NY TSB-A-18(5)S Sales Tax 2018-08-20

Are subcontracted carpet, window and floor cleaning services subject to New York sales tax?

Short answer: It splits. Cleaning rugs and wall-to-wall carpeting falls within the laundering/dry-cleaning exclusion (Tax Law § 1105(c)(3)(ii)), so it isn't taxable — provided the carpet-cleaning charge is separately stated from other services and reasonable in relation to the total. But the company's other services — window cleaning, cleaning of uncarpeted floors, and any floor repair or restoration — are taxable services of maintaining/servicing/repairing tangible personal property or real property under §§ 1105(c)(3) and (5).

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 company provides floor and window cleaning to retail stores, offices, and restaurants through subcontractors. Its crews clean carpets (stain removers, neutral cleaner, water extraction) and do other floor cleaning to "clean, restore and/or repair floors." It asked whether sales tax applies.

The Office of Counsel split the answer:

Maintaining, servicing, and repairing tangible personal property and real property are generally taxable (Tax Law §§ 1105(c)(3), (5)). But § 1105(c)(3)(ii) excludes laundering and dry cleaning, and the Department reads that exclusion to cover cleaning rugs, wall-to-wall carpeting, draperies, and upholstery (TSB-A-08(8)S; TB-ST-740).
So the company's rug and carpet cleaning is exempt — if the charge is separately stated from other cleaning services and is reasonable in relation to the overall charge.
The company's other services are taxable: window cleaning, cleaning of uncarpeted floors, and any floor repair/restoration (a taxable service to real property — repair, maintenance, stripping, sanding, waxing, etc., per Publication 862).

What this means for you

Cleaning and janitorial contractors

Carpet/rug (and upholstery/drapery) cleaning rides the laundering exclusion and isn't taxable — but only if you separately state a reasonable charge for it. Window cleaning, hard-floor cleaning, and floor refinishing/repair are taxable. Bundle them into one line and you risk taxing the whole charge.

Invoice structure is the whole game

List the carpet/upholstery cleaning separately and reasonably to keep it exempt; keep the taxable floor/window work on its own lines so tax applies only to those.

Customers buying these services

Expect no tax on the carpet-cleaning portion (separately stated) and tax on window cleaning, hard-floor cleaning, and floor repairs.

Common questions

Q: Why is carpet cleaning exempt but floor cleaning taxable?
A: Carpet, rug, drapery, and upholstery cleaning fall within the laundering/dry-cleaning exclusion; cleaning or repairing hard floors and windows is a taxable service to property.

Q: What do I have to do to keep carpet cleaning non-taxable?
A: Separately state the carpet-cleaning charge from your other services and keep it reasonable in relation to the total.

Q: Is stripping and waxing a floor taxable?
A: Yes — floor cleaning, stripping, sanding, waxing, and repair are taxable services of maintaining real property.

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(c)(3) (taxable services to tangible personal property; laundering/dry cleaning exclusion)
Tax Law § 1105(c)(5) (taxable maintaining, servicing or repairing real property)
TSB-A-08(8)S; TSB-A-94(8)S; TSB-A-87(42)S; TB-ST-740; Publication 862

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2018.htm
Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a18-5s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-18(5)S
Sales Tax
August 20, 2018

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

PETITION NO. S170705A

The Department of Taxation and Finance received a Petition for an Advisory Opinion
from REDACTED REDACTED REDACTED REDACTED REDACTED REDACTED.
(“Petitioner”). Petitioner asks whether sales tax applies to the sub-contracted floor and carpet
cleaning services it provides to a variety of businesses.
We conclude that Petitioner’s rug and carpet cleaning services are exempt from sales tax,
but other cleaning services and floor repair services are subject to sales tax.
Facts
Petitioner provides floor and window cleaning services through subcontractors to retail
stores, corporate offices and restaurants. Petitioner’s subcontracted crews go to customer
locations to clean carpets using stain removers, a neutral cleaner and water extraction.
Petitioner’s floor cleaning work involves a variety of products to “clean, restore and/or repair
floors.”
Analysis
Maintaining, servicing and repairing tangible personal property and real property
generally are subject to sales tax. See Tax Law §1105 (c)(3) and (5). Tax Law §1105(c)(3)(ii)
excludes the services of laundering and dry cleaning. The Department has interpreted this
exclusion to include the services of cleaning rugs, wall-to-wall carpeting, draperies and
upholstery. See TSB-A-08(8)S; TSB-A-94(8)S; TSB-A-87(42)S; TB-ST-740.
Petitioner’s rug and carpet cleaning services are within this exclusion and are not subject
to sales tax if the charge for those services are separately stated from other cleaning services and
the separately-stated charge for rug or carpet cleaning is reasonable in relation to the overall
charge. Petitioner’s other cleaning services, including window cleaning and cleaning of
uncarpeted floors, and any repair services it performs, are subject to sales tax. See TB-ST-740;
Publication 862, Sales and Use Tax Classifications of Capital Improvements and Repairs to Real

-2-

TSB-A-18(5)S
Sales Tax
August 20, 2018

Property (repair, maintenance or partial replacement of flooring and cleaning, stripping, sanding,
waterproofing, painting, staining, varnishing and waxing existing floors are subject to sales tax).

DATED: August 20, 2018

/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.