Does New York sales tax apply to the full charge for an integrated pickup-and-disposal trash removal service even when the waste is hauled out of state and simply dumped, with no processing?

Plain-English summary

Michael Gross posed a hypothetical to test the geographic reach of New York's trash-removal tax: X Company, located in New York, hires Y Company to pick up and dispose of its waste. Y Company hauls the waste 75 miles within New York, 50 miles through Pennsylvania, and 100 more miles within Ohio to a landfill, where it simply dumps the waste -- no treatment or processing of any kind. Gross asked three linked questions: is this taxable trash removal regardless of where the waste ends up; does the waste's out-of-state destination reduce the tax; and does separately itemizing the pickup, transportation, and disposal charges on the invoice change the tax owed.

The Department treated collection, hauling, and disposal as one "integrated trash removal service" -- a service of maintaining real property under § 1105(c)(5), since trash and garbage removal is specifically listed among the maintaining/servicing/repairing activities taxed under that section and its regulations. Because the taxable event is the service performed on X Company's New York real property (removing its trash), not the waste's eventual resting place, the entire receipt is taxed at the combined state and local sales tax rate for X Company's New York location -- with no apportionment for the miles traveled outside New York and no reduction just because the landfill happens to sit in Ohio. Itemizing the invoice into separate pickup, transportation, and disposal line items doesn't change the answer either, since all three are part of one integrated service and the tax reaches the "entire receipt" from that service. The Department also flagged that this ruling doesn't reach the harder constitutional questions raised in three prior Tax Appeals Tribunal cases (General Electric, Waste Conversion, and Bristol-Myers) about taxing waste removed from New York -- those cases involved a hauler actually processing or treating the waste, which raised different Commerce Clause concerns. Here, Y Company merely disposes of the waste with no processing, so those concerns don't apply.

What this means for you

Waste haulers and trash-removal companies

Collect New York sales tax on your ENTIRE charge for pickup-through-disposal of a New York customer's waste, based on the New York location where you picked it up -- it doesn't matter how far you haul the waste afterward or whether the final landfill is in another state, so long as you're not processing or treating the waste along the way (which could implicate the different constitutional analysis this opinion flags but doesn't resolve). Itemizing pickup/transport/disposal separately on your invoice won't reduce the tax due.

Businesses generating waste in New York

Expect to pay New York sales tax on the full trash-removal charge regardless of where your hauler ultimately dumps the waste, as long as the service is simple pickup-and-disposal without processing.

Waste haulers who DO process or treat waste before disposal

This opinion doesn't resolve your situation -- it explicitly notes that processing/treatment raises separate constitutional questions addressed in other Tax Appeals Tribunal decisions (General Electric, Waste Conversion, Bristol-Myers), not this one.

Common questions

Q: Does hauling waste out of state reduce or eliminate New York sales tax on the removal charge?
A: No. The tax follows the location of the real property being serviced (where the waste originated in New York), not the waste's ultimate destination.

Q: Does itemizing pickup, transportation, and disposal as separate charges on the invoice lower the tax?
A: No. All three are part of one integrated trash-removal service, and tax applies to the entire receipt regardless of how it's broken out on the bill.

Q: Would the answer change if the hauler processed or treated the waste before disposal?
A: Possibly -- the opinion specifically distinguishes that situation (addressed in the General Electric, Waste Conversion, and Bristol-Myers Tax Appeals Tribunal cases) as raising different constitutional issues not resolved here.

Q: Can another hauling company rely on this exact hypothetical outcome?
A: No. This advisory opinion binds the Department only as to the facts Michael Gross described and only as to him as petitioner; a business with different facts (e.g., waste processing) should seek its own opinion.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(3) (definition of "receipt")
• Tax Law § 1105(c)(5) (tax on maintaining, servicing, or repairing real property)
• 20 NYCRR § 527.7(a)-(b) (trash and garbage removal as a taxable maintaining/servicing/repairing service)

Prior rulings and cases referenced:

• Rochester Gas and Electric v State Tax Commn., 71 NY2d 931
• Cecos Intl. v State Tax Commn., 71 NY2d 934
• Penfold v State Tax Commn., 114 AD2d 696
• Matter of General Electric, Tax App Trib, March 5, 1992, TSB-D-92(22)S
• Matter of Waste Conversion, Tax App Trib, August 25, 1994, TSB-D-94(31)S
• Matter of Bristol-Myers, Tax App Trib, September 15, 1994, TSB-D-94(35)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1996.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a96_57s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-96 (57)S
Sales Tax
September 23, 1996

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S960402A

On April 2, 1996, the Department of Taxation and Finance received a Petition for Advisory
Opinion from Michael Gross, 19 Fairgreen Drive, Amherst, New York 14228.
Petitioner, Michael Gross, raises the following issues regarding the application of sales tax
to the service described in the hypothetical situation below:
1.
Whether the service described in the hypothetical situation is a taxable
service of trash removal, as defined in Section 1105(c)(5) of the Tax Law, regardless
of the ultimate destination of the waste.
2.
Whether the ultimate destination of the waste (within New York
State or out-of-state) has an impact on the amount of sales tax to be charged when
no processing or treatment is performed upon the waste.
3.
Whether separately stating the charges for pick up, transportation
and disposal of the waste on the sales invoice affects the amount of sales tax to be
charged.
Petitioner submits the following hypothetical situation as the basis for this Advisory
Opinion:
X Company, located in New York State, contracts with Y Company to pick
up and dispose of X Company's waste. Y Company picks up the waste and
subsequently transports the waste to Ohio and merely dumps the waste in a landfill.
There is no treatment or processing performed upon the waste. The waste is
transported 75 miles within New York, 50 miles within Pennsylvania and finally 100
miles within Ohio to the landfill.
Applicable Law and Regulations
Section l101(b)(3) of the Tax Law defines "receipt," in part, as follows:
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

-2­
TSB-A-96 (57)S
Sales Tax
September 23, 1996
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
...
Section 1105(c)(5) of the Tax Law imposes tax upon receipts from every sale, except for
resale, of the following services:
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 ....
Section 527.7(a) of the Sales and Use Tax Regulations provides, in part:
Definitions. (1) Maintaining, servicing and repairing are terms which are
used to cover all activities that relate to keeping real property in a condition of
fitness, efficiency, readiness or safety or restoring it to such condition.
Among
the services included are services on a building itself such as painting; services to the
grounds, such as lawn services, tree removal and spraying; trash and garbage removal
and sewerage service and snow removal.
Section 527.7(b) of the regulations provides, in part:
Imposition. (1) The tax is imposed on receipts from every sale of the
services of maintaining, servicing or repairing real property, whether inside or
outside of a building.
*

*

*

(2) All services of trash or garbage removal are taxable, whether from inside
or outside of a building or vacant land.
Opinion
The collection, hauling and disposal of waste constitute an integrated trash removal service.
In the hypothetical situation presented by Petitioner, Y Company is conducting an integrated trash
removal service when it picks up, removes and dumps X Company's waste from X Company's site
in New York. Receipts from the sale of this service are receipts from the service of maintaining real
property, property or land and are subject to tax pursuant to Section 1105(c)(5) of the Tax Law,
regardless of the ultimate destination of the waste. (See, Rochester Gas and Electric v State Tax
Commn., 71 NY2d 931.)
The ultimate destination of the waste (i.e., Ohio) and the manner in which the charges are set
forth on the sales invoice (i.e., in aggregate or itemized) have no impact on the amount of sales tax
to be charged. The sales tax is imposed on the entire receipt from the sale of the integrated trash
removal service at the combined New York State and local sales tax rate in effect in the taxing
jurisdiction where the real property is serviced; that is, the jurisdiction in which X Company's real
property, property or land is located. (See, Cecos Intl. v State Tax Commn., 71 NY2d 934; Penfold

-3­
TSB-A-96 (57)S
Sales Tax
September 23, 1996
v State Tax Commn.,114 AD2d 696.) No apportionment is applicable. The situs for the taxable event
is the local jurisdiction and state in which the real property, property or land being serviced is
located.
The constitutional concerns raised in the matters of General Electric (Tax App Trib, March
5, 1992, TSB-D-92(22)S), Waste Conversion (Tax App Trib, August 25, 1994, TSB-D-94(31)S) and
Bristol-Myers (Tax App Trib, September 15, 1994, TSB-D-94(35)S) regarding the removal of waste
from New York State are not at issue in this Opinion. Unlike the facts applicable in those matters,
Y Company does not process or treat waste, but merely disposes of the waste.

DATED: September 23, 1996

/s/
John W. Bartlett
Deputy Director
Technical Services Bureau

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