Does a vibration-monitoring company owe sales tax on the seismograph equipment it buys to provide monitoring services?

Plain-English summary

A vibration-monitoring company uses seismographs to continuously measure and record ground vibrations near construction sites, then delivers the data to customers in reports. It asked whether buying the seismographs is subject to sales tax.

The Office of Counsel said yes. A seismograph is tangible personal property, and its purchase is taxable unless an exemption or exclusion applies. Here, the company uses the equipment to provide its monitoring service and does not resell it to customers, and no other equipment exemption fits. So the purchase of the seismograph is subject to sales tax.

What this means for you

Engineering, testing, and monitoring service providers

Equipment you buy to perform a service — and keep, rather than resell — is generally taxable when you purchase it, even though your service receipts may not be taxable. The resale exclusion needs an actual resale of the equipment, not use of it to deliver a service.

Construction-adjacent monitoring/survey firms

Plan for sales/use tax on instruments (seismographs, sensors, dataloggers) bought as business tools. Exemptions like production machinery don't apply to service equipment.

Accountants and tax professionals

Straightforward § 1105(a) imposition on tangible personal property used by a service provider; no resale and no equipment exemption means the purchase is taxable.

Common questions

Q: Our service may not be taxable — why is the equipment taxable?
A: The taxability of your equipment purchase is separate. You buy and keep the seismograph to perform a service, so it's a taxable purchase of tangible personal property.

Q: Could I buy it for resale instead?
A: Only if you actually resell the equipment as such. Using it to deliver a service isn't a resale.

Q: Is there an equipment exemption that applies?
A: The Department found none applicable here.

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) (sales tax on retail sales of tangible personal property)
• Tax Law § 1101(b)(6) (definition of tangible personal property)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales-ao-2020.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a20-53s.pdf

Original ruling text

New York State Department of Taxation and Finance
Office of Counsel

TSB-A-20(53)S
Sales Tax
October 20, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
The Department of Taxation and Finance received a Petition for Advisory Opinion from
[ REDACTED ] (“Petitioner”). Petitioner asks whether sales tax is due on the purchase of
seismograph equipment that the Petitioner uses to provide vibration monitoring services to
customers under Articles 28 and 29 of the Tax Law. We conclude that Petitioner’s purchases of
seismographs are subject to sales tax.
Facts
Petitioner is a vibration monitoring company that provides data to customers for
development projects. Its services include pre-and post-construction surveys, seismographic
monitoring programs, crack monitoring, and general engineering oversight. Petitioner provides
vibration monitoring programs that continuously monitor and record peak particle velocities at
properties adjacent to construction sites. This data then is used to generate alerts if the vibration
threshold has been exceeded. Seismographs are used to gather the necessary data to perform
these measurements. The seismograph has a computer attached to it that records and stores all
data. Once the data is collected, it then is provided to the customer in a report.

Analysis
Petitioner asks whether its purchase of a seismograph used in its vibration monitoring
program is subject to state and/or local sales tax under Articles 28 and 29 of the Tax Law.
Generally, Tax Law § 1105(a) imposes a sales tax on receipts from every retail sale of tangible
personal property unless otherwise excluded or exempted. Tangible personal property is defined
as “[c]orporeal personal property of any nature.” Tax Law § 1101(b)(6).
The seismograph is equipment used to monitor, gather and report vibration data. Thus, it
qualifies as tangible personal property. Petitioner uses the seismograph to monitor vibrations and

-2-

TSB-A-20(53)S
Sales Tax
October 20, 2020

provide reports to its customers. It does not resell the equipment to its customers and there
is no other applicable equipment exemption. Therefore, Petitioner’s purchase of the
seismograph is subject to sales tax.
DATED: October 20, 2020

/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.