For a maid service, are apartment cleaning, laundry, laundry-cost reimbursement, and travel charges each subject to New York sales tax?

Plain-English summary

A for-hire maid service (Maid in New York) cleans customers' apartments for a set labor charge and separately offers optional laundry service. A combined bill might read: labor $50, laundry $10, quarters for the machines $4, travel $2.50. The company asked whether each of those four charges is subject to sales tax.

The Department sorted them out:

1. Apartment cleaning — TAXABLE. Interior cleaning and maintenance of an apartment is "maintaining and servicing" real property, taxable under Tax Law § 1105(c)(5).
2. Laundry — NOT taxable. Laundering clothing is specifically excluded from tax by § 1105(c)(3)(ii). Because the laundry service is optional and can be bought separately from the taxable cleaning, the single-unit rule of § 527.1(b) doesn't sweep it into tax — the laundry charge stays exempt.
3. Reimbursement of laundry costs (quarters for the machines) — NOT taxable. This is an expense of performing the nontaxable laundering service, so it isn't taxable either.
4. Travel — TAXABLE (in full). Here's the trap: the travel expense couldn't be split between the taxable cleaning and the nontaxable laundry. Under § 526.5(e), expenses a vendor incurs in making a sale aren't deductible from receipts — and because the travel charge couldn't be segregated, the entire travel charge is taxable.

What this means for you

Cleaning and maid services

Interior apartment/house cleaning is taxable real-property maintenance under § 1105(c)(5) — collect tax on that labor. Add-on services get analyzed separately: laundry and dry-cleaning are statutorily exempt (§ 1105(c)(3)(ii)), and a genuinely optional, separately purchasable laundry charge keeps its exempt status even when it appears on the same bill as taxable cleaning.

The expense-allocation trap

Reimbursed costs follow the service they belong to — laundry-machine quarters ride the exempt laundry service and stay untaxed. But a shared cost that you can't attribute to one service or the other is taxable in full under § 526.5(e). If you want travel (or any shared expense) to be partly nontaxable, you generally need to segregate it between the taxable and nontaxable services; an unsplittable lump is taxed entirely.

Accountants and tax professionals

The opinion is a clean illustration of § 526.5(e) (expenses of a sale aren't deductible from the taxable receipt) working alongside the § 527.1(b) single-unit rule. The key move is that separately purchasable services aren't "sold as a single unit," so the exempt laundry stays exempt — but an unallocable shared expense (travel) defaults to taxable.

Common questions

Q: Is apartment cleaning by a maid service taxable in New York?
A: Yes. Interior cleaning and maintenance of an apartment is taxable real-property maintenance under Tax Law § 1105(c)(5).

Q: Is the laundry charge taxable?
A: No. Laundering clothing is excluded from tax by § 1105(c)(3)(ii). Because the laundry service is optional and can be bought separately, it stays exempt even when billed alongside taxable cleaning.

Q: What about the quarters charged to run the washers and dryers?
A: Not taxable. Reimbursement of the money spent to launder clients' clothes is an expense of performing the nontaxable laundering service, so it isn't subject to tax.

Q: Why is the travel charge taxable?
A: Because it couldn't be segregated between the taxable cleaning and the nontaxable laundry. Under 20 NYCRR § 526.5(e), expenses incurred in making a sale aren't deductible from receipts, so the entire unsplittable travel charge is taxable.

Q: Could I make part of the travel charge nontaxable?
A: The opinion turned on the fact that the travel couldn't be segregated. Expenses attributable solely to a nontaxable service (like the laundry-machine quarters) aren't taxed, so a properly allocated portion of a shared cost may follow the same logic — but an unallocable lump is taxable in full.

Q: Can another cleaning business 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)(5) (tax on maintaining, servicing or repairing real property)
• Tax Law § 1105(c)(3)(ii) (laundering, dry-cleaning, tailoring, pressing, and shoe repair excluded from tax)
• Tax Law § 1101(b)(3) (definition of "receipt")
• 20 NYCRR § 526.5(e) (expenses incurred in making a sale are not deductible from receipts)
• 20 NYCRR § 527.1(b) (taxable and exempt items sold as a single unit are taxed on the total price)

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_80s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-92 (80) S
Sales Tax
November 13, 1992

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S920918A

On September 18, 1992, a Petition for Advisory Opinion was received from Maid in New
York, Inc., 200 Park Avenue South, New York, New York 10003.
The issues raised by Petitioner, Maid in New York, Inc. are:
1.

Whether charges by Petitioner for cleaning apartments are subject to sales tax.

2.

Whether charges by Petitioner for doing clients' laundry are subject to sales tax.

3.

Whether charges by Petitioner for reimbursement of the money spent to launder
clients' clothes are subject to sales tax.

4.

Whether charges by Petitioner for travel expenses are subject to sales tax.

Petitioner operates a for hire maid service in which maids are hired by customers to clean
their apartments. Customers are billed a set amount for the labor to clean the apartments. In
addition, Petitioner offers an optional service to customers for doing laundry. A set fee for
doing laundry is charged by Petitioner, separate and distinct from any fee charged for
cleaning the apartments. Customers are also billed for the money spent to operate the
washing machines and dryers and expenses incurred for traveling to the apartments. A
customer purchasing both services would receive a bill for the total charges, broken down
as follows:
Labor
Laundry
Quarters for Machines
Travel

$50.00
$10.00
$ 4.00
$ 2.50
$66.50

Section 1105(c) of the Tax Law imposes sales tax on the receipts from every sale, except for
resale of the following services:
*
*
*
(3) Installing tangible personal property, excluding a mobile home, or
maintaining, servicing or repairing tangible personal property, including a mobile
home, not held for sale in the regular course of business, whether or not the services
TP-9 (9/88)

-2­
TSB-A-92 (80) S
Sales Tax
November 13, 1992
are performed directly or by means of coin-operated equipment or by any other means, and whether
or not any tangible personal property is transferred in conjunction therewith, except:
*
*
*
(ii) any receipts from laundering, dry-cleaning, tailoring, weaving, pressing, shoe repairing
and shoe shining; and
*
*
*
(5) Maintaining, servicing or repairing real property, property or land, as such terms are
defined in the real property tax law, whether the services are performed in or outside of a building,
as distinguished from adding to or improving such real property, property or land, by a capital
improvement as such term capital improvement is defined in paragraph nine of subdivision (b) of
section eleven hundred one of this chapter, but excluding services rendered by an individual who is
not in a regular trade or business offering his services to the public. (emphasis added)
Section 1101(b)(3) of the Tax Law defines the term "receipts" to mean:
(3) Receipt. The amount of the sale price of any property and the charge for any service
taxable under this article, valued in money, whether received in money or otherwise, including any
amount for which credit is allowed by the vendor to the purchaser, without any deduction for
expenses or early payment discounts and also including any charges by the vendor to the purchaser
for shipping or delivery regardless of whether such charges are separately stated in the written
contract, if any, or on the bill rendered to such purchaser and regardless of whether such shipping
or delivery is provided by such vendor or a third party, but excluding any credit for tangible personal
property accepted in part payment and intended for resale and excluding the cost of transportation
of tangible personal property sold at retail where such cost is separately stated in the written contract,
if any, and on the bill rendered to the purchaser. For special rules governing computation of receipts,
see section eleven hundred eleven. (emphasis added)
Section 526.5(e) of the Sales and Use Tax Regulations provides as follows:
(e) Expenses. All expenses, including telephone and telegraph and other service charges,
incurred by a vendor in making a sale, regardless of their taxable status and regardless of whether
they are billed to a customer are not deductible from the receipts.
Example 1: A photographer contracts with a customer to furnish
photographs at $50.00 each in addition to expenses. The customer is billed
as follows:

-3­
TSB-A-92 (80) S
Sales Tax
November 13, 1992
Photographs (2) . . . . . . . . . . . . . . . . . . . . . . . . . $100.00
Model fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
Meals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.00
Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Props (Flowers) . . . . . . . . . . . . . . . . . . . . . . . . .
5.00
Total Due . . . . . . . . . . . . $200.00
Receipt subject to tax is $200.00
Example 2: An appliance repairman charges $10.00 per
hour plus expenses when on a service call. The customer is billed as
follows:
3 Hrs. at $10.00 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30.00
Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Parts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Meals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00
Total Due . . . . . . . . . . . . .$ 70.00
Receipt subject to tax is $70.00 (emphasis added)
Section 527.1(b) of the Sales and Use Tax Regulations provides that:
(b) Taxable and exempt items sold as a single unit. When tangible personal
property, composed of taxable and exempt items is sold as a single unit, the tax shall
be collected on the total price.
Example:

A vendor sells a package containing assorted cheeses, a cheese board and a
knife for $15. He is required to collect tax on $15.

Concerning issue "1", the interior cleaning and maintenance of apartments constitutes the
maintaining and servicing of real property. Therefore, pursuant to Section 1105(c)(5) of the Tax
Law, the receipts received by Petitioner for cleaning apartments is subject to sales tax.
With respect to issue "2", pursuant to Section 1105(c)(3)(ii) of the Tax Law the receipts from
laundering clothing is not subject to sales tax. Accordingly, since such service is an optional service
offered by Petitioner which can be purchased separately from the taxable service of cleaning the
apartments, pursuant to Section 527.1(b) of the Sales and Use Tax Regulations Petitioner's charges
for laundering clothing is not subject to sales tax.
As to issue "3", charges by Petitioner for reimbursement of money spent to launder clients'
clothing is not subject to sales tax since it is expense incurred in performing a service which is not
subject to sales tax pursuant to Section 1105(c)(3)(ii) of the Tax Law.

-4­
TSB-A-92 (80) S
Sales Tax
November 13, 1992
Regarding issue "4", since the travel expenses incurred by Petitioner cannot be segregated
as to the amount of expenses incurred for the taxable maid service and the amount incurred for the
non-taxable laundering service, pursuant to Section 526.5(e) of the Sales and Use Tax Regulations
the entire travel expense is subject to sales tax.

DATED: November 13, 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.