NY TSB-A-17(17)S Sales Tax 2017-08-03

Is an on-site fire-safety training program subject to New York sales tax?

Short answer: No. The company's employees travel to a customer's site and deliver a fire-safety program in person — lectures, group discussion, PowerPoint, video, and a hands-on drill using a laser digital-extinguisher simulator. These instructional services aren't among New York's enumerated taxable services, so they aren't taxable. Letting attendees operate the extinguisher simulator under the company's supervision and control doesn't transfer possession or control of the equipment, so the company isn't selling or renting it. And no tangible personal property is transferred to the customer.

Disclaimer: This is an official New York State Department of Taxation and Finance Advisory Opinion (TSB-A), issued by the Office of Counsel at a taxpayer's request. It is limited to the facts set forth in it and binds the Department only with respect to the petitioner to whom it was issued, and only if that petitioner fully and accurately described all relevant facts; another taxpayer cannot rely on it. It reflects the law, regulations, and Department policy in effect when issued and may since have changed. Taxpayer-identifying details are redacted. New York State and local sales taxes are administered centrally by the Department. This summary is informational only and is not legal or tax advice. Consult a licensed New York tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

A fire-protection company sells an on-site fire-safety training program. Its employees travel to the customer's locations and deliver, in person, a mix of lectures, group discussions, custom PowerPoint, video, and a hands-on drill in which attendees — under the employees' direction — operate a laser digital-extinguisher simulator to put out a simulated fire. The program helps customers meet OSHA and NYS Department of Labor requirements, and no tangible personal property is transferred to the customer. The company asked whether it must collect sales tax.

The Office of Counsel said no:

Sales tax reaches retail sales of tangible personal property and enumerated services (Tax Law § 1105(a), (c)). The program — live training, video, and on-site drills — is an instructional service, which is not among the enumerated taxable services (TSB-A-08(41)S).
Letting attendees operate the extinguisher simulator under the company's supervision and control does not transfer possession or control of the equipment, so the company is not selling or renting it (Tax Law § 1101(b)(5); 20 NYCRR 526.7(e)).

What this means for you

Training, safety, and compliance providers

Instructional services — teaching people, even with videos and hands-on drills — aren't a taxable service in New York. The keys here: the program is delivered live by your staff, and you don't hand over any equipment or tangible deliverable.

Watch the equipment-control line

Running a drill where attendees use your equipment under your supervision isn't a taxable rental — but handing over equipment for the customer to use on its own (transfer of possession or control) would be a taxable sale/rental.

Don't transfer tangible deliverables for a single price

The program stayed non-taxable partly because no tangible personal property was transferred. Bundling in taxable goods or prewritten software could change the analysis.

Common questions

Q: We use videos and a simulator — does that make the training taxable?
A: No. It's still an instructional service. Using video and supervised drills as teaching tools doesn't transfer property or make the service taxable.

Q: Are we renting the extinguisher simulator to attendees?
A: No. Attendees operate it under your supervision and control, so there's no transfer of possession or control — it isn't a sale or rental.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Use it as guidance and confirm your own facts.

Citations and references

Tax Law § 1105(a), (c) (tax on tangible personal property and enumerated services)
Tax Law § 1101(b)(5) (definition of sale; transfer of possession or control)
20 NYCRR 526.7(e) (transfer of possession/control)
TSB-A-08(41)S

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2017.htm
Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a17_17s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-17(17)S
Sales Tax
August 3, 2017

Office of Counsel
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE

ADVISORY OPINION

PETITION NO. S170310A

The Department of Taxation and Finance received a Petition for Advisory Opinion
from REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED RE
REDACT (“Petitioner”). Petitioner asks whether it must collect sales tax from sales of its fire
safety training program. We conclude that Petitioner’s sales of its fire safety training program
are not subject to sales tax.
Facts
Petitioner sells equipment and services related to fire protection, fire suppression, and
fire safety solutions to commercial, industrial, and public facilities. Petitioner offers a training
program in which Petitioner’s employees travel to the customer’s business locations to present
the program. The program consists of a combination of lectures, group discussions, custom
PowerPoint presentations, video, and a "hands-on" experience using a digital extinguisher
training system, in which all attendees, under the direction of Petitioner’s employees, operate a
laser digital extinguisher to put out a “fire” simulated on a video screen. All aspects of the
training are provided in person by Petitioner’s employees. The video is transported by
Petitioner’s employees for use at the training program location to supplement their instruction
and to prompt discussion. The program is meant to ensure customers meet their annual
Occupational Safety and Health Organization and New York State Department of Labor
requirements and prepare staff for fire emergencies. The training program does not involve the
transfer of any tangible personal property to the customer.
Analysis
Retail sales of tangible personal property and certain enumerated services are subject to
sales tax. See Tax Law § 1105(a),(c). Petitioner’s training program, including live training,
video, and on-site drills, constitute instructional services that are not among the taxable
services in Tax Law § 1105(c) and therefore are not subject to tax. See TSB-A-08(41)S. In
allowing the customers’ employees to operate the digital fire extinguisher simulator, under the
supervision and control of Petitioner’s employees, to put out a simulated fire, Petitioner does

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TSB-A-17(17)S
Sales Tax
August 3, 2017

not transfer possession or control of the fire extinguisher simulator and, therefore, Petitioner is
not selling the fire extinguisher simulator. See Tax Law § 1101(b)(5); 20 NYCRR 526.7(e).

DATED: August 3, 2017

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

NOTE:

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. The information provided in
this document does not cover every situation and is not intended to replace the law
or change its meaning.