New York Sales and Use Taxes explains taxpayer liability, the imposition of state sales and use tax on sales of both tangible personal property and services, and exemptions available to New York taxpayers. Written by a team of experts including Carolyn Joy Lee, with Jones Day, Debra Silverman Herman, with Roberts & Holland LLP, and Glenn Newman, President, New York City Tax Commission, this Portfolio begins with a detailed analysis of the imposition of sales tax and the imposition of use tax.  It defines the nature of sales tax, examines when and how it is used, and provides an enumerated list of taxable services.  It also examines what constitutes a use within New York, who is a “resident,” and which goods and services are subject to use tax. 

In addition, New York Sales and Use Taxes details the types of transactions, property, and services that are specifically exempt from tax and describes what entities are granted exempt status by the state. Because the U.S. Constitution limits New York's ability to impose tax, the Portfolio also explains when taxpayers have nexus with New York that allows the state to impose sales or use tax. This Portfolio also discusses taxation limits imposed on Internet sales. 

New York Sales and Use Taxes explains state administration of sales and use tax, including the duties and functions of the New York State Department of Taxation and Finance. This Portfolio also details a taxpayer's responsibility to collect and remit tax.

Working papers provided in this Portfolio include:

• Form ST-100, New York State and Local Quarterly Sales and Use Tax Return,
• Form ST-101, New York State and Local Annual Sales and Use Tax Return,
• Form ST-124, Certificate of Capital Improvement,
• Form AU-11, Application for Credit or Refund of Sales or Use Tax,
• Form AU-196.10, Notification of Sale, Transfer, or Assignment in Bulk,
• Form TP-153, Notice to Prospective Purchasers of a Business or Business Assets,
• Form DTF-17, Application for Registration as a Sales Tax Vendor,
• Form ST-120, Resale Certificate,
• Form ST-130, Purchaser's Report of Sales and Use Tax, and
• Form ST-131, Seller's Report of Sales Tax Due on a Casual Sale.

New York Sales and Use Taxes allows you to benefit from: 

• Hundreds of hours of original research on specific tax planning topics from leading practitioners in this area.
• Invaluable practice documents including tables, charts and lists.
• Plain-English guidance from world-class experts.
• Real-world and in-depth analysis that lets you explore various options.
• Time-saving access to relevant sections of tax laws, regulations, court cases, IRS documents and more.
• Alternative approaches to both common and unique tax scenarios.

This Portfolio is part of the Premier State Tax Library, a comprehensive series, which covers major state tax transactions and issues with expert, in-depth analysis, and offers commentary on a wide range of multi-state and state-specific taxation topics, including Sales and Use, Corporate Income, Individual Income, Property, Gross Receipts, Limitations on States' Authorities to Tax, Credits and Incentives, Electronic Commerce, Mergers and Acquisitions, Procedure and Administration, Special Industries, and more.

Detailed Analysis

2220.01. IMPOSITION OF SALES TAX

Introductory Material

A. Nature of Sales Tax

1. Transaction Tax

2. Destination Tax

3. Consumer Tax

B. Retail Sale of Tangible Personal Property

1. Retail Sale

a. Barters and Exchanges

b. Rentals, Leases, and Licenses to Use

(1) Sale-Leasebacks, Synthetic Leases, and Other Financing Transactions

(2) Special Rules Affecting Motor Vehicle, Vessel, and Noncommercial Aircraft Leases

(3) Taxable Equipment Rental vs. Nontaxable Transportation Service

(4) Passenger Car Rentals

(5) Reproduction Rights

c. Loss Protection Services

2. Tangible Personal Property

a. Taxable and Exempt Items Sold as a Single Unit

b. Precious Metals, Coins, and Currency

C. Receipt

1. Taxes Imposed on the Vendor

2. Taxes Imposed on the Consumer

3. Coupons

4. Discounts

5. Expenses

6. Trade-ins

7. Shipping and Delivery

8. Interest

9. Demurrage

10. Deposits

D. Certain Corporate and Partnership Transactions

E. Certain Utility Services

1. Gas and Electricity and Gas Service and Electric Service

a. Transmission, Transportation, and Delivery Charges

b. Use Tax

2. Refrigeration and Refrigeration Service

3. Telecommunications

a. Telephony, Telegraphy, Telephone, and Telegraph Services

b. Telephone Answering and Prepaid Calling Services

c. Mobile Telecommunications Service

4. Steam and Steam Service

F. Enumerated List of Taxable Services

1. Information Services

a. Personal Information Services

b. News Services

c. Advertising Services

d. Meteorological Services

2. Processing and Printing Services

3. Installation, Maintenance, and Repair Services

4. Storage of Tangible Personal Property

a. Storage vs. Lease of Real Property

b. Temporary In-Transit Storage

c. Vehicle Storage vs. Parking Service

5. Maintaining, Servicing, and Repairing Real Property

6. Garage/Parking for Motor Vehicles

7. Interior Decorating/Architect/Engineering Services

8. Security and Detective Services

9. Entertainment/Information Services Via Telephone

10. Transportation Services

G. Restaurant Sales of Alcoholic or Other Beverages or Food, and Taxable Sales of Food

1. Establishments Required to Collect § 1105(d) Tax

2. Taxable Consumption On and Off Premises

3. Taxable Sales of Food and Drink

4. Receipts Subject to Tax

H. Hotel Room/Transient Rental Occupancy Tax

1. Exempt Occupants

2. Nontaxable Occupancies

a. Place of Assembly

b. Nursing Homes and Rest Homes

c. Summer Camps

d. College Dormitories

e. Bungalows

f. Complimentary Occupancy

g. Employee Lodging

3. Food Service Offered by Hotels

4. Miscellaneous Hotel Transactions

I. Admission to Places of Amusement and Dues or Initiation Fees for Social and Athletic Clubs

1. Admission Charges

a. Place of Amusement

b. Dramatic and Musical Arts

c. Sporting Events

d. Admission Exemptions

2. Dues

a. Social and Athletic Clubs

b. Certain Exempt Dues and Initiation Fees

3. Charges of a Roof Garden/Cabaret

2220.02. IMPOSITION OF USE TAX

Introductory Material

A. Who is a Resident?

1. Individuals

2. Corporations

B. What Constitutes a Use Within New York?

C. Goods Subject to Use Tax

1. Tangible Personal Property Purchased at Retail

2. Tangible Personal Property Purchased for Resale

3. Tangible Personal Property Manufactured/Assembled by the User

a. Tangible Personal Property Regularly Offered for Sale by the User

b. Tangible Personal Property Used/Incorporated Into Structure or Real Property

4. Tangible Personal Property Upon Which Certain Services Are Performed

D. Services Subject to Use Tax

E. Refunds and Credits

2220.03. EXEMPTIONS FROM SALES AND USE TAX

Introductory Material

A. Exempt Transactions

1. Sales for Resale

2. Certain Partnership and Corporate Transactions

a. Capital Contributions to Corporations

b. Transfers to Newly Organized Corporations-Formation of a Corporation

c. Corporate Mergers and Consolidations

d. Transfers to Partnerships

e. Liquidations

f. Other Intercompany Transactions

3. Donations to Exempt Organizations

4. Industrial Development Agencies

5. Empire Zones

6. Like-Kind Exchanges

7. Sales at Private Residences-Garage Sales

8. Services on Property Delivered to Purchaser Outside the State

9. Vending Machine Sales

B. Exempt Property and Services

1. Advertising Services

2. Aircraft

a. Commercial Aircraft

b. Fuel and Fueling Services

3. Alarm Call Services

4. Broadcast Services and Machinery and Equipment

5. Capital Improvements

a. General Rules

b. Qualification as a Capital Improvement

(1) Substantially Adds to the Value of the Real Property or Appreciably Prolongs Its Useful Life

(2) Part of the Real Property or Permanently Affixed to the Real Property

(3) Intent to Become a Permanent Installation

(4) Examples

c. Exempt Organizations

d. Agency Contracts With Persons Other Than Exempt Organizations

e. Administrative and Procedural Rules

6. Clothing and Footwear and Services Performed Upon Clothing and Footwear

a. Clothing and Footwear

b. Laundering, Dry Cleaning, and Pressing Clothing and Other Non-Apparel Items, and Shoe Repairing and Shining, Tailoring, and Weaving Services

7. Computer Hardware and Software

a. Computer System Hardware

b. Computer Software

8. Drugs, Medicines, and Medical Equipment

a. Prosthetics

b. Guide, Hearing, and Service Dogs

9. Farming and Commercial Horse Boarding

10. Flags

11. Food and Beverages

a. Food

b. Beverages

c. Food Stamps

d. Sold by Senior Citizen Independent Housing Community

e. Sold to Airlines for In-Flight Consumption

f. Sold to Students in Student Cafeterias

12. Funeral Director, Mortician, and Undertaker Sales and Services

13. Internet

a. Access Services

b. Data Centers

c. Web Page Development

14. Mobile Homes

15. News

a. Collection and Dissemination of News Via Telephony and Telegraphy

b. Newspapers, Periodicals, and Shopping Papers

16. Packaging Materials

17. Precious Metals, Coins, and Currency

18. Promotional Materials

19. Property Used in the Production of Tangible Personal Property, Gas, Electricity, Refrigeration, and Steam

a. Machinery and Equipment

b. Tools, Supplies, and Parts With Useful Life of Less Than One Year

c. Utilities Consumed Exclusively in Production

d. Industries

(1) Broadcast

(2) Cable Television Systems

(3) Film

(4) Printing

(5) Telecommunications

(6) Theater

e. Pollution

20. Racehorses and Training Services

21. Research and Development Property and Utilities

22. Residential Heating and Energy Sources, Base Gas, and Similar Items

a. Residential Heating

b. Base Gas and Similar Items

23. Telephony and Telegraph Services

24. Textbooks to College Students

25. Vehicles

a. Alternative Fuel Vehicles

b. Tractors, Trailers, Semi-trailers, and Omnibuses

c. Motor Vehicles to Certain Related Parties

d. Motor Vehicles to Nonresident Purchasers

26. Vessels

a. Commercial Vessels

b. Fishing Vessels

c. Vessels to Nonresident Purchasers

27. Veterinarian Sales

28. Water

C. Use Tax Exemptions

1. Foreign Airlines

2. Paper Used in Newspapers and Periodicals

3. Property Converted or Incorporated Into Products for Sale

4. Property Purchased by User While Nonresident of New York

5. Property or Services Taxed in Other Jurisdictions

6. Racing Horses

7. Uses Prior to 1965 and Computer Software Use Prior to 1991

8. World's Fair

2220.04. EXEMPT PERSONS

Introductory Material

A. New York State and Its Agencies, Instrumentalities, Public Corporations, and Political Subdivisions

B. United States and Its Agencies and Instrumentalities

C. United Nations and Other International and Foreign Organizations

D. Charitable and Nonprofit Organizations

E. Armed Forces Posts and Organizations

F. Certain Indian Nations

G. Health Maintenance Organizations (HMO's)

H. Rural Electric Cooperatives

I. Admission Charges to Certain Sports/Entertainment Events; Exceptions for Athletic Games or Exhibitions

J. Exception for Carnivals and Rodeos

K. Other Exempt Admissions

L. General Exemption for Benefit Performances

2220.05. NEXUS AND OTHER LIMITATIONS ON TAXATION

A. Overview

B. The Due Process Clause and the Commerce Clause

1. Nexus

a. In re Orvis Company Inc./In re Vermont Information Processing Inc.

b. Independent Contractors

2. Determination of Vendor Status

C. Remote Commerce

1. Mail Order

2. Internet/E-Commerce

a. New York Electronic Commerce Taxation

b. Internet Tax Freedom Act

2220.06. ADMINISTRATION

A. State Department of Taxation and Finance

B. Local Options

1. Local Tax Rates

2. Local Taxes May be Imposed Notwithstanding the Inapplicability of the State Tax

C. Vendor Registration

1. Who Must Register

D. Trade Shows and Promoters

E. Required Records

F. Exemption Certificates

G. Capital Improvement Certificates

H. Statement of and Reference to Tax

I. Forms of Prohibited Advertising

J. Returns and Payment

K. Interest and Penalties

1. Interest

2. Failure to File Penalty

3. Substantial Underpayment Penalties and Interest

4. Penalties and Interest for Fraud

L. Refunds and Credits

1. Timeliness

2. Administrative Action

3. Canceled Sale, Returned Merchandise, and Bad Debts

4. Refunds and Credits Based on Proof of Nontaxable Use

5. Refunds and Credits for Bad Debts

a. What is "Uncollectible"?

b. Who Can Claim the Refund or Credit?

M. Persons Required to Collect the Tax

1. Personal Liability for Persons Under a "Duty to Act"

N. Bulk Sales

1. Notification

2. Purchaser's Liability

3. Hearings

4. Satisfaction of Tax Liability

5. Priority of State's Bulk Sale Lien

O. Purchaser's Liability

P. Returns

1. Monthly Filers

2. Quarterly Filers

3. Annual Filers

4. One-Time Filers

Q. Direct Payment Permits

R. Audits

1. Statistical Sampling

2. Extensions of Time to Assess

3. Overlapping Audit Policy

S. Protests

1. Conciliation Conferences

2. Division of Tax Appeals

a. ALJ Proceedings

b. Exception to the Tax Appeals Tribunal

3. Judicial Proceedings

T. Declaratory Judgment

U. Administrative Rulings and Opinions

1. Advisory Opinions

2. Tax Guidance Bulletins

3. Opinions of Counsel

4. Technical Services Bureau Memoranda

5. Declaratory Rulings

a. Authorization

b. Procedure

6. Judicial Review

V. Voluntary Disclosure and Amnesty Programs

Working Papers

Item Description Sheet

Worksheet 1 Form ST-100, New York State and Local Quarterly Sales and Use Tax Return

Worksheet 2 Form ST-101, New York State and Local Annual Sales and Use Tax Return

Worksheet 3 Form ST-124, Certificate of Capital Improvement

Worksheet 4 Form AU-11, Application for Credit of Refund of Sales or Use Tax

Worksheet 5 Form AU-196.10, Notification of Sale, Transfer, or Assignment in Bulk

Worksheet 6 Form TP-153, Notice to Prospective Purchasers of a Business or Business Assets

Worksheet 7 Form DTF-17, Application for Registration as a Sales Tax Vendor

Worksheet 8 Form ST-120, Resale Certificate

Worksheet 9 Form ST-130, Purchaser's Report of Sales and Use Tax

Worksheet 10 Form ST-131, Seller's Report of Sales Tax Due on a Casual Sale

Bibliography

Bibliography