Does an out-of-state manufacturer that only occasionally demos at a New York trade show and ships to New York customers by mail or common carrier have to collect New York sales tax?

Plain-English summary

Electron Fusion Devices, Inc., a Rhode Island manufacturer of precision liquid dispensing equipment, asked whether it had to collect New York sales tax on goods delivered to New York customers by mail or common carrier. Its New York contacts were minimal: no place of business or owned property in the state, no employees, independent contractors, or agents soliciting business there, and no maintenance staff sent into New York (equipment is serviced elsewhere). The one wrinkle was that Petitioner might exhibit at a New York trade show for two or three days, no more than once a year, where its products were demonstrated but not sold. Customers found Petitioner through national trade-publication ads and then called or wrote in to order -- with the phone answered and mail received outside New York.

The Tax Law's "vendor" definition (§ 1101(b)(8)) sweeps in sellers who solicit business through employees or agents in the state, who regularly or systematically deliver property in the state by means other than mail or common carrier, or whose in-state solicitation otherwise satisfies constitutional nexus requirements. The Department applied the Court of Appeals' Orvis Co. standard, which requires a vendor's in-state presence to be "demonstrably more than a 'slightest presence.'" An occasional, once-a-year, few-day trade-show demonstration (where nothing is sold) did not meet that bar, especially combined with the total absence of any other in-state solicitation or property. Because sales were made only by mail-order response to national advertising and fulfilled via mail or common carrier -- exactly the delivery method the vendor definition excludes from creating nexus on its own -- Petitioner was not a "vendor" required to register or collect New York sales tax.

What this means for you

Out-of-state manufacturers and mail-order/e-commerce sellers

If your only New York contact is national advertising that generates mail or phone orders fulfilled by mail or common carrier, and you have no in-state property, employees, or agents soliciting business, this opinion supports treating yourself as outside New York's vendor-registration requirement. Watch the trade-show exception closely, though -- it worked here specifically because the appearance was brief (two-to-three days), infrequent (no more than annual), and non-selling (demonstration only, no sales transacted at the show).

Businesses that exhibit more often, sell at the show, or send staff into New York

This ruling doesn't cover you. A trade show that happens multiple times a year, involves actual sales, or is paired with any other in-state solicitation or servicing activity could tip the "demonstrably more than a slightest presence" balance the other way -- get your own advisory opinion rather than relying on this one.

Common questions

Q: Does attending any New York trade show create a sales-tax collection duty?
A: Not automatically -- here, a brief, no-more-than-annual demonstration with no sales made at the show did not create nexus. More frequent or sales-generating shows could come out differently.

Q: Does shipping by mail or common carrier avoid nexus by itself?
A: It helps -- the vendor definition specifically excludes property "regularly or systematically" delivered by means OTHER than U.S. mail or common carrier from that particular nexus trigger. But it's the combination with zero other in-state solicitation or property that produced the "no collection duty" result here.

Q: Can another out-of-state seller rely on this ruling for its own operations?
A: No. This advisory opinion binds the Department only as to Electron Fusion Devices and the specific facts it described; even a seemingly similar seller should seek its own opinion.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(8) (definition of "vendor")
• Tax Law § 1131(1) (persons required to collect tax)

Prior rulings and cases referenced:

• Matter of Orvis Co. v Tax Appeals Tribunal of State of NY, 86 NY2d 165, cert den, 133 LEd2d 426

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_62s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-96 (62)S
Sales Tax
October 1, 1996

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S960529B

On May 29, 1996, the Department of Taxation and Finance received a Petition for Advisory
Opinion from Electron Fusion Devices, Inc., 977 Waterman Avenue, East Providence, Rhode Island,
02914.
The issue raised by Petitioner, Electron Fusion Devices, Inc., is whether Petitioner, a Rhode
Island corporation, is liable to collect New York State and local sales tax on goods that are delivered
via U.S. mail or common carrier to New York customers.
Petitioner submits the following facts as the basis for this Advisory Opinion. Petitioner is a
manufacturer of precision liquid dispensing equipment. Petitioner does not maintain a place of
business in New York State nor does it have an ownership interest in property in New York.
Petitioner states that it does not solicit business by employees, independent contractors, agents or
other representatives in New York State. Petitioner may, however, participate in a trade show in New
York for two or three days no more than once a year, at which its products are demonstrated, but not
sold or offered for sale. Also, Petitioner does not send maintenance personnel into New York to
service equipment. The equipment is serviced outside of New York. Petitioner does not regularly
or systematically deliver property or services in New York by means other than U.S. mail or
common carrier.
Petitioner advertises in national trade publications and as a result of these advertisements is
contacted by telephone and mail by customers worldwide who wish to order Petitioner's products.
The telephone is answered outside of New York State. Also, the mailing address is located outside
of New York State.
Section ll0l(b) of the Tax Law provides, in part:
(b) When used in this article for the purposes of the taxes imposed by
subdivisions (a), (b), (c) and (d) of section eleven hundred five and by section eleven
hundred ten, the following terms shall mean:
*
*
*
(8) Vendor. (i) The term "vendor" includes:
(A) A person making sales of tangible personal property or services, the
receipts from which are taxed by this article;
(B) A person maintaining a place of business in the state and making sales,
whether at such place of business or elsewhere, to persons within the state of tangible
personal property or services, the use of which is taxed by this article;

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Sales Tax
October 1, 1996
(C) A person who solicits business either:
(I) by employees, independent contractors, agents or other representatives; or
(II) by distribution of catalogs or other advertising matter, without regard to
whether such distribution is the result of regular or systematic solicitation, if such
person has some additional connection with the state which satisfies the nexus
requirement of the United States constitution; and by reason thereof makes sales to
persons within the state of tangible personal property or services, the use of which
is taxed by this article;
(D) A person who makes sales of tangible personal property or services, the
use of which is taxed by this article, and who regularly or systematically delivers
such property or services in this state by means other than the United States mail or
common carrier;
(E) A person who regularly or systematically solicits business in this state by
the distribution, without regard to the location from which such distribution
originated, of catalogs, advertising flyers or letters, or by any other means of
solicitation of business, to persons in this state and by reason thereof makes sales to
persons within the state of tangible personal property, the use of which is taxed by
this article, if such solicitation satisfies the nexus requirement of the United States
constitution;
(F) A person making sales of tangible personal property, the use of which is
taxed by this article, where such person retains an ownership interest in such property
and where such property is brought into this state by the person to whom such
property is sold and the person to whom such property is sold becomes or is a
resident or uses such property in any manner in carrying on in this state any
employment, trade, business or profession.
Section 1131 of the Tax Law provides, in part:
(1) "Persons required to collect tax" or "person required to collect any tax
imposed by this article" shall include: every vendor of tangible personal property or
services; every recipient of amusement charges; and every operator of a hotel. Said
terms shall also include any officer, director or employee of a corporation or of a
dissolved corporation, any employee of a partnership, any employee or manager of
a limited liability company, or any employee of an individual proprietorship who as
such officer, director, employee or manager is under a duty to act for such
corporation, partnership, limited liability company or individual proprietorship in
complying with any requirement of this article; and any member of a partnership or
limited liability company. Provided, however, that any person who is a vendor solely
by reason of clause (D) or (E) of subparagraph (i) of paragraph (8) of

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Sales Tax
October 1, 1996
subdivision (b) of section eleven hundred one shall not be a "person required to
collect any tax imposed by this article" until twenty days after the date by which such
person is required to file a certificate of registration pursuant to section eleven
hundred thirty-four.
*
*
*
(4) "Property and services the use of which is subject to tax" shall include: (a)
all property sold to a person within the state, whether or not the sale is made within
the state, the use of which property is subject to tax under section eleven hundred ten
or will become subject to tax when such property is received by or comes into the
possession or control of such person within the state; (b) all information services,
protective and detective services and interior decorating and design services as such
services are described in subdivision (c) of section eleven hundred five, rendered to
a person within the state, whether or not such services are rendered from or at a
location within the state; (c) all services rendered to a person within the state,
whether or not such services are performed within the state, upon tangible personal
property the use of which is subject to tax under section eleven hundred ten or will
become subject to tax when such property is received by or comes into possession
or control of such person within the state; (d) all property sold by a person making
sales described in clause (F) of subparagraph (i) of paragraph eight of subdivision (b)
of section eleven hundred one of this article to a person described in such clause (F)
who purchases such property at retail, whether or not the sale is made within the
state; and (e) all telephone answering service rendered to a person within the state,
whether or not such services are performed within the state, the use of which is
subject to tax under section eleven hundred ten or will become subject to tax when
such service is received by or comes into possession or control of such person within
the state.
In Matter of Orvis Co. v Tax Ap_Deals Tribunal of State of NY (86 NY2d 165, 178, cert den
US, 133 LEd2d 426), the Court of Appeals indicated that the Commerce clause requires a
presence of the vendor "demonstrably more than a 'slightest presence'"
In this case, Petitioner does not maintain a place of business in New York State nor does it
have ownership interest in property in New York. Petitioner may participate at a trade show in New
York for two or three days no more than once a year, at which Petitioner's products are demonstrated,
but not sold. Petitioner does not otherwise solicit business by employees, independent contractors,
agents or other representatives in New York State. Also, Petitioner does not send maintenance
personnel into New York to service equipment. Petitioner does not regularly or systematically deliver
property or services in New York by means other than U.S. mail or common carrier. Petitioner does
advertise in national trade publications and as a result of these advertisements is contacted by
telephone and mail by customers worldwide who wish to order Petitioner's products.

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Sales Tax
October 1, 1996
Under the facts presented above and assuming no other activities by Petitioner sufficient to
satisfy the statutory and constitutional provisions, Petitioner is not required to register as a vendor
and is not liable to collect New York State and local sales tax on its goods that are delivered via U.S.
mail or common carrier to New York customers.

DATED: October 1, 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.