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?

Plain-English summary

R. J. Schickler Inc. provides a rock-salt spreading service, applying bulk rock salt to customers' driveways, parking lots, and walkways to increase traction — sold and billed completely separately from snow plowing. The company argued its salt often works more like sand (a physical traction aid) than a chemical ice-melter, sometimes spread even before ice forms, and that the salt "becomes a physical component" of the customer's property or is "resold" to the customer as such. On that theory, it asked for a refund of the sales tax it had already paid on its rock salt purchases, since a purchase genuinely made "for resale" is supposed to be tax-free.

The Department said no refund is available, leaning on an earlier ruling (Ruston Paving Co.) involving rock salt used in snow removal, which held that rock salt doesn't become a permanent "physical component" of the customer's property, nor is it "transferred" to the customer in any meaningful sense — because any salt remaining on the property quickly dissipates and becomes useless, it has no continuing value to the customer the way a building material would. The Department extended that same reasoning here even though this company's salt-spreading is billed separately from snow removal: spreading salt to increase traction is still a form of "maintaining, servicing, or repairing real property" under Tax Law § 1105(c)(5) (the regulations specifically list snow removal as one example, but the list isn't exclusive of other similar ground-maintenance services). Since the rock salt is simply a supply the company consumes while performing that taxable maintenance service — not tangible property genuinely sold or transferred to the customer — it's taxable at the time of purchase, with no refund available, and the company's entire charge to its customers (including any separately stated charge for rock salt or fuel) is itself taxable as a real-property maintenance service.

What this means for you

Snow, ice, and grounds-maintenance service providers

Selling salt-spreading (or any ground-treatment service) separately from snow plowing doesn't change its tax treatment — it's still a real-property maintenance service, and any consumable material you apply (rock salt, sand, ice-melt) is a taxable supply you consume in providing that service, not a resold product, unless it genuinely becomes a permanent physical part of the property or is otherwise actually transferred with lasting value to the customer.

Businesses hoping to claim a "resale" exemption on consumables

The key test isn't how you market or bill the material (traction aid vs. ice-melter, bundled vs. separate) — it's whether the material has continuing value to the customer after use. Something that dissipates and becomes useless (like spread rock salt) generally won't qualify as a resale.

Accountants and tax professionals

This opinion reaffirms and extends the Ruston Paving Co. holding beyond its original snow-removal-bundled context to a standalone salt-spreading service — useful precedent for any client in landscaping, grounds maintenance, or similar real-property services who wants to argue a consumable material is being "resold."

Common questions

Q: Can I get a refund on sales tax paid for supplies I use in a service I provide?
A: Generally no, unless the supply becomes a genuine physical component of the customer's property or is actually transferred to the customer with continuing value — a consumable that dissipates during use (like spread rock salt) doesn't qualify.

Q: Does billing a service separately from another (like salt-spreading vs. snow removal) change its tax treatment?
A: Not by itself — the Department looked past the billing structure to the underlying nature of the service (real-property maintenance) either way.

Q: Is snow/ice treatment the only kind of "real property maintenance" service that's taxable?
A: No — the regulation's list of maintenance examples (painting, lawn services, trash removal, snow removal, etc.) is illustrative, not exhaustive; other similar ground-maintenance activities can be taxable too.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(3) (receipt), § 1101(b)(4)(i) (retail sale)
• Tax Law § 1105(a), § 1105(c)(5) (real property maintenance)
• Tax Law § 1119(c) (refund/credit for property transferred with a taxable service)
• 20 NYCRR § 526.5 (receipt; non-deductible expenses)
• 20 NYCRR § 526.6 (retail sale; resale exclusion)
• 20 NYCRR § 527.7 (real property maintenance definitions and imposition)

Prior rulings referenced:

• Ruston Paving Co., TSB-H-87(222)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2003.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a03_40s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-03(40)S
Sales Tax
November 19, 2003

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S030212A

On February 12, 2003, the Department of Taxation and Finance received a Petition for
Advisory Opinion from R. J. Schickler Inc., P. O. Box 32, 370 Scottsville-Chili Road, Scottsville,
New York, 14546.
The issue raised by Petitioner, R. J. Schickler Inc., is whether it is entitled to a refund of sales
or use tax paid on its purchase of rock salt used as described below.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner provides rock salt spreading service to its customers. Petitioner purchases rock
salt in bulk form and spreads the salt on its customers’ walkways and driving surfaces. Petitioner
has paid sales or use tax on its purchases of rock salt. The rock salt is meant to increase the
coefficient of friction of those surfaces even before it begins to chemically act on any existing snow
or ice. Petitioner contends that in most cases the rock salt, in bulk form, lasts many times longer
than the duration of the act of the spreading service. The rock salt usually is used more as a
precautionary measure to increase grip and traction, in a physical manner similar to the use of an
aggregate such as sand, rather than as a chemical agent to remove any remaining snow that was not
removed by snow blade or push blade. Petitioner may spread the rock salt before the actual buildup
of ice occurs. Petitioner bids, sells, and bills its salt spreading service wholly separately from snow
removal and plowing.
Applicable law and regulations
Section 1101(b) of the Tax Law provides, in part:
When used in this article for the purposes of the taxes imposed by subdivisions (a),
(b), (c) and (d) of section eleven hundred five and by section eleven hundred ten, the
following terms shall mean:
*

*

*

(3) Receipt. The amount of the sale price of any property and the charge for any
service taxable under this article, including gas and gas service and electricity and electric
service of whatever nature, valued in money, whether received in money or otherwise,
including any amount for which credit is allowed by the vendor to the purchaser, without any
deduction for expenses or early payment discounts and also including any charges by the
vendor to the purchaser for shipping or delivery. . . .
(4) Retail sale.

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(i) A sale of tangible personal property to any person for any purpose, other than (A)
for resale as such or as a physical component part of tangible personal property, or (B) for
use by that person in performing the services subject to tax under paragraphs (1), (2), (3),
(5), (7) and (8) of subdivision (c) of section eleven hundred five where the property so sold
becomes a physical component part of the property upon which the services are performed
or where the property so sold is later actually transferred to the purchaser of the service in
conjunction with the performance of the service subject to tax. Notwithstanding the
preceding provisions of this subparagraph, a sale of any tangible personal property to a
contractor, subcontractor or repairman for use or consumption in erecting structures or
buildings, or building on, or otherwise adding to, altering, improving, maintaining, servicing
or repairing real property, property or land, as the terms real property, property or land are
defined in the real property tax law, is deemed to be a retail sale regardless of whether the
tangible personal property is to be resold as such before it is so used or consumed . . . .
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax -- On and after June first, nineteen hundred seventy-one, there
is hereby imposed and there shall be paid a tax . . . upon:
(a) The receipts from every retail sale of tangible personal property, except as
otherwise provided in this article.
*

*

*

(c) The receipts from every sale, except for resale, of the following services:
*

*

*

(5) Maintaining, servicing or repairing real property, property or land, as such terms
are defined in the real property tax law, whether the services are performed in or outside of
a building, as distinguished from adding to or improving such real property, property or land,
by a capital improvement as such term capital improvement is defined in paragraph nine of
subdivision (b) of section eleven hundred one of this article. . . .
Section 1119(c) of the Tax Law provides, in part:
A refund or credit equal to the amount of sales or compensating use tax imposed by
this article and pursuant to the authority of article twenty-nine, and paid on the sale or use
of tangible personal property, shall be allowed the purchaser where such property is later
used by the purchaser in performing a service subject to tax under paragraph (1), (2), (3), (5),
(7) or (8) of subdivision (c) of section eleven hundred five or under section eleven hundred
ten and such property has become a physical component part of the property upon which the
service is performed or has been transferred to the purchaser of the service in conjunction
with the performance of the service subject to tax or if a contractor, subcontractor or

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repairman purchases tangible personal property and later makes a retail sale of such tangible
personal property, the acquisition of which would not have been a sale at retail to him but
for the second to last sentence of subparagraph (i) of paragraph (4) of subdivision (b) of
section eleven hundred one. . . .
Section 526.5 of the Sales and Use Tax Regulations provides, in part:
Receipt.
(a) Definition. The word receipt means the amount of the sale price of any property
and the charge for any service taxable under articles 28 and 29 of the Tax Law, valued in
money, whether received in money or otherwise. The following subdivisions of this section
discuss elements of a receipt.
*

*

*

(e) Expenses. All expenses, including telephone and telegraph and other service
charges, incurred by a vendor in making a sale, regardless of their taxable status and
regardless of whether they are billed to a customer are not deductible from the receipts.
Section 526.6 of the Sales and Use Tax Regulations provides, in part:
Retail sale. (a) The term retail sale or sale at retail means the sale of tangible
personal property to any person for any purpose, except as specifically excluded.
(b) Special rule--sales specifically included as retail sales.
(1) A sale of any tangible personal property to a contractor, subcontractor or
repairman for use or consumption in erecting structures or buildings or adding to, altering,
improving, maintaining, servicing or repairing real property, property or land, is deemed to
be a retail sale, regardless of whether the tangible personal property is to be resold as such
before it is used or consumed. . . .
*

*

*

*

*

(c) Resale exclusion.
*

(6) Tangible personal property purchased for use in performing services which are
taxable under section 1105(c)(1), (2), (3) and (5) of the Tax Law is purchased for resale and
not subject to tax at the time of purchase, where the property so sold (i) becomes a physical
component part of the property upon which the services are performed, or (ii) is later

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actually transferred to the purchaser of the service in conjunction with the performance of
the service subject to tax.
Section 527.7 of the Sales and Use Tax Regulations provides, in part:
Maintaining, servicing or repairing real property.
(a) Definitions.
(1) Maintaining, servicing and repairing are terms which are used to cover all
activities that relate to keeping real property in a condition of fitness, efficiency, readiness
or safety or restoring it to such condition. Among the services included are services on a
building itself such as painting; services to the grounds, such as lawn services, tree removal
and spraying; trash and garbage removal and sewerage service and snow removal.
*

*

*

(b) Imposition.
(1) The tax is imposed on receipts from every sale of the services of maintaining,
servicing or repairing real property, whether inside or outside of a building.
Opinion
Petitioner contracts with its customers to provide rock salt spreading services, which include
the provision of rock salt, on its customers’ real property without the provision of snow removal
services. Petitioner accomplishes this by spreading rock salt on its customers’ driveways, parking
lots and walkways or wherever loss of traction caused by ice may be a problem. Petitioner may
spread the rock salt before the actual buildup of ice occurs.
Petitioner asserts that its application of rock salt to its customers’ real property is not in
conjunction with snow removal services and that the rock salt becomes a physical component part
of its customers’ real property after its application or, in the alternative, the rock salt is resold to
Petitioner’s customer as such. Petitioner, therefore, contends that tax paid on its purchase of rock
salt should be refundable since it purchases the rock salt for resale.
In Ruston Paving Co., Dec State Tax Commn., September 15, 1986, TSB-H-87(222)S, the
petitioner provided rock salt spreading service in conjunction with the provision of snow removal
services. The petitioner argued that the rock salt was, in effect, purchased by it for resale since the
rock salt was transferred by the petitioner to its customers as such. The Tax Commission found that:
. . . the rock salt purchased by petitioner was purchased for use in performing the
taxable service of snow removal. Such purchases were therefore clearly not for resale. It
is likewise clear that the rock salt did not become a physical component part of petitioner's

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customer's property, nor was the rock salt actually transferred to petitioner's customers in
conjunction with the performance of petitioner's snow removal activities. Any rock salt
which remained on a customer's property was merely incidental to petitioner's snow removal
activities and was of no use to the customer.
While Ruston Paving Co., supra, refers specifically to snow removal services, such services
are merely one of many services which result in the maintenance of real property. Section
527.7(a)(1) of the Sales and Use Tax Regulations, in part, provides that, “Maintaining, servicing and
repairing are terms which are used to cover all activities that relate to keeping real property in a
condition of fitness, efficiency, readiness or safety or restoring it to such condition. Among the
services included are services . . . to the grounds, such as . . . snow removal.” (Emphasis added.)
While the regulation intends to provide some clear examples of what is meant by “maintaining,
servicing and repairing,” it makes no attempt to provide an all-inclusive list of these activities.
In the instant case, Petitioner clearly performs a maintenance or servicing activity for its
customers by applying rock salt to their real property. That the maintenance service performed by
Petitioner is not in conjunction with snow removal services is immaterial in determining whether
Petitioner’s rock salt is a supply purchased for use in a service subject to sales tax under section
1105(c)(5) of the Tax Law. The Tax Commission in Ruston Paving Co., supra, determined that rock
salt used in maintaining real property does not become a physical component part of the real
property. The rock salt is not actually transferred to the owner of the real property in conjunction
with the performance of a maintenance service, because the rock salt does not necessarily have a
continued value to the customer, since any rock salt applied to snow or ice will quickly dissipate and
become useless. The rock salt purchased by Petitioner is, therefore, a supply consumed by Petitioner
in the provision of its maintenance service. The rock salt is not a building material which becomes
a physical component part of the customer’s real property, and is not tangible personal property sold
to the customer as such or actually transferred to the customer. Accordingly, Petitioner’s purchase
of rock salt is for use and consumption in providing its maintenance service, and is subject to sales
and use tax without a right to a refund or credit.
Petitioner’s entire charges to its customer for rock salt spreading service, including any
separately stated charges for supplies such as rock salt, fuel or other expenses incurred by Petitioner,
are also subject to sales tax. See sections 1101(b)(3) and1105(c)(5) of the Tax Law, and section
526.5(e) of the Sales and Use Tax Regulations.

DATED: November 19, 2003

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.