Must a large housing cooperative collect New York sales tax on the fees it charges tenant-shareholders for parking spaces and garages?

Plain-English summary

United Veterans Mutual Housing Company, Inc., a cooperative real-estate corporation of about 850 apartments in Queens (a "garden-type maisonette dwelling project" built before 1954), asked whether it must collect sales tax on the fees it charges for parking spaces and garages. The parking spaces are leased by the cooperative to the users; tenant-shareholders do not and cannot own them; the parking charge is separate from the monthly maintenance charge; and shareholders aren't required to lease a space.

The Department said yes, the fees are taxable:

• Parking services are taxable. Tax Law § 1105(c)(6) taxes the service of providing parking, garaging, or storing motor vehicles by a person operating a garage, parking lot, or other place of business providing parking.
• The only carve-out is a private one/two-family dwelling. The single exclusion in § 1105(c)(6) is for parking that is part of premises occupied solely as a private one- or two-family dwelling.
• An 850-unit co-op doesn't fit. United Veterans is a corporation that owns over 850 apartments, and the parking facilities are not part of the individual residences. So its parking and garage charges are not excluded and are taxable. The Department added that whether a "garden-type maisonette dwelling project" once counted as a "multiple dwelling" under the Multiple Dwelling Law is irrelevant to the § 1105(c)(6) exclusion.

What this means for you

Providing parking for a fee is a taxable service

If you operate a garage, lot, or other place of business that provides parking, garaging, or storing of motor vehicles for a charge, that charge is generally subject to New York sales tax under § 1105(c)(6) — this applies to housing cooperatives, condos, and apartment operators, not just commercial parking lots.

The one/two-family-dwelling exclusion is narrow

The exclusion is for parking that is part of premises occupied solely as a private one- or two-family dwelling — think a house with its own garage. A large multi-unit building or cooperative whose parking is separate from the individual residences does not qualify, no matter how the project is classified under housing law.

Separately billed, separately owned — still taxable

The result didn't change because parking was billed separately from maintenance or was optional. What mattered is that the cooperative owns and leases the spaces and the parking is not part of a private one/two-family dwelling. (Contrast the situation where the parking spaces are actually owned by individual tenant-shareholders and the fees merely allocate their own costs — a different fact pattern the Department has treated as not taxable.)

Common questions

Q: Are parking fees charged by a housing co-op taxable in New York?
A: Yes, if the co-op operates the parking and the spaces aren't part of a private one- or two-family dwelling. The fees are taxable under § 1105(c)(6).

Q: What is the only exclusion?
A: Parking that is part of premises occupied solely as a private one- or two-family dwelling.

Q: Does billing parking separately from maintenance change the answer?
A: No. Separate billing didn't make the fees non-taxable here; the taxability turns on who provides the parking and whether it's part of a one/two-family dwelling.

Q: Does it matter how the housing project is classified under the Multiple Dwelling Law?
A: No. The Department said that classification is irrelevant to the § 1105(c)(6) parking exclusion.

Citations and references

Statutes, regulations, and authorities:

• Tax Law § 1105(c)(6) (tax on providing parking, garaging, or storing motor vehicles; only exclusion is parking that is part of premises occupied solely as a private one- or two-family dwelling)
• Multiple Dwelling Law § 4(8) (definitions of "class A" multiple dwelling and "garden-type maisonette dwelling project" — noted as not relevant to the tax exclusion)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1992.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a92_2s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-92 (2)S
Sales Tax
January 30, 1992

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S910917B

On September 17, 1991 a Petition for Advisory Opinion was received from United Veterans
Mutual Housing Company, Inc., 221-22 Manor Road, Queens Village, New York 11427.
The issue raised by Petitioner, United Veterans Mutual Housing Company, Inc., is whether
it is required to collect sales tax on fees charged for parking spaces and garages.
Petitioner is a Cooperative Real Estate Corporation consisting of approximately 850
apartments, located in Queens County. The units were constructed prior to 1954. They were
constructed under the Private Housing Finance Law and the corporation was considered to be a
limited dividend housing corporation. It initially had a 100% real estate tax exemption which had
now expired. The project initially was operated under the direction of the New York State Division
of Housing but now is a totally private enterprise. The facility qualifies as a Garden Type Maisonette
Dwelling Project under Section 4, subd. 8b of the New York Multiple Dwelling Law. Such housing
if erected prior to April 18, 1954 were deemed to be a group of private dwellings. If erected
subsequent to that date, such housing was deemed to be a group of multiple dwellings.
Tenant-shareholders do not and cannot own the parking spaces. All parking spaces are leased
by the cooperative corporation to the lessee, the charges for the parking are separate from the
monthly maintenance charges and tenant-shareholders are not required to lease a parking space.
Subdivision 8 of the Multiple Dwelling Law provides that:

8. a. A "class A" multiple dwelling is a multiple dwelling which is occupied,
   as a rule, for permanent residence purposes. This class shall include tenements, flat
   houses, maisonette apartments, apartment houses, apartment hotels, bachelor
   apartments, studio apartments, duplex apartments, kitchenette apartments, garden­
   type maisonette dwelling projects, and all other multiple dwellings except class B
   multiple dwellings.
   b. A "garden-type maisonette dwelling project" is a series of attached,
   detached or semi-detached dwelling units which are provided as a group collectively
   with all essential services such as, but not limited to, water supply and house sewers,
   and which units are located on a site or plot not less than twenty thousand square feet

-2­
TSB-A-92 (2)S
Sales Tax
January 30, 1992

in area under common ownership and erected under plans filed with the department on or
after April eighteenth, nineteen hundred fifty-four, and which units together and in their
aggregate are arranged or designed to provide three or more apartments.
Section 1105(c)(6) of the Tax Law imposes a tax upon the services of "[P]roviding parking,
garaging or storing for motor vehicles by persons operating a garage (other than a garage which is
part of premises occupied solely as a private one or two family dwelling), parking lot or other place
of business engaged in providing parking, garaging or storing for motor vehicles."
The only charge for parking that is excluded from sales tax by Section 1105(c)(6) of the Tax
Law is for parking that is part of a premises occupied solely as a private one or two family dwelling.
Petitioner is a corporation which owns over 850 apartments. The parking facilities are not part of the
individual residences. Consequently, its charges for parking and garage space are not excluded from
the tax imposed under Section 1105(c)(6) of the Tax Law. The fact that at one time a "garage type
maisonette dwelling project" was not considered to be a multiple dwelling under the Multiple
Dwelling Law is not relevant to the issue as to whether the project is entitled to the exemption
provided by Section 1105(c)(6) of the Tax Law.

DATED: January 30, 1992

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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