Are shampooing, dry cleaning, and hand-weaving repair services for oriental carpets and other rugs subject to New York sales tax, whether performed at the customer's location or at a plant?

Subject

Issues raised by Petitioner, Donald Schapiro, are: (1) Whether the services of shampooing and dry cleaning oriental carpets and other rugs performed either at a customers location or at a plant are subject to sales tax, and (2) whether the repair of an oriental carpet by weaving is subject to sales tax.

What this means for you

A business shampoos and dry cleans rugs and carpets, either traveling to the customer's location or working at its own plant, and also repairs oriental carpets by hand -- using a needle and thread to individually hand-knot broken threads back together.

New York generally taxes services that install, maintain, service, or repair tangible personal property -- but the statute carves out a specific list of exceptions: laundering, dry-cleaning, tailoring, weaving, pressing, shoe repairing, and shoe shining. The Department has long applied that exclusion not just to clothing but also to wall-to-wall carpeting, rugs, drapes, and upholstery (citing decisions going back to 1971 and 1987). Because both shampooing/dry cleaning and hand-weaving repair of oriental carpets and rugs fall squarely within that exclusion, none of these services are taxable -- and it doesn't matter whether the work happens at the customer's home or at the business's own plant.

Q&A

Q: We shampoo and dry clean area rugs and carpets, sometimes at the customer's home and sometimes back at our shop -- is either version taxable?
A: No, per this opinion -- both are excluded from tax under the dry-cleaning exclusion in Tax Law § 1105(c)(3)(ii), regardless of where the work is performed.

Q: We repair damaged oriental carpets by hand-weaving broken threads back together -- is that a taxable repair service?
A: No, per this opinion -- hand-weaving repair of a carpet falls within the same "weaving" exclusion, so it's not subject to sales tax.

Q: Does this exclusion cover other textile items, like upholstery or drapes, the same way?
A: Per this opinion, yes -- the Department has historically applied this same exclusion to wall-to-wall carpeting, rugs, drapes, and upholstery generally (in cloth, vinyl, or leather), not just to oriental carpets specifically.

Citations

• Tax Law § 1105(c)(3)(ii) -- excludes laundering, dry-cleaning, tailoring, weaving, pressing, shoe repairing, and shoe shining from the tax on maintaining/servicing/repairing tangible personal property.
• 20 NYCRR § 527.5(b)(3) -- confirms tax is not imposed on laundering, dry-cleaning, tailoring, weaving, pressing, shoe repairing, or shoe shining services.
• Matter of Rando Enterprises, Decision of the State Tax Comm'n, December 23, 1971, STM 72-20 -- prior decision extending the dry-cleaning exclusion to carpet/upholstery-type cleaning.
• Broome Steam Carpet Cleaning Inc., Adv. Op. Comm. T&F, November 16, 1987, TSB-A-87(42)S -- prior opinion applying the same exclusion to carpet cleaning services; followed here.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1994.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a94_8s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-94 (8)S
Sales Tax
March 1, 1994

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S930611A

On June 11, 1993 a Petition for Advisory Opinion was received from Donald Schapiro, 30
Rockefeller Plaza, 23rd Floor, New York, NY 10112-0127.
The issues raised by Petitioner, Donald Schapiro, are:
(1)
Whether the services of shampooing and dry cleaning oriental carpets and other rugs
performed either at a customers location or at a plant are subject to sales tax.
(2)

Whether the repair of an oriental carpet by weaving is subject to sales tax.

As part of its services, an entity shampoos and dry cleans rugs and carpets at its customers'
locations or at the entity's own plant. The entity also repairs oriental carpets by hand. The process
is performed by using a hand held needle and thread and by individually hand knotting threads.
Section 1105 of the Tax Law states, in part:
Imposition of sales tax.--...
... there is hereby imposed and there shall be paid a tax of four percent upon:
(a)
The receipts from every retail sale of tangible personal property,
except as otherwise provided in this article.
(c)
services:

The receipts from every sale, except for resale, of the following

(3)
Installing tangible personal property .... or maintaining, servicing or
repairing tangible personal property, not held for sale in the regular course of
business, whether or not the services 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; ...
Section 527.5 of the New York Sales and Use Tax Regulations states, in part:
Installing, repairing, servicing and maintaining tangible personal property. [Tax Law,
§1105(c)(3)]

-2­
TSB-A-94 (8)S
Sales Tax
March 1, 1994
(a)
Imposition. (1) The tax is imposed on receipts from every sale of the
services of installing, maintaining, servicing or repairing tangible personal property,
by any means including coin-operated machines, whether or not any tangible personal
property is transferred in conjunction with the services.
(b)

Exemptions.

(3) Tax is not imposed on the services of laundering, dry-cleaning, tailoring,
weaving, pressing, shoe repairing and shoe shining. . . .
The Department of Taxation and Finance has followed the policy of applying Section
1105(c)(3)(ii) of the Tax Law and Section 527.5(b)(3) of the Regulations not only to services
performed on apparel but also to the cleaning of wall-to-wall carpeting, rugs, drapes and of
upholstery, whether covered in cloth, vinyl fabric or leather. Matter of Rando Enterprises, Decision
of the St Tax Comm, Dec. 23, 1971, STM 72-20; Broome Steam Carpet Cleaning Inc., Adv Op
Comm T&F, November 16, 1987, TSB-A-87(42)S.
Consequently, Petitioner's receipts from charges to customers for the services of shampooing
and dry cleaning oriental carpets and other rugs, whether performed at the customer's location or at
Petitioner's location and from the repair of an oriental carpet by weaving fall within the exclusion
from tax provided under Section 1105(c)(3)(ii) of the Tax Law and Section 527.5(b)(3) of the Sales
and Use Tax Regulations and, accordingly, are not subject to the tax imposed under Section
1105(c)(3) of the Tax Law.

DATED: March 1, 1994

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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