Are lifeguard services and pool maintenance services subject to NY sales tax, including when bundled as a 'total pool service'?

Plain-English summary

The petitioner provides lifeguard and pool services and described four billing scenarios: (1) lifeguard services at an hourly rate; (2) lifeguard services for a fixed summer fee; (3) the fixed summer fee plus the lifeguard skimming leaves/bugs from the pool each morning; and (4) a bundled "total pool service" for a fixed summer fee -- opening and closing the pool for the season, administering chemicals, lifeguarding, and clearing the pool of leaves and bugs. Its lifeguards are Red Cross-certified employees, and the company carries large liability insurance. It asked whether these services are taxable.

The Office of Counsel concluded both kinds of service are taxable:

• Lifeguarding = taxable protective service. Tax Law 1105(c)(8) taxes protective and detective services, including guard, patrol, and watchman services and protection against "injury to persons." A lifeguard's duty -- monitoring the pool to keep swimmers safe and rescuing anyone in trouble -- is protection against injury to persons, so lifeguard services fit within 1105(c)(8).
• Pool maintenance = taxable real-property servicing. To the extent the company removes leaves/bugs, administers chemicals, or opens and closes the pool for the season, it is maintaining or servicing real property, taxable under Tax Law 1105(c)(5) (Publication 862).
• All four scenarios are taxable. Whether billed hourly, as a fixed summer fee, or as a bundled "total pool service," the company must collect sales tax on these services for pools located in New York.

What this means for you

Pool-service and lifeguarding companies

Both halves of this business are taxable in New York: lifeguarding as a protective service (1105(c)(8)) and pool upkeep -- skimming, chemicals, seasonal open/close -- as servicing real property (1105(c)(5)). Bundling them into a single "total pool service" fee doesn't make them nontaxable; collect tax on the charge. (Note both components are independently taxable here, so the usual "primary function" analysis for a mixed bundle doesn't rescue either part.)

Customers (HOAs, clubs, facilities)

Expect sales tax on lifeguard staffing and pool-maintenance contracts for New York pools, including all-in seasonal packages.

Common questions

Q: Are lifeguard services taxable in New York?
A: Yes. Protecting swimmers from injury is a taxable protective service under 1105(c)(8).

Q: Is pool cleaning and chemical service taxable?
A: Yes. Skimming, adding chemicals, and seasonal opening/closing are taxable servicing of real property under 1105(c)(5).

Q: We charge one fixed fee for a 'total pool service' -- does bundling avoid the tax?
A: No. The bundled charge is taxable -- both the lifeguarding and the maintenance components are taxable services.

Citations and references

• Tax Law section 1105(c)(8) (protective and detective services)
• Tax Law section 1105(c)(5) (maintaining/servicing real property)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2011.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a11_5s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-11(5)S
Sales Tax
February 22, 2011

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S110103B

On January 3, 2011, the Department of Taxation and Finance received a petition from name
redacted (Petitioner). Petitioner asks whether the lifeguard and pool maintenance services described
below are subject to sales tax. We conclude that the lifeguard services constitute protective services
subject to tax under Tax Law section 1105(c)(8), and the pool maintenance services constitute
maintaining or servicing real property subject to tax under Tax Law section 1105(c)(5).
Facts
The Petition described four different scenarios:
1. The Petitioner provides lifeguard services for a swimming pool at an hourly rate.
2. The Petitioner provides lifeguard services for a swimming pool at a fixed fee for the entire
summer.
3. The Petitioner provides lifeguard services for a swimming pool at a fixed fee for the entire
summer and in addition to his/her duties as a lifeguard, the lifeguard walks around the pool upon
arriving in the morning and removes any leaves or bugs in the pool.
4. The Petitioner provides a "total pool service," consisting of opening and closing the pool,
administering chemicals, providing lifeguard services, and clearing the pool of leaves, bugs, etc.
The total pool service is provided for the entire summer for a fixed fee.
In order to be a lifeguard, an individual must be certified by the American Red Cross (or similar
accrediting body) as to swimming ability, water safety, water life saving techniques and CPR. The
lifeguard's duty is to monitor pool activities to insure the safety of swimmers, and if needed, to rescue
anyone in the pool who is having trouble swimming or leaving the water. It should also be noted that the
Petitioner carries millions of dollars of liability insurance in case someone is injured when one of the
Petitioner’s lifeguards is on duty. The lifeguards are employees of the Petitioner. In scenario 4, “opening
and closing the pool” refers to the first opening of the pool for the season and the final season closing of
the pool. At the beginning of the season, the pool cover needs to be removed, heaters and filters need to
be set up, and the pool water treated. At the end of the season, the same process occurs to close the pool
(except everything is disassembled rather than assembled.)
Analysis
Tax Law section 1105(c)(8) subjects to tax the receipts from
“[p]rotective and detective services, including, but not limited to, all services
provided by or through alarm or protective systems of every nature, including, but not

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TSB-A-11(5)S
Sales Tax
February 22, 2011

limited to, protection against burglary, theft, fire, water damage or any malfunction of
industrial processes or any other malfunction of or damage to property or injury to
persons, detective agencies, armored car services and guard, patrol and watchman
services of every nature other than the performance of such services by a port watchman
licensed by the waterfront commission of New York harbor, whether or not tangible
personal property is transferred in conjunction therewith.”
As noted in the facts, the duty of the lifeguard is to ensure the safety of the swimmers and to
rescue anyone in the pool having trouble swimming or leaving the water. These duties provide protection
against injury to persons, and as such, fit within the description of protective services in section
1105(c)(8).
In addition, to the extent that the lifeguards remove bugs and leaves from the pool, or administer
chemicals to the pool, or Petitioner has staff that opens and closes the pool for the season, Petitioner is
maintaining or servicing real property which are services subject to tax under section 1105(c)(5). See
Publication 862, Sales and Use Tax Classifications of Capital Improvements and Repairs to Real
Property (April 2001), p. 24.
Petitioner is required to collect sales tax on the receipts that it receives for the services described
above for those pools located in New York State.

DATED: February 22, 2011

NOTE:

/S/
DANIEL SMIRLOCK
Deputy Commissioner and Counsel

An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set
forth therein and is binding on the Department only with respect to the person or entity to
whom it is issued and only if the person or entity fully and accurately describes all relevant
facts. An Advisory Opinion is based on the law, regulations, and Department policies in effect
as of the date the Opinion is issued or for the specific time period at issue in the Opinion.