade securities and other financial ass…
New York Advisory Opinion TSB-H-80(241)I: Does a technical editor, writer, and translator's income qualify as the practice of a profession exempt from New York's unincorporated business tax?
No. Even though more than 80% of the taxpayer's gross income came from personal services (writing, editing, interviews, and translations) and capital wasn't a material income-producing factor, the Dep…
Are annual assessments a homeowners' association charges its members subject to New York's tax on dues paid to a social or athletic club?
Yes (for the State tax) — a homeowners' association that maintains common recreational areas is a 'social club,' so its annual assessments over ten dollars are taxable dues, though Saratoga County cho…
Is the rental of a slitting machine used to cut metal coils to customers' specifications exempt from sales tax as production machinery?
Exempt — renting a slitting machine used to cut metal coils to customers' specifications is production machinery used in processing, so the rental receipts aren't taxed (outside New York City). Genera…
If a nonprofit employee club buys blocks of admission tickets and resells them to its members at cost, must it collect sales tax on the amounts members pay?
No. The Kermis Club, a nonprofit social club whose members are all employees of General Electric's Knolls Atomic Power Laboratory, buys blocks of admission tickets (for plays, amusement parks, and sim…
Is a bank that finances an equipment lease — advancing the money and taking an assignment of the lessor's interest, but never holding title or possession — a 'vendor' that must collect and remit sales tax?
No. Manufacturers and Traders Trust Company (M&T) finances equipment leases: the lessee picks the equipment and supplier, the lessor pays the supplier, and M&T advances the money to the lessor in exch…
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 …
New York Advisory Opinion TSB-H-80(136)I: Can a corporate officer count days worked from his out-of-state home as out-of-state days for New York nonresident income allocation, when he wasn't required to work from home?
No. The Department held that 20 NYCRR 131.16 allows a nonresident employee to allocate out-of-state days only where working outside New York was a necessity of the employer's business, not simply a ma…
Our parent corporation sells a large share of one subsidiary's total resale inventory and 100% of another's, but neither subsidiary is separately subject to New York's Article 9-A tax on its own. Can the Tax Commission force us to file a combined New York return covering the parent and those two subsidiaries, plus a third DISC subsidiary that has no direct purchases from the parent?
Yes for the two goods-supply subsidiaries, but no for the property-less DISC. The Gates Rubber Company sold to its subsidiary National Tires, Inc. an amount equal to about 5.6% of the parent's own sal…
Do buyers of fractional interests in a racehorse owe New York sales or use tax when the seller keeps racing the horse in New York before title actually passes to them?
No. Buyers of undivided one-fortieth interests in the thoroughbred stallion Spectacular Bid, under a syndication agreement, do not incur New York sales or use tax when the seller (Hawksworth Farm Asso…
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 (…
Does a settlement reached at a pre-hearing conference in another taxpayer's case resolve the taxable status of a similar transaction for a different taxpayer?
No. Cinema Shares International Distribution Corp., a film distributor, asked whether the taxable status of its transaction with Home Box Office (HBO) was resolved by a Tax Appeals Bureau 'determinati…
Is reimbursing an advertising agency for production costs — artwork and layouts the agency uses in placing your ads — a taxable transaction for the advertiser?
No. Cinema Shares reimbursed advertising agencies for production costs — layouts, artwork, and similar material the agencies produced and used in placing ads on Cinema Shares' behalf, and which were n…
New York Advisory Opinion TSB-H-80(104)S, (104)I: Does an employer awarding a compact car to an employee through a perfect-attendance drawing trigger New York withholding tax and sales tax, and when are they due?
Both taxes apply, and both are due immediately at the time the car is transferred. The value of the car is 'wages' for federal withholding purposes (compensation paid in property other than cash), and…
Is the New York Insurance Exchange exempt from New York State and local sales and use tax?
No. The New York Insurance Exchange, a not-for-profit corporation created under Insurance Law § 425-a to provide a facility for reinsurance and certain other underwriting, is not exempt from New York …
Our federal return showed positive taxable income, but because the Federal Job Credit forced us to give up a wage-deduction on our federal return, New York lets us subtract that same disallowed wage amount from our New York entire net income -- which put us into a New York net operating loss for the year, even though we had none federally. Can we carry that New York-only net operating loss back to earlier tax years for a refund?
No. Allied Fence, Inc. reported taxable income of $2,380.35 on its federal return for the fiscal year ending January 31, 1979, but claimed a Federal Job Credit of $6,960.91, which under I.R.C. § 280C …
If a vendor gets a properly completed Exempt Use Certificate for replacement parts, must the buyer also separately tell the vendor whether the parts last more than one year?
No. A purchaser buying replacement parts for production machinery does not have to separately advise the vendor about the parts' useful life beyond what a properly completed Exempt Use Certificate (Fo…
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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.