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 car rental company owe sales tax on the repair and maintenance services it buys for the vehicles in its rental fleet?
No. Because the vehicles are held exclusively for rental — and a rental is itself a 'sale' under New York law — the fleet is property held for sale in the regular course of business. Repairs, maintena…
When a data-destruction company takes customers' old computers as trade-ins or on consignment, does the trade-in credit or resale exclusion reduce the sales tax on its service?
Only sometimes. Data destruction is a taxable service. If the company takes a customer's equipment in part payment and intends to resell it exactly as received, the trade-in credit reduces the taxable…
Does New York sales tax apply to a teleprompter company's operated teleprompting service versus renting the equipment alone?
It depends on who controls the equipment. When the company supplies a teleprompter system plus its own technician who keeps control, it is selling a non-taxable service, so no sales tax applies. But w…
New York Advisory Opinion TSB-A-17(1)C / (18)S: How do sales tax and the section 186-e excise tax apply to an MVNO's prepaid mobile sales through retailers, refills, and wholesale to another MVNO, and how are they sourced?
An MVNO's own-brand prepaid sales through retailers qualify for the sales-tax resale exclusion but are taxable to the MVNO for the section 186-e excise tax; refills are taxable for both; wholesale to …
Is equipment a repair shop buys to perform taxable repairs itself subject to sales tax?
Yes. A car dealer's purchase of a wheel-alignment machine is a taxable retail sale of tangible personal property. The machine is used to perform the dealer's repair and alignment work, which is a taxa…
Can a cost-reimbursement Army facilities contractor buy property tax-free as purchases for resale?
No. The contractor has a cost-plus contract to operate, maintain, and repair facilities at a New York Army post, buying property in its own name (with title passing to the Army on delivery) and gettin…
For a uniform/linen rental-and-laundry business, which items can be bought for resale, and are monogramming and lost-item fees taxable?
The company is a laundry service, so the items it launders can't be bought for resale, but the non-laundered storage items can. Renting uniforms, gowns, and linens that the company launders, maintains…
For a company that readies foreclosed properties for sale, which of its services and reimbursements are subject to NY sales tax, and what does it owe on its own purchases?
Appraisals and the management fee aren't taxable, but resold utility, protective, and repair/maintenance services are -- unless the customer is exempt. The company gets bank-owned (REO) properties int…
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…
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…
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…
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…
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…
Are charges to rent reusable shipping pallets, plus related fees, subject to NY sales tax?
Yes, the pallet rentals are taxable and so are most of the add-on fees. A lease of tangible personal property is a taxable sale (Tax Law 1101(b)(5)), and renting reusable pallets to manufacturers does…
Is buying and leasing an aircraft interest through a fractional-style program a taxable property purchase or a nontaxable transportation service?
It's a taxable purchase of tangible personal property, not a nontaxable transportation service. Whether a program like this is taxable property or an exempt transportation service turns on whether dom…
Are receipts from printing and mailing patient billing statements subject to NY sales tax?
Yes, the printed statements and envelopes are taxable -- but with carve-outs. Producing patient bills from a customer's electronic file and supplying the envelopes is a sale of printed material, which…
New York Advisory Opinion TSB-A-10(11)C / 10(41)S: Are video switching services taxable telecommunication services, can the inputs be bought for resale, and is a rented control panel taxable equipment a broadcaster can buy exempt?
Yes. A video switching service is a telecommunication service subject to State and local sales tax and the section 186-e excise tax; the provider may buy the transmission services and equipment it res…
Can a car dealer buy oil and filters tax-free for 'free' oil changes promised to vehicle buyers?
Yes -- if the deal documents say the oil changes are included in the price. When the dealer's sales invoice (or the sale/lease contract or another writing given at the time of sale) states that oil ch…
Does a contractor running a village's waste facilities owe sales tax on the waste-disposal services it buys?
Yes. The contractor's purchases of waste-disposal (hauling) services are taxable. It isn't buying as the village's purchasing agent: it contracts and is invoiced in its own name, never identifies itse…
Can a cleaning/restoration firm buy dehumidifiers and air movers tax-free for resale when it rents them to clients?
Only if it meets four conditions. The firm cleans fire/smoke/flood-damaged buildings and offers clients optional dehumidifiers and air movers as a separate, value-added rental. Because it doesn't perm…
If my cleaning company buys garbage bags and trash liners to remove trash from a customer's building, do I owe sales tax on those bags, even if I bill the customer separately for them?
Yes, for bags the cleaning company uses itself. Garbage bags and liners a cleaning company consumes while removing trash from a customer's building are taxable purchases for the cleaning company, even…
If I rent reusable shipping containers to farmers who return them after use, do I have to charge sales tax on the rental, the delivery charges, and the deposit?
Yes. Because the farmers were required to return the containers instead of keeping them, the rental didn't qualify for New York's packaging-materials exemption, so the rental fee, pallet and delivery …
If I sell a product from a New York terminal to out-of-state customers who arrange their own pickup, do I have to charge New York sales tax, and does it matter whether a common carrier or the customer's own truck picks it up?
It depends on who takes physical delivery in New York. Sales are taxable when the customer (or the customer's own hired carrier) picks up the asphalt in New York, even if it's headed out of state — bu…
I manufacture goods and sell them for resale to retailers under resale certificates, but sometimes the retailer's own customer pays part of the price directly to me instead of to the retailer — does that direct payment turn into a taxable sale by me?
No new sale. A window-treatment manufacturer that sells to retailers for resale (properly documented with resale certificates) does not make a new taxable sale, and owes no sales tax, when a retailer'…
My company runs a warehouse that repackages inventory before shipping it to my own retail stores — are the boxes, tape, and wrap I buy for that internal shipping exempt from sales tax as packaging materials?
No exemption. A pet-supply retail chain must pay New York sales or use tax on the boxes, tape, wrap, and other packaging materials it buys and uses to ship inventory from its own warehouse to its own …
I run a portable-toilet rental and servicing business — do I owe sales tax on the toilets and supplies I buy to run it, or on the insurance I charge customers for the toilets?
Split result. A portable-toilet servicing company owes New York sales and use tax on its purchases of the toilets themselves (and the parts/paint used to build and maintain them), because providing to…
Are a billboard-advertising company's charges to clients, its poster-printing costs, its installer's charges, and its billboard-space fee subject to New York sales tax?
The company's fee to its clients for arranging billboard advertising is exempt as an advertising service, but the company itself owes tax on its own poster-printing purchases and its installer's and b…
Are a freelance fashion stylist's services and the clothing/props they provide for photo shoots subject to New York sales tax?
A fashion stylist's coordinating and styling services aren't taxable, but clothing, accessories, and props that are actually transferred (sold) to the client are taxable tangible personal property, an…
Can a central-station alarm company buy the burglar and fire alarm equipment it installs at customer sites exempt from sales tax as a purchase for resale?
Only if the alarm equipment remains fully functional on its own (usable as a stand-alone local alarm or with another provider's monitoring) and Petitioner genuinely rents it to the customer at a reaso…
Can a trash-hauling company buy its trash containers tax-exempt as purchases for resale when it separately bills customers for container rental and trash removal?
Only if the container rental is a genuinely separate transaction from the trash removal service -- meaning customers can rent a container without buying removal service and vice versa, the price is re…
Does a car dealer owe sales or use tax on loaner vehicles it provides free to customers under an extended warranty's rental-car benefit?
No -- because the dealer's rental-fleet vehicles are used exclusively for rental purposes, the dealer can buy them tax-free for resale in the first place, the manufacturer's reimbursement to the deale…
Is a sign painter's charge for painting temporary advertising on car dealers' windshields and building windows subject to New York sales tax?
No -- painting advertising copy on the windshields of cars a dealer holds for sale is a nontaxable 'printing/imprinting' service because the dealer isn't buying the cars for its own use (they're held …
Can a car dealership get a refund of the sales tax it paid on gasoline used to fill a new vehicle's tank before delivery to the customer?
Only if the dealer can show it's contractually or documentarily committed to providing a full tank as part of the sale — a manufacturer's window sticker listing a full tank in the MSRP, or the dealer'…
Does an out-of-state bathrobe and towel manufacturer have to register as a New York sales tax vendor and collect tax on all its New York sales — including Internet sales — just because one independent commission-only salesman shows its children's clothing line to a few New York retail stores?
Yes. Having even a single independent salesman solicit business in New York on the manufacturer's behalf — even one who's paid only a modest commission and performs no other functions — is enough cont…
Can a rock-salt spreading company get a refund of the sales tax it paid when it bought the rock salt, on the theory that the salt is resold to (or becomes part of) its customers' driveways and walkways, when the company sells salt-spreading as a standalone service separate from snow plowing?
No refund. Even though the company sells salt-spreading separately from snow plowing, and applies the salt mainly to increase traction rather than to melt existing ice, the rock salt is still a supply…
Does a trade show and special events decorating contractor owe New York sales tax on its design, set-building, staging, and decorating services, and on the props/materials it provides — and does it owe New York City's separate local tax on top of the state tax?
Yes, both the contractor's services and the tangible items it provides are subject to New York State and local sales tax when delivered in New York. Its design, set-building, staging, lighting, and de…
When a school fundraising company gives student sellers 'prizes' as an incentive for higher sales volume — and in exchange the school keeps a smaller percentage of sales proceeds than it otherwise would — does the company owe sales tax on its own purchase of those prizes?
No. Because the school or school group effectively pays for the prizes by accepting a lower percentage of sales proceeds than it would keep without the incentive program, the reduced-proceeds amount i…
Can a veterinary-drug distributor sell drugs and medicine to New York veterinarians tax-free as a 'sale for resale,' when those veterinarians in turn resell the products directly to farmers under a drop-ship program?
No. Even though the veterinarians are reselling the drugs directly to farmers (through the distributor's 'Pharm Link' drop-ship program), New York has a special rule specifically for veterinarians: an…
Does New York's manufacturing exemption cover a U.S. producer's equipment, tools, and studio-rental purchases used to create English-language 'master recordings' of foreign films, TV series, and music CDs that are then licensed to U.S. distributors?
Yes, largely exempt. Creating a marketable US master recording from a foreign film, TV series, or music master — through translation, dubbing, voice/sound mixing, and editing — counts as a manufacturi…
If a telephone answering service passes through the cost of its dedicated phone lines to customers as part of its bill, does New York sales tax apply to that charge too, on top of the tax already paid when the service bought the lines?
Yes. New York taxed the answering service's purchase of its dedicated phone lines as a taxable expense it consumes in its own business, and separately taxed the full charge it bills customers (includi…
If a delicatessen sells frozen pizzas and made-to-order sandwiches wholesale to bars for resale to their patrons, does it have to charge sales tax on those wholesale sales?
It depends on the item. The delicatessen's uncooked frozen personal-size pizzas are exempt because they're commonly sold unheated, in the same form, by ordinary food stores. But its cold-cut, eggplant…
Does a personal chef who cooks and freezes meals in a client's home owe New York sales tax, and does the answer change depending on who buys the groceries, or whether the chef splits grocery-buying and cooking into two separate companies?
It depends on who sells the food. If the client already owns the groceries and only pays the chef to cook and package them, the chef's charge is a nontaxable cooking service (though the chef must stil…
Does an out-of-state manufacturer that sells to New York customers, using only an independent sales representative who visits every few months, have to register as a New York sales tax vendor?
Yes. Even a single independent manufacturer's representative who periodically visits New York customers on the manufacturer's behalf creates enough nexus to require the out-of-state manufacturer to re…
Are materials and supplies a federal government contractor purchases in its own name, for use in performing a cost-reimbursement services contract, excluded from sales tax as purchases for resale even though the government takes title to them?
No, they're not resale-exempt. Even though the U.S. government eventually takes title to the materials and reimburses the contractor for their cost, the contractor is buying them to use in performing …
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 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…
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…
Are a disaster-recovery service's monthly subscription fees and usage fees subject to New York sales tax?
It's split -- Petitioner's monthly subscription fee, which merely grants customers a contingent right to access backup computer equipment if a disaster ever strikes, is a nontaxable sale of an intangi…
Are a pharmacy's printers, toner, and paper used to produce prescription labels and medical information pamphlets exempt from sales tax?
Yes -- because Petitioner's prescription drug labels and accompanying medical information pamphlets are critical elements of the medication product it sells (not just packaging overhead), the toner an…
Are a patent draftsman's formal drawings sold to patent attorneys subject to New York sales tax?
Yes -- Peter Cotsis's formal patent drawings, sold to patent attorneys for submission with patent applications, are tangible personal property subject to sales tax, because his drafting service isn't …
When a hotel leases both the building and its furniture from its landlord, is the portion of the rent allocated to the furniture subject to New York sales tax?
Yes -- when a hotel leases a building together with beds, dressers, tables, and chairs, the portion of the lease payments reasonably allocable to that furniture is subject to New York sales and use ta…
Can a waste-transfer-station operator buy a competitor's trash-hauling service tax-free for resale when that competitor also uses the same transfer station for its own customers' trash?
No -- the charge Paper Fibres pays Browning Ferris Industries (B.F.I.) to haul all the consolidated waste from Paper Fibres' own transfer station to a Pennsylvania landfill is a separate taxable trash…
New York Advisory Opinion TSB-A-96(25)S: A driving school that switches from renting road-test cars to buying its own vehicles asks whether it now owes sales tax on those purchases (and on repair parts), and whether it can get a credit for the 25% of its student fee that's allocated to "providing the car."
Yes, both are taxable, and no, there's no credit. Model Auto Driving School, Inc. charges students a fee split 75%/25% between driving instruction and providing a car for the practical road test -- th…
New York Advisory Opinion TSB-A-95(39)S: Is a food service contractor's charges to a substance-abuse treatment facility -- for meals, on-site labor, supplies, nutritional analysis, and management services -- exempt as a sale for resale, or at least partly exempt as a professional fee?
No exemption either way -- the entire charge is taxable as a sale of food and drink, with no carve-out for the labor/management/nutritional-analysis portion. Ambassador Food Services Corporation suppl…
Does an out-of-state supplier owe New York sales tax on materials it sells to New York dental laboratories that use them to make dentures and crowns?
It depends on what the material becomes. Items that end up as a physical part of the finished denture or crown (teeth, porcelain, certain acrylics, certain metals) can be sold tax-free as a resale, as…
When a cigarette manufacturer packages a free promotional item -- like a lighter or playing cards -- together with a pack of cigarettes as a marketing premium, is buying that item a tax-free purchase for resale?
No. Promotional items given away for free with a product (rather than genuinely sold to the end customer) don't qualify for the resale exclusion -- the manufacturer's purchase of the premiums is a tax…
Can a brewery buy kegs and pallets tax-free for resale, even when customers outside its normal delivery territory keep them instead of returning them because return shipping costs too much?
Yes. As long as the kegs and pallets are actually transferred to the customer to keep or dispose of as they wish -- with the deposit price raised to reflect their real cost -- they qualify as exempt p…
When a cellular phone retailer sells or gives away phones at a reduced price (or free) bundled with a carrier service contract, is its original purchase of those phones still tax-exempt as a purchase for resale -- and what about the retailer's commissions, installation fees, and activation fees?
The retailer's phone purchases stay exempt as purchases for resale even when bundled free or discounted with a service contract; its carrier commissions aren't taxed either, but it must collect sales …
Can a social and athletic club buy lockers tax-free as a purchase for resale, since it charges members a fee to use them?
No. Locker-use fees are taxed as club dues (not as a rental or storage charge), and since the club-dues tax has no resale exception, the club must pay sales tax on the lockers it buys, regardless of b…
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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.