Is a university's annual campus vehicle registration fee, separate from its parking fee, subject to New York sales tax?

Plain-English summary

The State University of New York at Binghamton had charged a $14-per-year vehicle registration fee for at least 20 years, requiring anyone driving on campus to display a permanent registration permit. The fee funds staff who input vehicle identification and ownership data, letting the university contact an owner in an emergency (like a car with its lights left on or leaking fluids) or to report damage -- it confers no parking privileges at all. Separately, since 1990 (after the state cut roughly $400,000 from the university's budget and directed it to recoup the funds through parking charges), the university has charged an $86-per-year parking fee, using a separate hang-tag permit, with revenue applied to lot maintenance, snow removal, and security. The two fees are billed separately, tracked in separate accounts, and governed by separate campus regulations. The university had been collecting sales tax on both fees and asked whether the registration fee specifically should be taxable.

The Department focused on the specific New York sales tax provision that taxes charges for "providing parking, garaging or storing for motor vehicles." Since registering a vehicle isn't one of the other services New York's sales tax law separately taxes, the only way the registration fee could be taxable is if it counted as a parking-related receipt. But the Department found the registration and parking fees serve genuinely distinct purposes under separate sections of the university's own governing regulations: registration exists to identify and track vehicles on campus (similar in purpose to the state's general vehicle registration requirement), while parking is a separate privilege requiring its own fee and permit. Because the registration fee doesn't confer any parking rights and isn't a charge for parking, garaging, or storing a vehicle, it falls outside the sales tax on parking services entirely and isn't taxable.

What this means for you

Colleges, universities, and other institutions charging campus vehicle fees

A genuinely separate identification/registration fee -- one that doesn't grant parking privileges and is billed, accounted for, and authorized separately from your parking fee -- isn't taxable as a parking charge. Keep the two fees structurally distinct (separate permits, separate accounting, separate authorizing regulations) to preserve this treatment.

Institutions currently taxing a bundled registration-and-parking fee

If your registration fee and parking fee are billed and administered as one combined charge, you may be over-collecting tax on the registration portion. Consider whether the two fees can be separated based on your actual practices and regulations.

Accountants and tax professionals

The key factual anchors the Department relied on were: separate campus regulations (8 NYCRR §§ 566.3 and 566.5) authorizing each fee independently, separate accounting/reporting treatment, separate permits, and the registration fee's stated purpose (vehicle identification/emergency contact) rather than a right to park.

Common questions

Q: Is a university parking fee taxable the same way as a registration fee? A: Not necessarily -- this ruling addresses only the registration fee and expressly states the parking fee is a separate charge with its own tax analysis (parking is generally taxable under Tax Law § 1105(c)(6)).

Q: What makes a vehicle registration fee different from a parking fee for tax purposes? A: Whether the fee confers any parking privilege. A fee that only identifies and documents a vehicle, without any right to park, isn't a parking-related receipt even if payment is also required to bring a vehicle on campus.

Q: Would combining the registration and parking fees into one charge change the answer? A: Likely -- the Department's conclusion relied heavily on the fees being genuinely separate in purpose, billing, and governing regulations; a combined fee could be treated differently.

Q: Does this ruling apply to my institution's vehicle fees? 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. Whether your fees are similarly distinct depends on your own structure and regulations.

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_5s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-98(5)S
Sales Tax

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S971103B

On November 3, 1997, the Department of Taxation and Finance received a Petition for Advisory Opinion from State University of New York at Binghamton, P.O. Box 6000, Binghamton, New York 13902-6000. Petitioner provided additional information pertaining to the Petition on December 4, 1997. The issue raised by Petitioner, State University of New York at Binghamton, is whether fees collected from students and staff for the purpose of registering their vehicles (vehicle registration fees) are subject to sales tax. Petitioner submits the following facts as the basis for this Advisory Opinion. Petitioner has charged a vehicle registration fee for at least 20 years which covers the cost of documenting vehicles that may be on campus. Registrants receive a vehicle registration permit which must be permanently affixed to the vehicle. The revenue from the vehicle registration fee is placed in a separate account and is used to pay for staff to input data collected concerning the identification and owner of the vehicle. This information enables Petitioner to identify and contact the owner in the event of an emergency, such as lights being left on or leaking fluids, or to report damages. The registration fee is currently $14 per year per vehicle registered. The registration confers no parking privileges. Petitioner began charging a parking fee in 1990. The 1989-1990 fiscal year State Budget removed approximately $400,000 from Petitioner’s budget. Petitioner was specifically instructed by the State to recover these funds by charging a fee for parking. The parking fee is separately stated on Petitioner’s invoices, and is separate from the registration fee for accounting and financial reporting purposes. Petitioner issues a university parking permit, in the form of a hang­ tag, upon payment of the parking fee. Revenue from the parking fee is placed in a separate account and used to maintain the lots (paving, snow removal, security patrols) so that parking is available to persons who pay the parking fee. The parking fee is currently $86 per year. The parking fee is not at issue in this Advisory Opinion. Petitioner has been collecting sales tax on the vehicle registration fees and on the annual parking fees, as well as on paid parking lot and parking garage receipts, receipts from parking meters and day passes. Applicable Law and Regulations Section 1101(b)(3) of the Tax Law, in defining the term "receipts" for purposes of the sales tax sets forth, in pertinent part, that receipt means "...the sale price of any property and the charge for any service taxable under this article..."

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Sales Tax

Section 1105 of the Tax Law provides, in part:
Sec. 1105. Imposition of sales tax.--... there is hereby imposed and shall be paid a tax ... upon:
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(c) The receipts from
following services:

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every

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sale,

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except

for

resale,

of

the

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(6) Providing parking, garaging or storing for motor vehicles by persons operating a garage (other than a garage which is part of premises occupied solely as a private one or two family dwelling), parking lot or other place of business engaged in providing parking, garaging or storing for motor vehicles provided, however, this paragraph shall not apply to such facilities owned and operated by a public corporation, as defined by section sixty-six of the general construction law, other than a public benefit corporation, as defined by such section sixty-six, created by interstate compact or at least half of whose members are appointed by the governor, or any agency or instrumentality of a municipal corporation or district corporation as defined by such section sixty-six... Part 566 of 8 NYCRR contains the regulations of the State University at Binghamton dealing with vehicular and pedestrian traffic and parking on the Binghamton campus. Section 566.3 of these regulations provides, in part: Campus registration of motor vehicles. (a) No vehicle may be operated or parked on the grounds of the university without a valid State registration and without displaying a current campus vehicle registration permit, as provided in this section, and upon payment of an annual vehicle registration fee as approved by the chancellor or his designee, unless the vehicle is not subject to such regulations.
*

*

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(f) Faculty and staff vehicles. Upon completion of the vehicle registration form and payment of the required fees, a vehicle registration permit is issued to faculty members and employees of the university, including but not limited to the affiliates of the Research Foundation, SUNY Foundation and those companies contracted to provide food, bookstore, vending and child care services who have fulfilled the conditions set forth in this subdivision.

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Sales Tax

(g) Student vehicles. All students are required to register motor vehicles annually with the university and must do so within the time designated for academic registration at the beginning of the fall term. Students who enter the university at the beginning of the spring or summer term must obtain a campus vehicle registration permit upon entering.... Section 566.5 of these regulations provides, in part: Parking regulations. (a) Vehicles may be parked on the campus only when displaying a current university parking permit, as provided in these rules and regulations and on payment of a university parking fee, approved as to amount, by the Chancellor, or a designee, unless the vehicle is not subject to such regulations and, if parked, is in a paid lot, at parking meters or in the parking garage.
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*

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(e) University parking permits must be displayed as the university indicates in vehicles parked on campus. The person to whom a parking permit is issued is responsible for any parking violations attributed to the parking permit. There is a fee for any replacement parking permit. Ownership of the parking permit is not transferable. Opinion The State University of New York at Binghamton is part of the State University of New York, a corporation created in the State Education Department and within the University of the State of New York, under the Board of Regents (Education Law, Section 352.1). The governing Board of Trustees is empowered to adopt and enforce campus rules relating to parking, vehicular and pedestrian traffic, and safety; including provisions for the payment of fees for the registration or parking of vehicles (Education Law, Section 360.1(c). As described by Petitioner, and pursuant to the above cited sections of Part 566 of 8 NYCRR, the vehicle registration fees and the parking related fees are two separate and distinct fees charged for two separate purposes, each covered by separate sections of Part 566 (Section 566.3 covers registration and Section 566.5 covers parking). The registration fees and parking fees are separately stated on Petitioner’s invoices, and Petitioner issues separate registration and parking permits. The registration confers no parking privileges. Also, according to Petitioner, the registration fees and the parking fees are two separate items for accounting and reporting purposes. The revenue generated by the registration fees goes to a separate account and is applied to

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the cost of paying staff who input data collected concerning the identification and owner of the vehicle. The revenue generated by the parking fees also goes to a separate account and is applied to costs directly related to the operation of and maintenance of the parking areas (paving, snow removal and security). Since the service of registering a motor vehicle is not specifically enumerated in Section 1105(c) of the Tax Law, the vehicle registration fees could only be found to be subject to sales tax if they are considered to be receipts attributable to providing parking, garaging or storing of motor vehicles which are taxable pursuant to Section 1105(c)(6) of such law. In describing the purpose of the general requirement of the State for all motor vehicles to be registered, New York Jurisprudence 2d (8 NY Jur 2d, Automobiles, §24, p. 82) states: "The underlying purpose of these provisions is to establish a uniform system of operation and use of motor vehicles, which will supervise vehicles, their movement and control, their identity in relation to the public, and any resultant damage or injury they may occasion." The purpose of Petitioner’s registration requirement as it applies to the confines of the campus of Petitioner, is similar to the purpose of the statewide registration requirement stated above. Petitioner’s registration requirements are separately authorized powers granted by the Legislature and, therefore, may properly be distinguished from its parking requirements. Accordingly, the vehicle registration fees described above are not considered receipts from parking, garaging or storing of motor vehicles and therefore are not subject to sales tax as it is imposed by Section 1105(c)(6) of the Tax Law.

DATED: February 2, 1998

NOTE:

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

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