Is a marina's charge for off-season land storage of boats a taxable storage service or a nontaxable lease of real property?

Plain-English summary

Genesee Marina, Inc., doing business as Riverview Yacht Basin, sells and repairs boats, provides dock space during the boating season, and rents land space for off-season boat storage. Its space-rental agreement puts the boat at the owner's risk, states that no bailment is created, and gives the owner unlimited ingress and egress to a designated area. The marina asked whether the off-season land-storage charge is a taxable storage service or a nontaxable lease of real property.

The Department held the off-season boat storage is taxable.

• The statute taxes storage. Section 1105(c)(4) taxes storing tangible personal property not held for sale. "Storage" is "the provision of a place for the safekeeping of goods, without regard to the manner of payment or length of time" (20 NYCRR 527.6(a)).
• Lease vs. storage. A nontaxable lease is distinguished from a taxable storage service where the tenant contracts for a certain amount of footage in a specific location, has unlimited control of access, and may supply his own racks and fixtures.
• Here it's storage. The marina's agreement is "not distinguished from the provision of storage space" because it does not specify "a certain amount of footage in a specific location." That the owner has unlimited access and the contract disclaims a bailment did not save it — the missing "specific footage/location" term is decisive.
• The regulation's own example says so. Example 1 (527.6(b)(2)): a person moors a boat in a slip in summer and stores it on land in winter — the mooring charges are not taxable; the storage charges are taxable.

What this means for you

Seasonal boat storage on land is taxable in New York. The regulation calls it out directly: summer in-water mooring is nontaxable, but winter land storage is a taxable storage service. Marinas should collect tax on off-season land storage.

Disclaiming "bailment" or granting access doesn't convert storage into a lease. The one fact that would make it a nontaxable real-property lease is a commitment of a specific measured location to the customer. Without that, it's storage — even if the customer can come and go freely.

Same test as records and warehouse storage. This mirrors the companion opinion TSB-A-85(12)S: New York uses the same specific-space / unlimited-access / own-racks markers to separate a nontaxable lease from a taxable storage service across settings.

Common questions

Q: We store customers' boats on land over the winter. Do we charge sales tax?
A: Yes. Off-season land storage of boats is a taxable storage service under § 1105(c)(4), and the regulation's Example 1 says so specifically.

Q: Our contract says the owner assumes all risk and there's no bailment. Isn't that a lease?
A: No. What makes it a nontaxable lease is committing a specific amount of footage in a specific location. Risk and bailment language doesn't change the result.

Q: Is summer slip mooring taxable too?
A: No. Per Example 1, mooring charges are not taxable; it's the land storage that's taxable.

Citations and references

Statute:

• Tax Law § 1105(c)(4) — tax on storing tangible personal property not held for sale in the regular course of business

Regulation:

• 20 NYCRR 527.6 — defines "storage"; distinguishes a nontaxable lease (specific footage/location, unlimited access, tenant's own racks) from a taxable storage service; Example 1 — winter land boat storage is taxable, summer mooring is not

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1985.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a85_10s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-85(10)S
Sales Tax
May 20, 1985

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S840201A

On February 1, 1984 a Petition for Advisory Opinion was received from Genesee Marina,
Inc. d/b/a Riverview Yacht Basin, 18 Petten Street Extension, Rochester, New York 14612.
The issue raised is whether space rented by Petitioner for off-season storage of motor boats
and sail boats is subject to tax as storage or excluded from tax as the rental of real property.
Petitioner is the owner of a marina which is primarily engaged in the sale and repair of boats.
Petitioner also provides dock space for boats during the boating season and land storage space for
boats during the off-season.
Petitioner submitted a copy of its space rental agreement with its Petition. The space rental
agreement provides that the rental of space is at the owner's risk and that a bailment is not created.
Petitioner stated that the space rented is a designated area on its real property and that, during
the time the space rental agreement is in effect, the boat owner has unlimited ingress and egress to
the rental space.
Section 1105(c)(4) of the Tax Law imposes a tax on the services of storing all tangible
personal property not held for sale in the regular course of business.
The term "storage" is defined in the Sales and Use Tax Regulations as " . . . the provision of
a place for the safekeeping of goods, without regard to the manner of payment or length of time of
the service. "20 NYCRR 527.6(a)
Such Regulations provide further that:
"While the tax is imposed on the service of providing storage space, it is not imposed on the
lease of real property for storage. A lease can be distinguished from the provision of storage space,
in that under a lease, the tenant contracts for a certain amount of footage in a specific location, the
tenant has unlimited control of access to the space and may supply his own racks, cabinets and other
physical facilities. . ." (Emphasis added)
"Example 1:

A person moors his boat in a slip, at a marina, during the summer months,
and places it in storage on land during the winter months. The charges for
mooring are not taxable; the charges for storage are taxable." 20 NYCRR
527.6(b)(2)

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-85(10)S
Sales Tax
May 20, 1985

In the instant case, Petitioner's space rental agreement is not distinguished from the provision
of storage space since the contract does not specify "a certain amount of footage in a specific
location." The provision of storage space by Petitioner is therefore subject to tax.

DATED: April 30, 1985

FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth herein.