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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Are fees an S corporation collects for an ordained minister's services (weddings, funerals, sermons, counseling) subject to NY sales tax?
No. New York taxes only specific, listed services, and ministerial services -- conducting religious services, sermons and public speaking, weddings, blessings, funerals, and spiritual counseling -- ar…
Are a NY company's R&D services for its out-of-state parent taxable when the resulting reports or samples are delivered outside New York?
No NY sales or use tax is due. The Department didn't need to decide whether the work is a taxable information service or nontaxable research and development, because sales tax is a destination tax: th…
Is the charge to install a large water slide at an amusement park a tax-exempt capital improvement, even on leased land?
Yes. The water slide is a capital improvement, so the charge to install it is exempt from sales and use tax. It substantially adds value, is permanently affixed (bolted to concrete piers, with in-grou…
My co-owner and I hold a Manhattan property as tenants in common (I own 12.32%, my co-owner owns 87.68%). We're building a condominium there: I'm paying my share of construction costs for the ground-floor commercial unit, then we'll swap -- I'll give up my TIC interest in the whole property and take sole ownership of the commercial condo unit instead, while my co-owner keeps the residential units. Is any of this -- the cost reimbursement, or the final swap of interests -- subject to New York's Real Estate Transfer Tax?
Neither the construction-cost payment nor the final swap of interests triggers RETT. Two tenants-in-common (Owners, holding 12.32%, and Developer, holding 87.68%) of a Manhattan property agreed that D…
Is a license to web-hosted prewritten software taxable in NY, and what happens to bundled training and support charges?
Yes -- a license to use web-hosted prewritten software is a taxable sale of tangible personal property, sourced to where the customer uses it, even though nothing is downloaded. Bundled, nontaxable se…
Do New York State or New York City sales taxes apply to a kinesiology practitioner's wellness-counseling services in NYC?
No -- neither New York State nor New York City sales tax applies, as long as the services aren't provided in a weight-control or health salon, gym, sauna, or similar establishment listed in the NYC ta…
My company's only office is in Connecticut, but eight of my twelve employees (including my CEO) are New York residents who don't work from home. Does that make my company liable for New York's MCTMT?
No. The Metropolitan Commuter Transportation Mobility Tax (Tax Law § 801) applies only to employers "engaged in business within" the MCTD, a standard the Department analyzes the same way as the person…
Must an out-of-state internet wine retailer with a NY direct shipper's license collect NY sales tax despite having no physical presence here?
Yes. An out-of-state wine retailer that holds a New York direct shipper's license must collect New York sales tax on its New York sales, even with no employees, agents, property, or place of business …
A not-for-profit local development corporation will be the named mortgagee on our project financing, then immediately assign all its rights to our actual bank lenders. Does mortgage recording tax apply when the LDC records the mortgage, or when it later assigns the mortgage to our lenders?
Both steps are exempt from mortgage recording tax. New York Not-for-Profit Corporation Law section 1411(f) exempts the income and operations of a local development corporation (LDC) organized under th…
My organization is a municipal urban renewal agency. If we make and record a purchase money mortgage to help finance a low-income housing buyer's purchase of our land, do we owe mortgage recording tax on that mortgage?
Yes, exempt. Tax Law § 252 generally bars exemptions from mortgage recording tax based on other statutes, but the courts and the Department recognize that state agencies, instrumentalities, and politi…
If a New Jersey resident enrolled in a long-term disability plan while working in New York, are the disability benefits he now receives New York source income subject to New York State personal income tax?
Yes, the long-term disability benefits are New York source income because Petitioner enrolled in the plan while actively working in New York. Whether they are actually taxed depends on whether they en…
New York Advisory Opinion TSB-A-13(9)C: May the shareholders of an S corporation claim the investment tax credit for a CNC machine used to cut and shape raw stone slabs into countertops?
Yes. Because the CNC machine is principally used (over 50% of its operating time) to convert raw stone slabs into finished countertops by manufacturing or processing, it is qualified property, so the …
Is a bottled puree drink of vegetables, fruits, nuts, and seeds subject to NY sales tax, or is it exempt food?
It's exempt. A thick bottled puree of water, vegetables, nuts, fruits, seeds, and spices is exempt food and beverage under the general food exemption. It isn't one of the taxable carve-outs -- it's no…
Does an electronic-only investing journal qualify for NY's electronic periodical exemption instead of being a taxable information service?
Yes. An electronic-only investing journal qualifies for the electronic periodical exemption, so the publisher need not collect sales tax. It meets the statutory tests: its predominant purpose is prese…
Is a license to access hosted law-office practice-management software subject to NY sales tax, and how is it sourced?
Yes. A monthly license to access the developer's hosted practice-management software is a taxable sale of prewritten computer software -- taxable even though nothing is downloaded or copied to the cus…
Is a used-car dealer's standalone 'Transfer Fee' to ship a vehicle to another location for inspection subject to NY sales tax?
No. A standalone fee to transport a used vehicle to a more convenient location so the customer can inspect and test-drive it isn't taxable. Transporting property, by itself, isn't a taxable service, a…
Is an online assessment software tool taxable, and are the custom reports it generates from a customer's own data taxable?
Two different answers. Licensing the online assessment tool to third-party consultants is a taxable sale of prewritten computer software (sourced to where it's accessed), and the developer's own use o…
New York Advisory Opinion TSB-A-13(10)C: For the brownfield redevelopment tax credit, can a buyer claim the site-preparation credit after five years, and how is the tangible-property credit allocated for property partly on and off a qualified site?
No site-preparation credit is allowed because more than five years passed since the certificate of completion; the tangible-property credit runs up to ten years after the COC year, and property partly…
When is solar energy equipment considered 'placed in service' for New York's residential solar energy credit if the equipment is installed while a new home is still under construction?
The equipment is treated as placed in service when its installation in the new home is complete and the home is ready for occupancy as the taxpayer's principal residence - not simply when the panels a…
Can a tax-exempt PTA sell school supplies to students without collecting NY sales tax, and under what conditions?
Mostly no -- but there's a narrow exception. An exempt organization's exemption doesn't cover retail sales it makes from a 'shop or store,' meaning sales of goods from display with regularity, frequen…
Is a travel-club membership fee taxable in NY when it only covers out-of-state hotel stays and a cruise, and does the customer's NY residency matter?
No. The membership fee isn't subject to New York sales tax, and the customer's New York residency doesn't matter. New York's hotel-occupancy tax applies only to stays that occur in New York, and none …
Is a credit rating service subject to NY State sales tax or NYC sales tax, and where is it sourced?
It's not a State-taxable information service, but it is taxable under New York City's credit-rating-services tax. Because the firm rates the client's own financial products rather than furnishing info…
Are synthetic bone-graft drug-device products exempt in NY as prosthetic aids or as products for the preservation of health?
They're exempt -- but as preservation-of-health products, not prosthetic aids. Two synthetic bone-graft products that promote bone regeneration after surgery don't qualify as prosthetic aids because t…
Are incidental repairs during a capital improvement taxable, and does a good-faith capital improvement certificate protect the contractor?
It depends on whether the repair is integral to the capital improvement. Repairs that are part of the improvement -- fixing masonry so a new facade attaches, prepping a subfloor for new flooring, or r…
Is a service that processes and submits a medical provider's own Medicare quality-reporting data to CMS a taxable NY information service?
No. Validating, analyzing, and submitting a provider's own Medicare quality-reporting data to CMS is an information service, but it's excluded from sales tax because it's personal or individual in nat…
When does a NYC livery company collect sales tax -- on its own affiliated-livery trips or when it refers a job to a black car?
A livery base doesn't collect sales tax on trips its own affiliated livery vehicles provide in New York City -- those are excluded from taxable transportation service, even if the base was formerly a …
New York Advisory Opinion TSB-A-13(8)C: Must a taxpayer forfeit Empire Zone tax credits it already earned and is carrying forward if it enters the Excelsior Jobs Program?
No. The taxpayer may continue to carry forward and claim the Empire Zone tax credits it earned before entering the Excelsior Jobs Program, because the program's disqualification rule only prevents rec…
I'm the sponsor of a luxury Manhattan condo-hotel, where buyers own their units in fee simple but are legally restricted (by NYC zoning and a Restrictive Declaration) to using them as transient hotel rooms for no more than 120 days a year, with the hotel operator controlling access, furnishing, and rental the rest of the time. When I sell a unit for $1 million or more, does New York's additional 'Mansion Tax' apply, the way it would to an ordinary condo?
No, the Mansion Tax does not apply to these units. New York's additional 'Mansion Tax' (Tax Law §1402-a) applies on top of the basic Real Estate Transfer Tax when a conveyance of 'residential real pro…
Is selling customers online access to fill-in forms templates on my web site -- with no software copy delivered -- subject to NY sales tax?
Yes. Charging customers to access forms templates on your server, fill them in with their own data, and download the populated forms is a sale of prewritten computer software, which NY treats as taxab…
Are a mobile medical company's charges for imaging/treatment equipment it brings to a facility and operates a tax-exempt medical service, or a taxable equipment rental?
The equipment charges are taxable. Although the company delivers, sets up, operates, and maintains its own equipment, the attending physician at the customer's site directs the company's technician on…
We took out one mortgage covering both our existing condo and an adjacent unit we bought to combine into a single home. Does the NYC mortgage recording tax apply at the higher commercial-property rate because the mortgage covers two separate condo units?
The lower residential rate applies, not the higher commercial rate. New York City's mortgage recording tax (Tax Law § 253-a; NYC Admin. Code § 11-2601.d) taxes mortgages on "individual residential con…
Is an equipment agreement that requires the customer to buy the property for $1 at the end a lease (tax each month) or a conditional sale (tax all up front)?
It is a conditional sale, not a lease. Because the customer takes possession at the start, must make payments over 36 months, and is then REQUIRED (not merely given an option) to purchase the equipmen…
I bought a foreclosed, partially-completed condo project and recorded a new declaration and new construction financing. When I sell the unsold units, do I get the mortgage recording tax credit under RPL 339-ee even though the ORIGINAL sponsor's declaration was recorded more than two years before my purchase money mortgages are recorded?
Yes, the credit is allowed. Real Property Law § 339-ee lets a condominium developer credit mortgage recording tax already paid on a construction or blanket mortgage against the tax otherwise due on pu…
Is renting sophisticated temporary event structures taxable, and can the company accept a resale certificate from an event planner?
Yes, the charges are a taxable rental of tangible personal property -- the customer gets possession because the host controls the event, can direct (within limits) where the structure goes, and bears …
Does a company have to collect NY sales tax on the electricity it sells at an electric vehicle charging station?
Yes. The per-kilowatt-hour charge -- and any fee -- a company charges customers for electricity delivered to their electric vehicles at a charging station is subject to NY sales tax under Tax Law 1105…
Must a general contractor pay sales tax on required security/guard monitoring services it buys as part of a capital improvement construction project?
Yes. A general contractor must pay sales tax on protective and detective services -- here, mandated security/building-engineer monitoring of high-risk overnight work -- that it purchases for a capital…
Are printed signs and displays a franchise advertising fund provides to its member restaurants exempt promotional materials under Tax Law 1115(n)(4)?
No. Although the signs and displays are 'promotional materials' as defined in the Tax Law, they do not qualify for the 1115(n)(4) exemption because they fail its conditions: (1) the materials go to th…
If a concessioner collects and remits sales tax on a food vendor's behalf at a stadium, is the food vendor still liable, and can it buy prepared food for resale?
Yes, the vendor remains liable. A person required to collect tax cannot assign that duty to another. By agreeing to let the concessioner collect and remit tax on its behalf, the petitioner and the con…
Can a commercial dog breeder buy dog food tax-free for its breeding dogs and puppies as a production or farming input?
No. Dog food a commercial breeder feeds its breeding dogs and their puppies (later sold at retail and wholesale) is subject to sales tax. The production exemption in Tax Law 1105-B covers only supplie…
Do installment payments from a nonqualified supplemental retirement plan, received after age 59 1/2 and after retiring, qualify as 'pensions and annuities' for New York's $20,000 income subtraction?
Yes. Because the installments were paid after the petitioner separated from employment and after he turned 59½, and were attributable to personal services he performed for his former employer before r…
New York Advisory Opinion TSB-A-13(7)C / (6)I: Do payments by members who fund a QETC's research and development qualify for the qualified emerging technology company capital tax credit?
No. The members who funded the company's research and development cannot claim the QETC capital tax credit, because they were owners of the company from inception, holding more than a 10% interest, an…
Are monthly fees for litigation-support and e-discovery hosting of a client's own documents subject to NY sales tax?
No. A provider that collects, processes, organizes, and hosts a client's own documents on a web platform -- letting the client retrieve, view, tag, redact, highlight, and annotate them -- is providing…
Is a single-price, integrated portfolio and risk-management support service for investment managers subject to NY sales tax?
No, the integrated service itself is not taxable. Even though several components viewed alone would be taxable (intrastate telecom, the prewritten-software web interface, and risk-analysis/calculator …
Which solar-farm equipment, installation, and warranties are exempt from NY sales tax when the facility generates electricity for sale?
Equipment used directly and predominantly to generate electricity for sale is exempt under Tax Law 1115(a)(12)/1105-B, and the production process ends at the inverter. Exempt: solar panels, racks, com…
New York Advisory Opinion TSB-A-13(6)C: Was an out-of-state remote seller whose employees made limited-purpose trips to New York (inspirational shopping, trade shows, vendor meetings) doing business and subject to Article 9-A franchise tax?
No. On the stated facts, the out-of-state catalog and Internet seller was not doing business in New York, because its employees' limited-purpose trips for 'inspirational shopping,' attending trade sho…
Does a scaffolding company charge sales tax on a lump-sum to install, rent, and dismantle temporary pedestrian walkways used with a capital improvement?
It depends on whether the walkway is a 'temporary facility' at a construction site that is a necessary prerequisite to constructing a capital improvement to real property. If it is, the lump-sum charg…
If someone finances another business's purchases with his credit card, is he a person required to collect NY sales tax on those purchases?
No. A person who merely finances another business's purchases -- by letting it use his credit card, with the business signing a promissory note to repay him with interest -- is acting as a lender, not…
My nonprofit runs a licensed special-education school as one part of a larger chapter that also does other developmental-disability work. Is the whole chapter exempt from MCTMT, or just the school employees?
Only partially exempt -- the exemption applies per-employee, not per-entity. Effective for calendar quarters beginning April 1, 2012, Tax Law § 800(b)(4) exempts "eligible educational institutions" fr…
For New York's '548-day rule,' do the days a taxpayer's minor child spends in New York at a legally separated spouse's home count against the taxpayer, and what about scheduled visitation days?
No - once the taxpayer is legally separated under a written agreement giving the spouse physical custody, the child's ordinary time at the spouse's New York residence does not count toward the 548-day…
Is a lump-sum settlement of SERP and deferred compensation plan benefits that a nonresident received after his former employer's bankruptcy exempt from New York income tax?
Yes. Federal law bars states from taxing a nonresident's retirement income, and a settlement payment takes on the same tax character as the payments it replaces, so the Department ruled that JPMorgan …
New York Advisory Opinion TSB-A-13(5)C / (4)I: How is a 'qualifying census tract' for the historic rehabilitation credit determined when the 2010 census lacks median-family-income data?
A qualifying census tract for the historic rehabilitation credit is determined using a combination of the 2000 federal census and the most recent American Community Survey, because the 2010 census lac…
New York Advisory Opinion TSB-A-13(4)C: Is an out-of-state company whose New York independent contractors hold consigned inventory and make sales and deliveries subject to franchise tax, or is it protected by the fulfillment-services exclusion or Public Law 86-272?
Yes. The out-of-state company is subject to franchise tax, because consigned inventory it still owns in New York gives it nexus, and neither the fulfillment-services exclusion nor Public Law 86-272 pr…
Are membership dues for a business-networking / referral association subject to NY sales tax as social or athletic club dues?
No. NY taxes dues only for a social or athletic club (Tax Law 1105(f)(2)). This association is a 'club' (its members control admission and activities), but it is not an athletic club (it has no sports…
New York Advisory Opinion TSB-A-13(3)C: Does a U.S. bank holding company stay taxed under Article 9-A (rather than Article 32) after a reorganization and the sale of its banking subsidiary, under the Gramm-Leach-Bliley transition rules?
Yes. Holdco continues to be taxed under Article 9-A. A bank holding company that first registered and elected financial-holding-company status after January 1, 2000 cannot be forced into Article 32 co…
When does a professional trapeze artist have to collect NY sales tax -- on performance fees, instruction, or admissions?
Only when she performs directly for the public and charges an admission. Being hired for a fee -- to instruct aerial skills, to perform at events booked by event planners or private hosts, or as a sub…
Will selling a minority (up to 49%) ownership stake in a Qualified Empire Zone Enterprise LLC to an outside investor cause it to lose its QEZE tax credits?
No. New York concluded that transferring no more than a 49% ownership interest in Petitioner to an unrelated third party will not cause a loss of Qualified Empire Zone Enterprise (QEZE) tax benefits, …
We're a free association library, a 501(c)(3) nonprofit chartered by the state, exempt from real property tax and sales tax, and primarily funded by our school district's tax levy. We took out a construction loan to renovate our historic building. Does our public-service mission and public funding make our mortgage exempt from mortgage recording tax too?
No, mortgage recording tax IS due. The petitioner is a free association library chartered and registered by the state Education Department since 1957, founded by a 1912 deed of trust, serving all resi…
Is an employee wellness program -- web portal, health education, biometric assessments, and advice -- subject to NY sales tax?
No. A company that sells employers a wellness program for their employees -- combining an online portal with health/nutrition/exercise education and tracking, annual biometric health assessments, and …
Is an irrevocable equipment lease ending in a $1 buyout a true lease or an outright sale for NY sales tax?
It is an outright sale. Under either of the lessor's termination provisions -- the lessee may buy the equipment for $1 or return it, OR the lessee must buy it for $1 -- the standard lease is a securit…
Are a contractor's charges to update a kitchen (new cabinet doors, countertop, sink, molding) a tax-exempt capital improvement?
Yes, when sold as a complete package. A kitchen-update package -- new cabinet doors and drawer fronts, new hardware, new countertop, new sink and faucet, new molding, and painting the cabinet surfaces…
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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.