Is a sandpit operator's charge for letting a customer dump clean fill at the excavation site subject to New York sales tax?

Plain-English summary

110 Sand Company operates a sandpit, mining sand and gravel for sale. It also accepts loads of clean fill from "customers" — mostly truckers hauling material from demolition jobs — and charges them $2.00 per yard to dump it. The company had been collecting sales tax on that charge and asked whether the tax was actually due.

The Department held the dumping charge is not taxable.

• New York taxes only listed services. Under § 1105(c), sales and use tax applies to services only where the service is one of those specifically enumerated in the statute.
• Accepting fill isn't a listed service. The service of letting someone dump clean fill at the site is not among the enumerated taxable services.
• Result: no tax. There is no tax due on the company's receipts from those charges, and none should be collected.

What this means for you

Services are taxable in New York only if the statute names them. Unlike tangible goods (taxable unless exempt), a service escapes sales tax entirely unless it falls within one of the specifically listed categories. A charge for accepting or disposing of fill isn't on that list.

Collecting tax you don't owe creates its own problems. This operator had been charging sales tax on a nontaxable service. If you've been collecting tax on a charge that turns out not to be enumerated, stop collecting it — and be aware that tax you did collect generally has to be remitted or properly refunded, not simply kept.

Check the service list before assuming a charge is taxable. When a new revenue stream doesn't clearly match an enumerated service, it may not be taxable at all. Confirm which § 1105(c) category, if any, it fits.

Common questions

Q: I run a pit and charge people to dump clean fill. Do I charge sales tax?
A: No. The Department held that letting customers dump clean fill is not an enumerated taxable service, so no sales tax is due on the charge.

Q: Why isn't a service like this taxable?
A: New York taxes services only if they're specifically listed in § 1105(c). A service that isn't on that list is outside the sales tax, regardless of how the charge is structured.

Q: I've been collecting tax on this charge. What now?
A: You should stop collecting it. Tax already collected generally must be remitted or properly refunded to the customers; keep records if you correct past collections.

Citations and references

Statute:

• Tax Law § 1105(c) — sales and use tax applies to services only where the service is one of those specifically enumerated; a charge for a non-enumerated service is not taxable

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1983.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a83_4s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-83(4)S
Sales Tax
February 15, 1983

Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S830114A

On January 14, 1983 a Petition for Advisory Opinion was received from 110 Sand Company,
P.O. Box 485, Farmingdale, New York 11735.
The issue raised is whether the charge to a "customer" for allowing such "customer" to dump
clean fill at an excavation site is subject to New York State sales tax. It is concluded herein that it
is not subject to tax.
Petitioner operates a sandpit, mining sand and gravel for sale. Petitioner accepts loads of
clean fill from "customers", the bulk of whom are truckers hauling materials from demolition jobs.
Petitioner charges such "customers" $2.00 per yard, and collects sales tax on such charge.
The Tax Law imposes sales and use taxes on enumerated services only. Since Petitioner's
service is not one of those so enumerated, there is no tax due on Petitioner's receipts and none should
be collected.

DATED: January 28, 1983

s/FRANK J. PUCCIA
Director
Technical Services Bureau

ROBERT W. BOUCHARD, ACTING COMMISSIONER
GABRIEL B. DiCERBO , DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR
TP-8 (8/82)