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 a commercial landlord's charges to a tenant for 'condenser water' used to cool the tenant's leased space subject to NY sales tax?
No. The condenser water is chilled water the landlord pipes to the tenant's own air-conditioning system to cool the space the tenant leases. Because the water is delivered through pipes, the sale of t…
When a hotel's in-house AV provider contracts directly with guests, is the hotel purchasing those AV services -- and is it liable for the sales tax?
No to purchasing, but yes to liability when the hotel collects the money. Each hotel lets an in-house AV provider rent audiovisual equipment and related services directly to the hotel's guests, who si…
If I'm a Florida domiciliary and I buy a studio apartment in New York City that I'll only use occasionally, will that make me a New York State or City resident who owes New York income tax?
No, not from ownership alone. If Petitioner remains a Florida domiciliary, merely owning a New York City studio apartment does not by itself make him a New York State or City resident. But if the apar…
How does NY sales tax apply to a security company's monitoring services, alarm/CCTV equipment, installation, repairs, and its own purchases?
It depends on the service. Monitoring (and other alarm/protective) services are always taxable as 'protective and detective services' under Tax Law 1105(c)(8). For equipment and its installation: if t…
Are the FCC-mandated 'shared costs' a number-portability administrator allocates to telephone carriers subject to NY sales tax?
No. The petitioner runs the regional databases that let phone customers keep their number when they switch carriers, and federal rules make the carriers share the cost of that system. Although it conv…
Do Metro-North Commuter Railroad maintenance-of-equipment workers who sometimes work in both New York and Connecticut owe income tax only to their home state, or to every state where they perform services?
They must pay income tax to every state where they perform services, plus their resident state. The federal railroad tax exemption in 49 U.S.C. § 11502(a) (added by the Amtrak Reauthorization and Impr…
Are niche walls, wall fittings, and paneling installed during a retail store's initial build-out taxable fixtures or nontaxable capital improvements?
They're capital improvements, so they aren't taxable as tangible personal property. The floor-to-ceiling display niche walls, wall fittings, and paneling were installed during the store's initial buil…
Can a nonresident partner claim an additional passive activity loss to offset New York's required bonus-depreciation add-back, even though the partnership had a larger overall economic loss?
No. The Tax Law contains no provision letting a nonresident partner claim an extra passive activity loss equal to the New York adjustments. Because the required bonus-depreciation add-back under Tax L…
When a NY vendor ships taxable goods by common carrier, is sales tax based on the rate where the vendor is located or where the buyer takes delivery?
The rate is the combined state and local rate in effect where the buyer takes delivery. New York sales tax is a 'destination tax': under Tax Law 1213 the vendor collects the city, county, and school-d…
We're building a new electric transmission line partly financed and secured by mortgages to the New York Power Authority (NYPA), a state agency. Is recording those mortgages subject to New York mortgage recording tax?
No MRT is due. A private developer built a 660-megawatt electric transmission system running from New Jersey into New York City, financed partly through the New York Power Authority (NYPA) under a 20-…
Does a summer home in a cooperative community that restricts occupancy to a 5-month season and has no working heating system count as a 'permanent place of abode' for New York statutory residency purposes?
No. Because the cooperative's rules limited use of the home to summer occupancy (May 1 through September 30) and Petitioner had the heating system permanently removed around October 5, 2010, the home …
Are receipts from a patent draftsman's formal drawings, delivered solely electronically as PDFs, subject to NY sales tax?
No. The draftsman creates formal patent drawings and delivers them solely electronically, as PDF files emailed to patent-attorney customers, with no paper copy. Sales tax applies to sales of tangible …
Are irrevocable trusts created by New York grantors exempt from filing New York State income tax returns once all their trustees live outside New York?
The Trusts stopped owing New York income tax on their New York-resident portions once the New York co-trustee resigned, leaving a Connecticut resident as sole trustee, satisfying all three conditions …
My temporary-staffing employees work back-to-back assignments in different states -- some inside New York's Metropolitan Commuter Transportation District, some outside. How do I figure out which of their wages count toward my MCTMT payroll expense?
Each distinct, consecutive assignment is tested separately using the four-part "covered employee" allocation test, applied in strict order: localization (are the services performed entirely, or almost…
Are a security firm's guard services, provided to a contractor working on a NYC government construction project, subject to NY sales tax?
Yes. Guard, patrol, and watchman services are taxable 'protective and detective services' under Tax Law 1105(c)(8). The security firm provides guard services as a subcontractor to a construction compa…
New York Advisory Opinion TSB-A-11(8)C: How does an internet-based futures and OTC exchange operator source its access, trade-execution, and market-data fees for the Article 9-A receipts factor?
Source them to the customer. The fees an internet-based futures and OTC market operator earns for exchange access, trade execution, and market data are other business receipts, sourced to the location…
Are sales of e-books delivered electronically over the Internet subject to NY sales and use tax?
No. The company sells electronic books through an online bookstore, delivered over the Internet and stored on the customer's own device. E-books aren't tangible personal property -- they have no physi…
Are a retailer's sales of municipally-mandated garbage bags and town-endorsed leaf bags subject to NY sales tax?
It depends on the bag. The town-mandated household garbage bags are exempt; the optional leaf bags are taxable. The mandated bags are embossed with the town's name and logo, must be bought and used to…
Is a hosted email-marketing service performed through the provider's software taxable, and are its training and consulting charges taxable?
The hosted service is taxable as prewritten software, but the optional training and consulting charges are not. Clients log into the provider's 'Hosted Offering' to build, target, and send email/messa…
Does a story-driven live show qualify as a 'live dramatic or musical arts performance' under Tax Law 1115(x), making production-property purchases potentially exempt?
The show qualifies as that kind of performance, but the Department did not decide whether the specific property purchases are exempt. Tax Law 1115(x) can exempt tangible personal property used directl…
Does federal law (the FAAAA) preempt NY sales tax on interstate movers' storage-in-transit lasting more than 30 days?
No. New York taxes the service of storing property (Tax Law 1105(c)(4)), and the Department's long-standing policy is that an interstate mover's 'storage-in-transit' is taxable for the whole period if…
For the 548-day rule that lets a New York domiciliary working abroad avoid New York resident status, do partial days spent in a foreign country count toward the 450-day requirement, or only full days?
Both full and part days spent in a foreign country count toward the 450-day threshold under the 548-day rule of Tax Law § 605(b)(1)(A)(ii). The Department applies the same counting method used for New…
Are personalized postage stamps and a separate 'stitch file' charge for embroidery subject to NY sales tax?
Personalized stamps bought for mailing aren't taxable; the stitch-file charge depends on how it's billed. Postage stamps are treated as tangible personal property only when bought for a purpose other …
Is a subscription for digital-certificate authentication and resolution services (secure-website certificates) subject to NY sales tax?
No. The company verifies a website operator's identity and issues a 'digital certificate' (an SSL-type certificate) so visitors' browsers can confirm the site is genuine and open an encrypted connecti…
Does a Qualified Empire Zone Enterprise's aircraft qualify for the QEZE sales-tax exemption when it's used to fly to business locations outside the zone?
No. During 2008, Tax Law 1115(z) exempted property bought by a Qualified Empire Zone Enterprise (QEZE) only if it was used 'directly and predominantly' in the Empire Zone where the enterprise is certi…
Are a golf club's member dues, its mandatory 'subvention' fee, and its non-member playing fees subject to NY sales tax?
Member dues and the subvention fee are taxable; non-member playing fees aren't. The club's members must each buy a $1,000 'subvention certificate' that gives them a proportional share of the club's as…
Are a company's customized background and investigative reports taxable as detective services or as information services in NY?
They're taxable -- the only question is under which provision. If preparing a report requires a private-investigator license under General Business Law Article 7, the report is a taxable detective ser…
Does a sculpture bought at a NYC auction qualify for the resale exclusion when the buyer loans it to a museum before reselling it?
No -- the purchase is subject to New York sales tax. First, it's a New York sale: the sculpture was shipped to Florida by a private carrier the museum (acting as the buyer's designee) hired, and New Y…
My organization administers a union health and welfare benefit plan. A prior advisory opinion said the benefits we pay out are wages subject to MCTMT but that we don't have to pay the tax on them -- has that changed?
This MODIFIED opinion replaces TSB-A-10(1)MCTMT (issued July 20, 2010) on the identical petition. It reaffirms that union health and welfare benefits funded through employer contributions negotiated i…
Are sales of title abstracts taxable in NY, at what rate, and what happens when a customer never pays?
Yes -- since September 1, 2010, an abstract of title is a taxable information service under Tax Law 1105(c)(1) (a Department policy change, TSB-M-10(7)S, to match the case law). The vendor must collec…
New York Advisory Opinion TSB-A-11(7)C: From what date does interest run on a corporate franchise tax and MTA surcharge refund based on amended returns?
Interest runs from the date the amended returns and refund claims were filed. Because the company met the section 211.3 reporting requirement (it filed amended New York returns within 90 days of the a…
Is RBOB (reformulated gasoline blendstock for oxygenate blending) a 'motor fuel' subject to NY's excise, petroleum business, and prepaid sales taxes?
Yes. RBOB -- reformulated gasoline blendstock for oxygenate blending -- is a 'motor fuel' for purposes of the Article 12-A excise tax (and petroleum testing fee), the Article 13-A petroleum business t…
Is a law firm's certified abstract of title (or certified continuation) a taxable information service in NY?
No -- it's not taxable. Although the sale of an ordinary abstract of title became a taxable information service on September 1, 2010, a 'guaranteed title search' is treated as an insurance product, no…
Is a certified abstract of title that guarantees the correctness of its search a taxable information service in NY?
No -- it's not taxable. The sale of an ordinary abstract of title became a taxable information service on September 1, 2010, but a 'guaranteed title search' is treated as an insurance product instead.…
New York Advisory Opinion TSB-A-11(6)C: Are receipts from selling a company's entire inventory as part of selling its whole business and ceasing operations included in the Article 9-A receipts factor?
No. Receipts from a one-time sale of the company's entire inventory as part of selling its whole business -- after which it only wound down and distributed to shareholders -- are not business receipts…
New York Advisory Opinion TSB-A-11(4)C: After the Empire Zone program sunset, can a certified business claim EZ credits for operations in a newly acquired building that can no longer be added to its Certificate of Eligibility?
Yes. A business certified before the Empire Zone program sunset stays deemed-certified through its benefit period and may claim EZ credits for qualifying operations in both its existing and a newly ac…
Are lifeguard services and pool maintenance services subject to NY sales tax, including when bundled as a 'total pool service'?
Yes, both are taxable. Lifeguard services are protective services subject to tax under Tax Law 1105(c)(8): a lifeguard's job is to monitor the pool to keep swimmers safe and rescue anyone in trouble, …
New York Advisory Opinion TSB-A-11(5)C: Could a foreign corporation that is a general partner (with an indirect interest in a New York LLC) make the foreign corporate limited-partner separate-accounting election?
No. The foreign corporation could not make the limited-partner separate-accounting election, because it was not subject to New York tax solely as a result of the limited-partner provision (20 NYCRR 1-…
Two separately-owned residential housing cooperative corporations, each owning one tower of a two-tower building complex, want to legally merge under the Business Corporation Law so they can make joint decisions. After the merger, shareholders of the dissolving co-op will get equivalent new shares in the surviving co-op and keep occupying the same apartments under the same proprietary leases. Does this merger, or the resulting stock conveyance to the dissolving co-op's shareholders, trigger New York's Real Estate Transfer Tax?
Yes, RETT applies -- potentially twice, though a credit limits the overlap. Two residential housing cooperative corporations, each owning one of two interdependent apartment towers built on a shared s…
Are quercetin-based dietary-supplement beverages, concentrates, powders, and chews exempt from NY sales tax as dietary foods/health supplements?
Yes, they're exempt. Tax Law 1115(a)(1) exempts food, dietary foods, and health supplements sold for human consumption, and the regulation (528.2(c)) covers products that supplement or substitute for …
New York Advisory Opinion TSB-A-11(3)C: Does a parent corporation succeed to a target's investment tax credit carryover when it acquires the target's stock with a joint IRC section 338(h)(10) election?
Yes. A parent may succeed to the target's investment tax credit carryover where it acquires the target's stock with a joint IRC section 338(h)(10) election: the deemed asset sale and deemed IRC sectio…
If a surviving spouse who is not yet 59 1/2 elects to treat his late wife's IRA as his own, can he still claim New York's $20,000 pension and annuity income subtraction as her beneficiary?
No. Once the surviving spouse elects to roll over and own the IRA as his own account under IRC § 408(d), he stops being a 'beneficiary' of his late wife's IRA, so the regulation that lets a beneficiar…
Can S corporation shareholders increase their stock basis for New York tax purposes to offset the built-in gains tax that gets added back to income under Tax Law section 612(b)(18)?
No. New York's Tax Law has no provision letting shareholders increase their basis in S corporation stock to offset the section 1374 built-in gains tax add-back required by Tax Law § 612(b)(18). Becaus…
New York Advisory Opinion TSB-A-11(2)C: Is an electronic OTC commodities and derivatives market operator a banking corporation under Article 32, and does pass-through income from an affiliated partnership make a corporate partner one?
No. An electronic over-the-counter commodities and derivatives market operator is not a banking corporation under Article 32, because its trading, confirmation, and data fees are not a banking busines…
Can a title insurance company buy a title abstract for resale, and is tax still owed if the closing is later cancelled?
No to both relief points. A title insurance company that buys a title abstract to prepare a title insurance policy cannot give the abstract vendor a resale certificate (ST-120), because the purchase d…
Are a utility's charges for water service and sewer service subject to NY sales tax?
Water service is exempt; sewer service is taxable. Water delivered to customers through pipes or mains is exempt from sales and use tax under Tax Law 1115(a)(2), so the water-works company's charges f…
New York Advisory Opinion TSB-A-11(1)C: How does a prepaid debit card processor source its card-sale fulfillment fees and its transaction fees for the Article 9-A receipts factor?
Source by activity. The fulfillment fees a prepaid debit card processor earns from selling cards are other business receipts (the cards are intangible rights to redeem), sourced to where the card is s…
Does the 2009 law (Part N-1) narrowing NY's aircraft exemptions apply to an aircraft bought out-of-state before the law's effective date but first used in NY afterward?
No. Part N-1 of Chapter 57 of the Laws of 2009, which narrowed both the nonresident use-tax exemption and the commercial-aircraft exemption, applies only to sales made and uses occurring after its Jun…
Are a firm's three financial-pricing 'advice services' taxable information services or nontaxable consulting in NY?
It depends on the service. Advice Service P -- automated derivative-pricing advice generated by applying the firm's proprietary formulas to its common, internally-built database -- is a taxable inform…
Is e-discovery access taxable when the customer logs in and uses the vendor's software to review and organize data?
Partly. When the customer uses the vendor's proprietary online tool to classify, organize, batch, and index its uploaded data -- the Data Capturer, Data Reviewer, and Data Manager access levels -- the…
I'm buying ~66 gas stations, then immediately conveying about 60 of those properties to a financing company and leasing them back on a 15-year triple-net lease with options to eventually buy some properties back at fair market value or a premium over the financing company's cost. Which of these steps -- my initial purchase, my sale to the financing company, and the leaseback itself -- are subject to New York's Real Estate Transfer Tax, and do any exemptions (like the 'mere change of form' or 'securing a debt' exemptions) apply?
Every step is a taxable conveyance, and no exemption applies -- including, notably, the lease itself. The petitioner planned to buy ~66 gas stations (fee and leasehold interests, plus equipment/invent…
Are electronic-discovery litigation support services -- where the vendor processes a client's own documents -- subject to NY sales tax?
No. The vendor collects, processes, searches, and organizes a client's own electronic documents for litigation -- categorizing, de-duplicating, threading emails, and making them searchable -- which ad…
Are antibacterial hand gels, soaps, and sanitizers exempt from NY sales tax as drugs, or taxable as cosmetics/toiletries?
They're taxable. Tax Law 1115(a)(3) exempts drugs and medicines, but it expressly excludes cosmetics and toilet articles 'notwithstanding the presence of medicinal ingredients.' These antibacterial ha…
Are an IT firm's support-service charges taxable when one fee covers both software work and hardware/equipment servicing?
It depends on how the bill is written. Services performed on computer software (maintaining, monitoring, debugging, adjusting settings) are exempt under Tax Law 1115(o), but services to hardware and e…
Are an FBO's charges for aircraft community-hangar space and tie-downs subject to NY sales tax as a storage service?
No. Tax Law 1105(c)(4) taxes the service of storing tangible personal property, but the Department treats hangaring and tie-downs of aircraft as nontaxable when the owner or lessee has regular or imme…
Is a copper-bearing IUD an exempt drug, or medical equipment, for NY sales tax?
It's medical equipment, not a drug. Tax Law 1115(a)(3) exempts drugs and medicines, and also exempts medical equipment -- but medical equipment is exempt only when bought by patients and is taxable wh…
If an association buys information services it both uses itself and resells to its members, how is NY sales tax applied?
Both ways. The geographic, demographic, and mapping data the association buys are taxable information services under Tax Law 1105(c)(1). The association is the end user as to data it uses in its own b…
My business partner and I run a traveling antiques business with no office, storing merchandise at our home in the MCTD and selling at shows across the country. Do we owe MCTMT, and does it cover our out-of-state show income too?
Yes, but only on the portion of earnings allocated to the MCTD. A partnership's individual partners are subject to MCTMT as self-employed individuals if their net earnings from self-employment allocat…
If a personal income tax refund from a net operating loss carryback isn't paid within 45 days of the claim, does interest run from the loss year return's original April 15 due date or from the later, extended filing date?
It runs from April 15. Under Tax Law § 688(d), once a carryback refund isn't paid within 45 days of the claim, interest accrues from the due date of the loss year return determined without regard to e…
New York Advisory Opinion TSB-A-10(12)C: Are a parent's disregarded subsidiaries treated as one taxpayer for the QEZE real property tax credit, and does the group pass the employment test as a new business?
Treated as one taxpayer. A petitioner and its disregarded subsidiary and NewCo are a single Article 9-A taxpayer for the QEZE real property tax credit, with the certification imputed to the group; the…
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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.