Are coin-operated vacuum machines and tire-inflation machines at car washes and gas stations exempt from New York sales tax?

Plain-English summary

Service Station Vending Equipment, Inc. installs coin-operated vacuum machines and coin-operated air machines (for inflating tires) at three types of locations: self-service coin-operated car washes, gasoline stations, and car wash facilities (not coin-operated) that don't include vacuuming as part of the wash price. The vacuum function works the same self-service way at all three location types. The company asked whether its vacuum-machine and tire-inflation-machine receipts are exempt from sales tax following a new car-wash exemption that took effect December 1, 1997.

The Department split the answer by machine and location. A new provision, Tax Law § 1115(t), exempts a car wash facility's receipts from coin-operated washing, waxing, or vacuuming, as long as the customer operates the equipment entirely themselves (using coins, currency, or tokens) with no assistance from the vendor or its employees. Because that exemption applies to services performed "at a car wash facility," the company's vacuum machines at self-service coin-operated car washes are exempt, and its vacuum machines at other (non-coin-operated) car wash facilities are also exempt as long as no employee helps the customer vacuum. But vacuum machines installed at a plain gasoline station -- one without an on-site car wash facility -- don't qualify, because § 1115(t) only reaches services performed at a car wash facility, and a gas station without a car wash isn't one.

Tire-inflation machines are treated differently no matter where they sit. Section 1115(t) exempts only washing, waxing, and vacuuming -- inflating a tire is "maintaining" tangible personal property (keeping it in a condition of fitness, efficiency, readiness, or safety), which remains a taxable service under § 1105(c)(3) regardless of the coin-operated exemption. The Department also flagged a related wrinkle: even on an otherwise-exempt vacuum machine, if it's set up to also accept debit or credit cards (not just coins, currency, or tokens), sales made by debit or credit card on that same machine are not covered by the exemption.

What this means for you

Car wash and gas station operators installing coin-operated equipment

The new car-wash coin-operated exemption is narrower than it might first appear: it only reaches washing, waxing, and vacuuming performed at a genuine car wash facility, entirely self-service (coins, currency, or tokens only, no employee assistance), and it does not extend to tire-inflation machines or to vacuum machines at a bare gas station with no car wash on premises.

Vending equipment companies serving multiple location types

Track exactly which type of premises each machine sits at (car wash facility vs. plain gas station) and which payment methods each machine accepts (coin/token only vs. debit/credit-enabled), since both distinctions directly change the taxability of the same physical machine's receipts.

Accountants and tax professionals

This is a clean illustration of the "strictly construed" exemption principle in 20 NYCRR § 528.1(c): a new, narrowly worded exemption (§ 1115(t), effective December 1, 1997) covers only the specific service (washing/waxing/vacuuming), specific location (car wash facility), and specific payment method (coin-operated) the statute names -- everything just outside those boundaries (tire inflation, non-car-wash locations, card payments) stays taxable under the general rule.

Common questions

Q: Are all coin-operated vacuum machines at gas stations exempt from sales tax?
A: No. The exemption applies only to vacuum services provided at a car wash facility. A gas station without an on-site car wash doesn't qualify, even though the vacuum function works identically.

Q: Is inflating a car tire with a coin-operated air machine exempt like vacuuming is?
A: No. Tire inflation is a taxable "maintaining" service under § 1105(c)(3); the car-wash coin-operated exemption in § 1115(t) covers only washing, waxing, and vacuuming.

Q: Does using a debit or credit card at an otherwise-exempt vacuum machine still qualify for the exemption?
A: No. The exemption is limited to money or tokens deposited in the coin-operated equipment; debit or credit card sales on the same machine are not exempt.

Q: Does this ruling apply to my car wash or vending equipment business?
A: Not automatically. An Advisory Opinion binds the Department only for the taxpayer and facts it was issued to, and it can't be relied on by anyone else. It shows how the Department reasons, but your facts may differ.

Citations and references

Statutes and regulations:

• Tax Law § 1105(a) (tax on retail sales of tangible personal property)
• Tax Law § 1105(c)(3) (installing, maintaining, servicing, or repairing tangible personal property)
• Tax Law § 1115(t) (car wash coin-operated equipment exemption, effective December 1, 1997)
• 20 NYCRR § 527.5 (installing, maintaining, servicing, repairing)
• 20 NYCRR § 528.1(c) (strict construction of exemptions)
• TSB-M-97(12)S, dated November 28, 1997 (Summary of Sales Tax Changes, 1997 Budget Legislation)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1998.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a98_29s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-98(29)S
Sales Tax

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S980213A

On February 13, 1998, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Service Station Vending Equipment, Inc., P.O. Box 334, New Hyde Park,
NY 11040.1
The issues raised by Petitioner, Service Station Vending Equipment, Inc., are the following:

1. Whether sales of the service from coin-operated vacuum machines are exempt from sales
   tax after December 1, 1997.
2. Whether sales of the service from coin-operated air machines, used to inflate tires, are
   exempt from sales tax after December 1, 1997.
   Petitioner submitted the following facts as the basis for this Advisory Opinion.
   Petitioner's business consists of coin-operated vacuum machines for motor vehicles and coin­
   operated air machines used to inflate automobile tires. These two types of machines are installed in
   the following three types of businesses:
3. Self service coin-operated car wash facilities
4. Gasoline stations
5. Car wash facilities, other than coin-operated, which do not provide
   part of the price of a car wash

vacuuming as

The coin-operated vacuum service is the same self service function at the gasoline stations
and the non-coin operated car wash facilities as it is at the coin-operated car wash facilities. The
other type of machine installed by Petitioner is the coin-operated air machine used to inflate
automobile tires. These machines are also located at coin-operated car washes, gasoline stations and
non-coin operated car wash facilities.
Applicable Law and Regulations
Section 1105 (a) of the Tax Law imposes sales tax on the receipts from every retail sale of
tangible personal property, except as otherwise provided.
1 On October 27, 2006, this address was substituted for the address originally
given in Opinion.

2
TSB-A-98(29)S
Sales Tax
Section 1105 (c) of the Tax Law imposes a 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 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...
Subdivision (t) of Section 1115 of the Tax Law, effective December 1, 1997, provides:
(t) Receipts of a car wash facility from every sale, except for resale, of the service of
washing, waxing, or vacuuming a motor vehicle or other tangible personal property
and consideration given or contracted to be given for such service at such a facility,
where the purchaser or user of the service washes, waxes or vacuums such person=s
motor vehicle or other tangible personal property at such a facility by means
exclusively of coin-operated equipment at such facility of the vendor providing the
service and neither the vendor nor any employee of the vendor assists the purchaser
in washing, waxing, or vacuuming the vehicle or other tangible personal property,
shall be exempt from tax under this article, to the extent of the amount of money or
value, in money, of tokens deposited in such coin-operated equipment by the
purchaser of the service. For purposes of this subdivision, the term Acoin-operated@
includes coin-operated, currency-operated or token-operated and the term Amotor
vehicle@ shall mean a motor vehicle as defined in subdivision (f) of section eleven
hundred thirty-two of this article.
Section 527.5 of the Sales and Use Tax Regulations provides, in part:
(3) Maintaining, servicing, and repairing are terms used to cover all activities that
relate to keeping tangible personal property in a condition of fitness, efficiency,
readiness or safety or restoring it to such condition.
Section 528.1 of the Sales and Use Tax Regulations provides, in part:
(c) Exemptions from the sales and compensating use tax are strictly construed. For
an exemption to be allowed, it must clearly appear that a transaction is eligible for
the exemption. The burden of proving nontaxability is on the person claiming the
exemption.
Opinion
Effective December 1, 1997 receipts from coin-operated equipment located at a car wash
facility used to wash, wax or vacuum a motor vehicle are exempt from sales tax. Therefore,
Petitioner=s sales of services from coin-operated vacuum machines at self-service car wash facilities

3
TSB-A-98(29)S
Sales Tax
are exempt from sales and use tax. Petitioner=s sales of services from these same vacuum machines
located at other car wash facilities are also exempt from tax, provided that the vendor or an
employee of the vendor does not vacuum or assist in vacuuming the vehicle. Petitioner=s receipts
from the sales of the vacuum machine service located at gasoline stations would not qualify for this
exemption unless the gasoline station has a car wash facility located on its premises, since Section
1115(t) of the Tax Law states that the service must be at a car wash facility.
Receipts from the sales of services rendered by tire inflating machines are taxable. Section
1115(t) of the Tax Law only exempts the services of washing, waxing and vacuuming a motor
vehicle. Inflating of tires is maintaining tangible personal property to keep it in a condition of
fitness, efficiency, readiness or safety, and is therefore taxable under Section 1105(c)(3) of the Tax
Law.
It should be noted that in the case of any vacuum machine which accepts debit or credit cards
as well as coins, currency or tokens, the sales made with debit or credit cards would not be exempt
from sales and use tax. (See Technical Services Bureau Memorandum, Summary of Sales Tax
Changes 1997 Budget Legislation, November 28, 1997, TSB-M-97(12)S)

DATED: 5/14/98

NOTE:

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

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