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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Can a New York resident who made post-tax contributions to a Keogh Plan years ago, and later rolled that account into an IRA, exclude the return of those already-taxed contributions from New York taxable income once required minimum distributions begin?
No - Article 22 of the Tax Law contains no provision letting a resident subtract post-tax Keogh Plan contributions from federal gross income when the rolled-over IRA is later distributed. However, Tax…
Must a firm that writes radio news advertorials and places them on stations charge sales tax when it emails the client an MP3 copy?
No. The sales of the news advertorials are not subject to sales tax because the firm is providing nontaxable advertising services. The firm writes radio 'news advertorials' (financial-market-style ads…
New York Advisory Opinion TSB-A-15(1)C: Is an Internet access provider subject to the Tax Law section 184 additional franchise tax when it sells Internet access alone or bundled with VoIP?
No. The provider is not subject to the Tax Law section 184 additional franchise tax, because Internet access is not a telephone or transmission business under Tax Law section 179, and the provider's l…
Does a clinical laboratory's testing of pharmaceutical drug-trial samples qualify as exempt research and development, exempting its equipment and utility purchases?
Yes, the drug-trial testing is exempt research and development -- but not everything the lab buys qualifies. The lab tests clinical-trial samples to determine the safety and efficacy of new drugs (and…
Is a software maintenance and support contract taxable when it entitles the customer to upgraded versions of prewritten software?
Yes -- if the upgraded software is prewritten software, the whole contract is taxable unless the support and upgrade charges are separately stated. Selling prewritten computer software (including prew…
Must a tax-exempt 501(c)(3) library-support group collect sales tax on its semi-annual used-book sales?
Yes. The semi-annual book sales are taxable because the organization is operating a 'shop or store.' Although the group is an IRS 501(c)(3) and holds a New York Exempt Organization Certificate, the ex…
For a retail merchandising agency's in-store marketing services, which are taxable, and is the whole charge taxable if some services are?
Only the installation work is taxable; itemizing lets you tax just that. Installing signs and assembling mannequins are taxable services of installing or servicing tangible personal property under Tax…
Is a pension from the World Bank (International Bank for Reconstruction and Development) exempt from New York personal income tax as a pension from a U.S. government instrumentality?
No. The Department concluded the World Bank is not an instrumentality of the United States, so a World Bank pension doesn't qualify for the Tax Law § 612(c)(3)(ii) subtraction available for pensions o…
Are receipts from renting self-serve mini-storage units subject to NY sales tax as a storage service, or are they a nontaxable real-property lease?
They're a nontaxable lease of real property, not a taxable storage service. Tax Law section 1105(c)(4) taxes storage services, but the essence of a taxable storage service is that the owner relinquish…
Are an online provider's legal-document services (wills, entity formation, registered agent, trademarks, legal plans) subject to NY sales tax?
No -- none of these services is subject to sales tax, because each one's primary function is producing documents or providing a legal or agent service, not furnishing information, and legal and regist…
Is a tumor-treating-fields cancer-treatment device, with its supplies and replacement parts, exempt from NY sales tax as medical equipment?
Yes -- the device, its supplies, and replacement parts are exempt medical equipment when the patient is the buyer. The device produces alternating electrical fields, applied through scalp electrodes, …
New York Advisory Opinion TSB-A-15(2)C: Is a corporation dissolved by proclamation that merely holds title to land as an inactive nominee still subject to Article 9-A franchise tax after dissolution?
The corporation was subject to Article 9-A franchise tax from its incorporation through its dissolution by proclamation, but not after dissolution, because afterward it merely held title to land as an…
Is reformatting electronic data and transmitting it to third parties taxable, and must a mailing-list vendor collect tax from a customer who resells the information?
Reformatting and transmitting data isn't taxable; selling mailing-list information is a taxable information service, exempt only when bought for resale. The combined service of changing the format of …
Is a telecommunications carrier protected from the section 186-e excise tax if it accepts a resale certificate from a foreign carrier that has no certificate-of-authority number?
No. A section 186-e resale certificate (Form CT-120) is not properly completed without the purchaser's certificate of authority (COA) number, so it cannot rebut the presumption that the sale is taxabl…
Is a company providing temporary housing to students and interns in a former dorm operating a taxable 'hotel' for NY sales tax?
No. The accommodations don't qualify as a hotel, so the room charges aren't subject to State or local sales tax. The company rents rooms in a former college residence hall only to enrolled students or…
I hold an oil and gas lease on New York real property, and I'm extending its primary term by paying my lessor an additional sum, per an option clause in the lease. I want to record an affidavit documenting that extension with the county clerk. Do I have to complete and file Form TP-584 (the Real Estate Transfer Tax return), including Schedule B, to record that affidavit?
Yes. Extending an oil and gas lease's primary term -- even under an option clause already written into the original lease -- is itself an additional conveyance of an interest in real property, so Form…
Are an online marketing company's customer-review platform and its separately billed SaaS analytics product subject to NY sales tax?
The review platform isn't taxable but the analytics product is. The Core Offering -- which captures, moderates, and displays customer feedback on the client's and other retailers' websites -- compiles…
I set up an intentionally defective grantor trust (IDGT) and funded it with $5 million cash. I now want to exercise my substitution power to swap my New York apartment into the trust in exchange for cash equal to the apartment's appraised value. Since I already gave the trust the cash and I'm just swapping assets I control, is this exempt from New York's Real Estate Transfer Tax as a gift?
No -- it's taxable, not exempt. A grantor set up an intentionally defective grantor trust (IDGT), an estate-planning structure where trust assets are outside the grantor's estate for estate-tax purpos…
If one company sells the food and a separate subsidiary provides the cooking and serving labor, are the labor charges taxable catering in NY?
No, the subsidiary's food-preparation labor isn't taxable catering -- provided the two companies stay genuinely separate. Food-preparation services alone aren't a taxable service under section 1105(c)…
Are single-use osmolarity test cards used to diagnose dry eye disease subject to NY sales tax when sold to eye-care practitioners?
Yes, when sold to providers who use them for compensated care. The osmolarity test cards qualify as medical equipment or supplies under section 1115(a)(3) because they are used to diagnose a medical c…
Does the operator of a coin-operated game room with no admission fee and no other sales need a NY sales tax Certificate of Authority?
No -- the operator is not required to obtain a Certificate of Authority, because he isn't a 'person required to collect tax.' Receipts from coin-operated amusement devices (here a pinball machine, juk…
If a social or athletic club opens membership to the public on a first-come basis, do its dues, initiation fees, and assessments stop being subject to NY sales tax?
No -- the club's dues, initiation fees, and assessments stay taxable. Removing the exclusivity-of-membership clause and admitting the general public does not change the club's status as a 'social or a…
If I bill taxable and exempt goods together as a single bundled charge, can I tax only the taxable portion or treat it as an exempt service?
No -- the entire bundled charge is subject to sales tax if any item in it is taxable. Billing taxable and exempt tangible personal property as one combined per-day charge does not transform the sale i…
Is the fee to enter walk-through haunted funhouses an exempt charge to use a 'device,' or a taxable admission to a place of amusement?
It is taxable. The fee is an admission charge to a 'place of amusement' under Tax Law section 1105(f)(1). Patrons pay to enter the physical space of the funhouses, move through them by their own locom…
Is assistive software that lets a severely disabled person operate a computer with a single switch (eye blink, breath puff) exempt as a prosthetic device?
Yes -- it qualifies as a prosthetic device exempt from sales and use tax under Tax Law section 1115(a)(4) when bought by a person with a disability. The software replaces the lost motor function the p…
Is an online food-ordering platform a vendor or co-vendor of the restaurant meals, and are its fees to restaurants taxable?
No -- the platform is not a 'vendor' of the restaurant meals under Tax Law section 1101(b)(8), and it cannot be designated a co-vendor jointly liable for the sales tax. It provides internet advertisin…
Is the salary a U.S. Foreign Service officer earns while assigned to the U.S. Mission to the United Nations in New York City subject to New York State personal income tax?
No federal or state law exempts Foreign Service wages from New York tax the way Tax Law § 631(e) exempts military pay. If Petitioner is a nonresident, his USUN wages are New York source income taxable…
Is a flat fee to use a golf simulator a taxable admission to a place of amusement, or a non-taxable charge to use a device?
It is not taxable. The flat fee is a charge for the use of the golf simulator -- a device -- not an admission charge to enter the place where the simulators are located. A charge to use an amusement d…
Are wasabi and soy seasoned almonds taxable candy/confectionery, or exempt food, when the seasoning contains some sugar?
They are exempt food under Tax Law section 1115(a)(1), not taxable candy or confectionery. Nuts that are not glazed or sugar-coated are exempt food. These almonds are dusted with a spicy, salty wasabi…
Are fines charged for violating parking rules taxable as parking-service charges under New York sales tax?
No -- parking fines are not subject to sales tax. While New York taxes charges for providing parking, garaging, or storing motor vehicles (and that tax applies even to many exempt organizations), a fi…
Is transferring tangible personal property to an LLC in exchange for a membership interest a taxable retail sale?
No -- contributing property to a limited liability company in exchange for a pro rata membership interest is not a taxable retail sale, so no sales or use tax is due. The Tax Law specifically excludes…
Is a service that facilitates obtaining FBI criminal-history records for an employer -- acting only as a conduit -- subject to sales tax as an information service?
No -- the service is not subject to sales or use tax. The provider merely acts as an authorized channeling agency, transmitting an employer's fingerprint/authorization request to the FBI and forwardin…
Are canned coffee-based energy drinks taxable soft drinks, or exempt coffee, when sold to go?
They are exempt. Sold in cans for off-premises consumption, Starbucks Doubleshot Energy coffee drinks are treated as coffee, not as a taxable soft drink. Coffee is the first listed ingredient and the …
Are tickets to a narrated sightseeing bus tour -- which includes brief staged street performances -- subject to NY sales tax?
No -- the bus tour tickets are not taxable. The tax on transportation services doesn't reach bus service (a bus seats 15+ and is excluded from taxable 'livery service'), so the tour isn't a taxable tr…
Are receipts from branded 'mind body' fitness classes (yoga-based but marketed for toning) subject to New York City sales tax?
Yes -- when the classes are aimed at improving bodily appearance (building strength, toning, sculpting), the facility is a 'weight control salon, health salon, gymnasium or similar establishment,' and…
If I arrange HVAC repair and maintenance through subcontractors and bill my clients directly, are my charges (including my management fee) taxable?
Yes -- you are the retail vendor of taxable repair and maintenance services, so all of your receipts from those services, including your separately stated management fee, are subject to sales tax. The…
When do employer contributions to a nonqualified deferred compensation plan count toward my company's MCTMT payroll expense -- when they vest, or when they're actually paid out to the employee?
When the compensation vests (or is earned, if later), not when it's distributed. New York's MCTMT payroll expense follows the federal FICA timing rule for nonqualified deferred compensation under IRC …
Is medical equipment loaned 'free' to hospitals along with catheters taxable, and does the medical-equipment exemption apply?
The loaned equipment is treated as part of the taxable sale of the catheters, not as a separate exempt item -- and it does NOT qualify for the medical-equipment exemption because it is sold to hospita…
Does a high-security facility that hosts customers' websites qualify as an 'internet data center,' making its equipment purchases exempt?
Yes -- the facility qualifies as an 'operator of an internet data center' under Tax Law section 1115(a)(37)(i). It is a purpose-built, high-security data center that houses customers' website servers …
Is a company that applies coatings to manufacturers' parts a 'producer,' and is its coating equipment and fuel exempt from sales tax?
Yes, with conditions. Applying coatings that change the nature of a customer's parts is 'processing,' and the coater is engaged in production for sale -- as long as the coated parts are, or become a c…
Is a private NYC gym a taxable 'athletic club' on its dues, and is it a NYC-taxable gymnasium whose fees owe city sales tax?
It is not a taxable social or athletic club -- the members don't control the activities, management, or selection and hold no proprietary interest, so the dues tax under section 1105(f)(2) doesn't app…
Is a fitness facility that includes a swimming pool a NYC-taxable gymnasium, and how are its food/drink and locker charges taxed?
As decided in 2014, no -- because the facility included a participatory-sports facility (a swimming pool), it was NOT a New York City-taxable 'weight control salon, health salon, or gymnasium,' and it…
Is a heart mitral-valve repair clip -- sold with its single-use guide catheter and delivery system for one price -- exempt as a prosthetic device?
Yes -- the system is exempt from sales and use tax as a prosthetic aid under Tax Law section 1115(a)(4). The implanted clip permanently restores the function of a leaking mitral valve, so it is a pros…
Is a nursery 'farming' for the sales-tax exemption, and is its equipment exempt -- even for plants already ready to sell?
The nursery is engaged in farm production only for plants it is still growing toward saleable size -- not for plants that already arrive (or already are) in the form it will sell, which is administrat…
We're buying THREE adjacent condo units with one purchase money mortgage and plan to combine them into a single home after closing, but the units aren't merged yet. Does our mortgage get taxed at the residential rate or the higher commercial rate?
The lower combined residential rate of 2.175% applies (rather than the higher commercial rate), extending the same "clear intent to combine" analysis from TSB-A-13(3)R to a three-unit combination. Eve…
I'm a touring musician who performs a few shows a year in New York City, and my business manager and accountant happen to be based there too. Does that subject all my self-employment earnings to New York's MCTMT?
Partially -- only on the earnings actually tied to the in-district work. Tax Law § 801(a)(2) taxes an individual's net self-employment earnings attributable to the Metropolitan Commuter Transportation…
After a 2012 policy change, does the section 1505(a)(2) premiums-based limitation still cap the Article 33 tax of an unauthorized life insurance corporation that has no New York premiums?
No longer. This modification of TSB-A-08(3)C applies a 2012 Department change (TSB-M-12(4)C): because an unauthorized life insurance corporation owes no additional premiums tax under section 1510(b)(1…
Can a bike-share operator buy all its equipment tax-free for resale, or only the bikes it actually rents to riders?
Only the bikes. The operator's purchase of the bikes is exempt as a purchase for resale, because riders rent the bikes -- they get custody, control, and direction of use during the rental. But the doc…
Is a diaper bundle priced over $110 still exempt if each component, sold separately, is under the $110 clothing threshold?
Yes -- the $269.95 diaper bundle is exempt from sales and use tax. Children's diapers and their components are exempt clothing when sold for less than $110 per item. Because each of the four component…
Is a copper-coated IUD taxable, or exempt as a drug or medicine like birth control pills?
It is exempt as a drug or medicine under Tax Law section 1115(a)(3). This opinion corrects an earlier 2010 ruling: the copper-coated intrauterine device works like a contraceptive drug (its copper rel…
On a new car, which amounts are taxed -- the trade-in credit, manufacturer's rebate, doc fee, DMV title/registration fees, and the extended warranty?
A trade-in credit reduces the taxable price (it's not taxed) if the dealer takes the trade-in for resale. A manufacturer's rebate does NOT reduce the taxable price -- the full sale price is taxed even…
If I use a grantor trust's swap power to trade tangible personal property I own for trust property of equal value, is that subject to NY sales or use tax?
Yes. Even though a grantor (defective) trust is ignored for income tax, the trust and the settlor are separate taxpayers for sales tax. Swapping tangible personal property to the trust in exchange for…
Is buying a commercial charter vessel subject to NY sales/use tax if it's in NY under six months a year, or if its hailing port reads 'New York, NY'?
The purchase is exempt from NY sales and use tax if the vessel is a commercial vessel used primarily in interstate or foreign commerce -- meaning 50% or more of the receipts from its activities come f…
Are ticket sales for a nonprofit's dining events subject to NY sales tax, and does calling the charge a 'Suggested Donation' change that?
Yes -- this organization must collect sales tax on its dining-event tickets. An otherwise-exempt organization that holds food-and-drink events with enough regularity, frequency, and continuity is trea…
Is a single-sign-on platform that consolidates and lets users search third-party research a taxable NY information service?
Yes. Although it offers single sign-on, the platform's primary function is to collect, consolidate, and present research from multiple providers -- with search, sorting, and saving tools -- which is t…
Can someone who holds only a remainder interest in a home - where a parent has a life estate and lives there - still qualify for New York's historic homeownership rehabilitation credit?
Yes, at least on two of the credit's requirements. New York held that a remainder interest is an ownership interest under EPTL § 6-5.1, satisfying Tax Law § 606(pp)(5)(A)(ii), and that residing at the…
New York Advisory Opinion TSB-A-14(1)C: Do purchased patents, prototypes and know-how qualify for the QETC facilities, operations and training credit as research and development property or as qualified research expenses?
Purchased patents, trade secrets and know-how are intangible and do not qualify as research and development property for the QETC credit; only tangible prototypes and designs used in research and deve…
Are a jeweler's charges for certificates of authenticity for its own pieces subject to NY sales tax?
No. Issuing a certificate of authenticity is an information service, but it falls within the exclusion for information that is personal or individual in nature and is not substantially incorporated in…
Which of an organization's four downloadable products qualify as tax-free e-books in NY, and do multiple-device use or a time-limited license change that?
Only one of the four (the study-guide curriculum) qualifies as an e-book and is therefore not taxable as an information service under Department policy -- and that stays true even though it can be rea…
New York Advisory Opinion TSB-A-13(11)C: Are a broker-dealer's 'matched principal transactions' principal transactions whose income may be sourced using the production-credit allocation method?
Yes. Through its disregarded registered broker-dealer SMLLCs, the petitioner is a principal, and matched principal transactions in which it bears a risk of loss on the price spread are principal trans…
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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.