Is a subcontractor's charge to erect tubular scaffolding or pipe framing for a building renovation subject to New York sales tax?

Plain-English summary

Yates Group, Ltd. restores the exterior walls of tall buildings. To reach the walls it needs tubular scaffolding (pipe framing) — a temporary steel-pipe-and-wood-plank structure erected against a building during construction and later dismantled and reused elsewhere. Yates asked whether a subcontractor's charge to erect that scaffolding during a major renovation or restoration is subject to sales tax.

The Department said yes, it is taxable. Regulation § 541.8 exempts a subcontractor's charges for certain "temporary facilities" that are necessary prerequisites to a capital improvement — the regulation lists things like temporary heat, temporary electric service, temporary protective pedestrian walkways, and temporary plumbing. But scaffolding and its installation are not on that list and do not fall within the regulation's definition of "temporary facilities." So the subcontractor's charge to erect the scaffolding is subject to State and local sales tax — and that is true regardless of whether Yates owns, leases, or rents the scaffolding, and regardless of whether the underlying job is a capital improvement or a repair.

What this means for you

Restoration and construction contractors

Don't assume scaffolding rides along tax-free with a capital improvement. Even on a bona fide capital improvement job, a subcontractor's charge to erect scaffolding is taxable. The narrow § 541.8 "temporary facilities" exemption covers a specific list (temporary heat, electric, protective walkways, plumbing) — scaffolding isn't in it. Budget the sales tax on scaffolding erection into your job costs.

Why the capital-improvement certificate doesn't help here

For the listed temporary facilities, the exemption depends on the subcontractor holding a capital-improvement certificate. Because scaffolding isn't a qualifying "temporary facility" at all, no certificate changes the result — the erection charge is taxable either way.

Accountants and tax professionals

The holding rests entirely on Reg. § 541.8's closed list of exempt "temporary facilities." Scaffolding erection is a taxable charge (a § 1105(c) service) that falls outside that list; ownership/lease/rental status and capital-improvement-vs-repair status are all irrelevant to the outcome.

Common questions

Q: Is scaffolding tax-free if it's used on a capital improvement job?
A: No. The subcontractor's charge to erect scaffolding is taxable even on a capital improvement, because scaffolding is not one of the "temporary facilities" the regulation exempts.

Q: What counts as an exempt "temporary facility" under § 541.8?
A: The regulation lists temporary heat, temporary electric service, temporary protective pedestrian walkways, and temporary plumbing — provided the subcontractor has the customer's capital-improvement certificate. Scaffolding is not on that list.

Q: Does it matter whether I own, lease, or rent the scaffolding?
A: No. The Department said the erection charge is taxable regardless of whether you own, lease, or rent the scaffolding, and regardless of whether the job is a capital improvement or a repair.

Q: Can another taxpayer rely on this opinion?
A: No. An advisory opinion binds the Department only as to the petitioner and the facts described; another taxpayer with different facts cannot rely on it.

Citations and references

Statutes and authorities:

• Tax Law § 1105(c)(3) (tax on installing, servicing, and repairing tangible personal property)
• Tax Law § 1105(c)(5) (tax on maintaining, servicing, or repairing real property)
• Sales and Use Tax Regulations § 541.8 (charges for temporary facilities at construction sites)

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_71s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-92 (71) S
Sales Tax
October 22, 1992

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S920630D

On June 30, 1992 a Petition for Advisory Opinion was received from Yates Group, Ltd., 99
Alexander Avenue, Bronx, New York 10454.
The issue raised by Petitioner, Yates Group, Ltd., is whether charges by a subcontractor for
erecting tubular scaffolding or pipe framing for use by a contractor during a major renovation or
restoration of a building are subject to sales tax.
Petitioner, Yates Group, Ltd., is in the business of restoration of exterior walls. It is often
necessary that tubular scaffolding be erected in order for Petitioner to perform restoration work on
the exterior walls of tall buildings.
Tubular scaffolding or pipe framing is a temporary construction of steel pipe and wood
planking which is universally used to assist in accessing the exterior walls of a building during
capital improvement construction.
The tubing is erected in vertical self-supporting sections and temporarily braced into the
building's walls. The height of the framing is determined only by the elevation at which capital
improvement construction is to be performed on the building exterior.
At the top of the framing and at intermediate locations where work is to be performed, wood
planking is laid across pipe framing to form a horizontal platform on which men can stand to
accomplish their work.
Upon completion of the capital improvement work on the building exterior, the temporary
pipe framing is dismantled and both the pipe and the wood are either brought to another building for
reassembly, or returned to the storage yard until their services are again required at another
construction site.
Section 541.8 of the Sales and Use Tax Regulations states, in part:
Charges for temporary facilities at construction sites. [Tax Law, §1105(c)(3) (5)] (a) General.
Subcontracts to provide temporary facilities at construction sites, which are a necessary
prerequisite to the construction of a capital improvement to real property, are considered a
part of the capital improvement to real property. Charges for installation of materials and the
labor to provide temporary heat, temporary electric service, temporary protective pedestrian
walkways, and temporary plumbing by a subcontractor are therefore not subject to tax
provided the subcontractor receives a copy of the properly completed certificate of capital
improvement issued by the customer to the contractor ....
TP-9 (9/88)

-2­
TSB-A-92 (71) S
Sales Tax
October 22, 1992

Section 541.8(a) of the Regulations provides that receipts from charges by subcontractors for
providing certain temporary facilities which are considered necessary prerequisites to the
construction of a capital improvement to real property and which are considered a part of the capital
improvement are not subject to sales tax. However, the providing of scaffolding and the installation
of scaffolding are not considered to fall within the definition of "temporary facilities" as such
classification is defined in Section 541.8 of the Sales and Use Tax Regulations.
Accordingly, the charges to Petitioner by the subcontractor for erecting tubular scaffolding
or pipe framing for use in a major renovation or restoration of a building are subject to State and
local sales tax regardless of whether Petitioner owns the scaffolding or leases or rents the scaffolding
and regardless of whether Petitioner is performing a capital improvement or a repair.

DATED:

October 22, 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.