What is Subject to Sales Tax in New York?

Sales tax in New York applies to retail sales of certain tangible personal property and services. Generally, sales of tangible personal property are subject to sales tax unless they are specifically exempt under the law. In contrast, sales of services are generally exempt from sales tax unless the law specifically states they are taxable. These rules can be very confusing which is why it is it is important to get good tax advice from the start so you file correctly and avoid an audit. However, if you make a mistake or fall behind on your payments and end up being audited, the consequences can be severe. It is best to contact a tax attorney in the event of a New York sales tax audit.

What Tangible Personal Property Is Subject to New York Sales Tax?

Tangible personal property is defined as “any kind of physical personal property that has a material existence and is perceptible to the human senses (in other words, something you can see and touch).”

Some examples of items that are taxable include:

• Furniture and appliances
• Certain types of clothing
• Motor vehicles and fuel
• Computers and pre-written software
• Certain grocery store items (e.g., soda, beer, cigarettes, candy, and bottled water)
• Building materials
• Tobacco products
• Artwork
• Animals and animal supplies
• Trees and plants

What Services Are Subject to New York Sales Tax?

There are a wide variety of services that are taxable in New York State. These include:

• Restaurant food and drink
• Utility and (intrastate) telecommunication services
• Telephone answering services, prepaid telephone calling services, mobile telecommunication services
• Certain information services
• Maintaining, installing, servicing, and repairing of tangible personal property or real property
• Storing tangible personal property except for certain rentals of mini-storage units that constitute the rental of real property
• Certain parking and garaging or storing of motor vehicles
• Interior decorating and design services
• Security and detective services
• Passenger transportation services with a driver using limousines, black cars, and certain other motor vehicles (not including taxi and bus services)
• Hotel occupancy
• Admission charges to a place of amusement

Note that New York City taxes additional services, such as hair service; tanning; manicures/pedicures; electrolysis; massage services; services provided by weight control and health salons, gymnasiums, Turkish and sauna baths, and similar facilities; and written or oral credit rating or reporting services.

Are There Other Requirements that Businesses Must Meet to Sell Taxable Goods and Services?

Businesses that are required to collect sales tax must register with the New York State Tax Department and obtain a Certificate of Authority. The Certificate of Authority gives the seller the authority to collect sales tax and issue and accept most New York State sales tax exemption certificates.

In addition, registered sales tax vendors are obligated to keep accurate records of all sales and purchases.

What Are the Consequences of Violating Sales Tax Laws?

Businesses that fail to comply with sales tax laws may be subject to liens, bank levies, seizure of the business, loss of their Certificate of Authority, personal liability, penalties, and other consequences. If you made a mistake in filing or collecting sales tax, are behind in paying the state or have been notified of an audit or collection action, a tax attorney can assist you in challenging the state’s action and/or negotiating a settlement.

Our tax lawyers have been helping businesses resolve their New York sales tax problems for over 25 years. Contact us today for a consultation.

To learn more about sales tax, visit our sales tax page and download our eBook.