Note: See also TP-64, Notice to Taxpayers Requesting

Note: See also TP-64, Notice to Taxpayers Requesting Information or Assistance from the Tax Department. The publication you requested begins on page 2 below. EFTA01129735 New York State Department of Taxation and Finance A GUIDE TO SALES TAX IN NEW YORK STATE Publication 750 (6/ID) EFTA01129736 This page intentionally left blank EFTA01129737 Publication 750 (6/10) About this publication This publication is a guide to New York State and local sales and use taxes for businesses that sell taxable tangible personal property, perform taxable services, receive amusement charges, or operate a hotel or motel, and restaurants, taverns, or other establishments that sell food and drink. It is the department's goal that all taxpayers meet their sales tax obligations and pay the correct amount of tax due. If your business makes sales of property or services that are subject to sales tax, it must register for sales tax purposes and obtain a Certificate of Authority. You should thoroughly read all the information contained in this publication so that you become aware of your obligations in regard to sales tax. If you fail to fulfill your obligations under the sales tax law, you could be subject to penalties and/or charged with a crime. Some of these obligations include, but are not limited to: • registering for sales tax purposes and displaying a Certificate of Authority (see page 12, How to obtain your Certificate of Authority); • collecting the proper amount of sales tax from customers (see page 25, Calculating and stating the sales tax); • issuing and accepting properly-completed sales tax exemption certificates (see page 30, Exemption certificates); • maintaining records of sales and purchases in an orderly and adequate manner (see Part III, Record keeping); • filing sales tax returns and remitting any sales tax due in a timely manner as a trustee for the State (see Part IV, Filing your sales tax return); • assuming personal liability for the payment of sales tax by certain responsible persons of a business; and • providing notice to the department 20 days prior to purchasing or acquiring business assets from a sales tax vendor, other than in the ordinary course of business (see Part VI, Purchasing or acquiring a business or its assets: Caution). Publication 900 Important Information for Business Owners, provides additional information on your responsibilities under the sales tax law. Obligation to register for sales tax purposes You are required to register for sales tax purposes with the Tax Department if the sales you make are subject to tax. You must be registered to issue or accept most exemption certificates and documents. The information contained in this publication is intended to help you decide whether or not you are required to register for sales tax purposes. As used in this publication and for purposes of the Tax Department's registration rules, the term vendor includes persons required to collect sales tax on sales and transactions described in Part II, Making sales. Also, when used in this publication, the terms sales, purchases, taxable sales, and taxable purchases, include, but are not limited to, where appropriate, the sale or purchase of the following: tangible personal property, certain services, rentals of hotel and motel rooms, admissions to places of amusement, and dues paid to social or athletic clubs. Note: See page 19, Sales by New York and United States governmental entities and certain exempt organizations, for information relating to sales by governmental entities and certain exempt organizations. 3 EFTA01129738 Publication 750 (6/10) Obligation to collect and remit tax Once you are registered for sales tax purposes, you are responsible for collecting and remitting both state and local sales taxes to the Tax Department, along with any use tax you may owe. If your business is an entity such as a corporation or a partnership, the responsibility for collecting and remitting sales tax extends to the responsible persons of the business. Therefore, certain owners, officers, directors, employees, partners or members (responsible persons) of a business can be held personally liable for the tax due owed by the business. As trustees for the state, a business and its responsible persons have an obligation to remit any sales tax that is due with timely filed sales tax returns. Failure to collect and remit sales tax can result in the imposition of penalties and interest. (See page 36, Filing your sales tax return.) Record keeping You must keep detailed records of every sale, the amount paid, charged, or due on the transaction, and the sales tax that is due, if any. Keeping good records of your business operation will help you prepare accurate and complete sales tax returns. (See Part III for more information on Record keeping and Tax Bulletin Record-Keeping Requirements for Sales Tax Vendors (TB-ST-770).) In addition to being required to register for sales tax purposes, you may also be subject to registration, collection, or payment requirements for other taxes. For a more detailed description of these taxes, see Publication 20, New York State Tax Guide For New Businesses. Additional information The department has recently posted new, plain language tax bulletins to its Web site. These web-based bulletins contain basic, easy-to-understand explanations of single subject sales tax topics. There are currently a number of tax bulletins on our Web site covering a variety of sales tax topics, and new bulletins will continue to be added to the department's Web site on a regular basis. The department continues to have available many general and industry-specific sales tax publications, as well as technical service memorandums, that provide additional detailed information on various sales tax topics. You can obtain any tax bulletin, publication, memoranda (TSB-M) or document referenced in this publication by visiting the Tax Department's Web site at ivww.nystax.gov or by contacting us directly. The department's Web site also allows you to receive timely notification of sales tax changes by subscribing to our e-mail subscription service. If you have any questions about sales and use tax, you may contact us by using the information provided in the Need help? section on the back cover of this publication. Note: A Publication is an informational document that addresses a particular topic of interest to taxpayers. Subsequent changes in the law and regulations, judicial decisions, Tax Appeals Tribunal decisions, or changes in Department policies could affect the validity of the information contained in a publication. Publications are updated regularly and are accurate on the date issued. 4 EFTA01129739 Publication 750 (6/10) Table of Contents Page Part I — Registration Who must be registered for sales tax purposes 7 Rules for out-of-state businesses 8 About your Certificate of Authority 9 Types of Certificates of Authority 10 How to obtain your Certificate of Authority 12 Denial of a Certificate of Authority 13 Taxpayers' Bill of Rights 13 New Jersey sales tax agreement 14 Registration rules for farmers 14 Registration rules for contractors 15 Registration rules for manufacturers 15 Part II — Making sales Taxable sales 16 Additional sales taxes and fees you may be required to collect 21 Sales taxes imposed only within New York City 22 Sales taxes imposed by certain school districts 24 Calculating and stating the sales tax 25 Exempt sales 28 Exempt sales — exemption certificate required 30 Exemption certificates 30 Exempt purchasers 31 Taxable business purchases 32 Part III — Record keeping Record-keeping rules 34 Part IV - Filing your sales tax return Filing requirements 36 Completing your sales and use tax return 39 Part V — Show and entertainment promoters Show promoters 40 Entertainment promoters 42 Part VI — Purchasing or acquiring a business or its assets: Caution Bulk sales transactions 44 Appendix — List of common sales tax forms 47 Need help Back cover 5 EFTA01129740 Publication 750 (6/10) 6 EFTA01129741 Publication 750 (6/10) Part I — Registration Who must be registered for sales tax purposes You must be registered for sales tax purposes with the Tax Department if you will be selling tangible personal property or services on which you are required to collect sales tax You must also be registered for sales tax purposes to issue or accept most New York State sales tax exemption certificates If you engage in business without obtaining a valid Certificate of Authority, you will be subject to a substantial penalty If you are changing your organizational structure, you must register for sales tax purposes as a new business If you will be selling property or services in New York State that are subject to sales tax, you may be required to collect the sales tax from the person to whom you make the sale. (The discussion on page 16 under Taxable sales will help you determine whether the sales you make are subject to sales tax.) In general, the sales tax you must collect and remit is computed using the combined state and local rate in effect in the locality where you deliver the taxable product or service to the customer. See pages 25 through 27 of this publication for information on the special rules for the calculation and collection of tax on sales of motor fuels, alternative fuels, motor vehicles, and certain boats. If you must collect sales tax on your sales, then you must register for sales tax purposes with the Tax Department and obtain a Certificate of Authority (see page 9 and Tax Bulletin flow to Register for New York State Saks Tax (TB-ST-360)). You must also be registered for sales tax purposes to issue or accept most New York State sales tax exemption documents. For example, even though wholesalers may never collect sales tax because all of their purchases and sales are for resale (and, therefore, are eligible for exemption from sales tax), they must still be registered to legally issue and accept most exemption documents. For additional information on who must be registered for sales tax purposes please see Tax Bulletin Do I Need to Register for Sales Tax? (TB-ST-175). If you are required to register for sales tax purposes but fail to do so and you engage in business without having obtained a valid Certificate of Authority, you will be subject to a penalty. The penalty is up to $500 for the first day business is conducted without having obtained a valid Certificate of Authority, plus up to $200 per day for each day thereafter. The maximum penalty for engaging in business without obtaining a valid Certificate of Authority is $10,000. If you change your organizational structure (for example, from a sole proprietorship to a corporation, a limited liability company, or a partnership), the new organization must register for sales tax purposes and obtain a new Certificate of Authority. The new business must obtain its own Certificate of Authority before it begins operating. You must also file a final return for your existing business and surrender the Certificate of Authority that was issued to the existing business. 7 EFTA01129742 Publication 750 (6/10) Purchasing, transferring, or assigning business assets If you are purchasing, transferring, or assigning either part or all of the assets of an existing business, there are specific rules that apply to the transaction (see Part VI on page 44). Rules for out-of-state businesses Even though you are located in another state, if you have customers in New York State, you may be considered a vendor for New York State sales tax purposes Even though you are located outside of New York State, if you have customers in New York State, and you have sufficient connection with New York State, you may be required to register for New York State and local sales tax purposes. For example, if you are located outside New York State, make sales of taxable products to persons within New York State, and regularly deliver the products in your trucks to your New York State customers, you have sufficient connection with New York State and must register for sales tax purposes and collect and remit sales tax. Also, if you solicit sales of taxable products or services through employees, salespersons, independent agents, or service representatives located in or who enter New York State, you must register for New York State sales tax purposes. If the only connection you have with New York State is the delivery of your products into the state by U.S. Postal Service or common carrier, you are not required to register or collect sales tax. Thus, some out-of-state businesses (including some mail order companies) may not have sufficient connection with New York State to be required to collect and remit sales tax. However, out-of-state sellers that make taxable sales of tangible personal property or services in New York are presumed to be sales tax vendors under certain conditions where they have agreements with New York residents to compensate them for referring potential customers to the seller. Also, under certain conditions, sellers of tangible personal property or services located outside of New York that have an affiliate located in New York may also be required to register to collect and remit sales tax. For more detailed information, see TSB-M-08(3)S New Presumption Applicable to Definition of Sales Tax Vendor, TSB-M-08(3.11S Additional Information on How Sellers May Rebut the New Presumption Applicable to the Definition of Sales Tax Vendor as Described in TSB-M-08(3)S, and TSB-M-09(3)S, Definition of a Sales Tax Vendor is Expanded to Include Out-of-State Sellers with Related Businesses in New York State. Although, as an out-of-state business, you may not be required to collect sales tax from your customers in New York State, your customers are still responsible for the payment of sales or use tax on their purchases. The use tax complements the sales tax. An example of when use tax applies is when a New York State resident purchases taxable products or services outside of New York State and then brings them or has them brought into New York 8 EFTA01129743 Publication 750 (6/10) State for use here. For more information, see Publication 774, Purchaser's Obligations to Pay Sales and Use Taxes Directly to the Tax Department: Questions and Answers. Although you may not have sufficient connection with New York State to require you to be registered, you may voluntarily register for sales tax purposes to collect and remit the sales tax that is otherwise due from the purchaser. You will then have the same obligations as vendors that are required to register with the Tax Department. If you are required to register for sales tax purposes, or if you voluntarily register, you must collect sales tax on all taxable sales delivered by you, or for you, to the purchaser, or the purchaser's designee, in this state. The tax due is the combined state and local rate in effect in the locality where the taxable product or service is delivered. For more information on registration rules for out-of-state businesses, see Tax Bulletin Do I Need to Register for Sales Tax? (TB-ST-1751. About your Certificate al Authority Your Certificate of Authority authorizes you to collect sales tax on your taxable sales and to issue and accept certain New York State sales tax exemption certificates You must prominently display your Certificate of Authority at your place of business Your Certificate of Authority authorizes you to collect sales tax on your taxable sales and to issue and accept certain New York State sales tax exemption certificates. You cannot legally make taxable sales or issue or accept many exemption documents until you have received your Certificate of Authority. Exemption certificates are forms that are filled out by a purchaser and given to the seller, so that the seller has a record of why sales tax was not required to be collected on the sale to which the certificate relates. Once you receive your Certificate of Authority, you are considered to be in business for sales tax purposes even if you never make a sale or never open the doors of your establishment. Therefore, it is important that you file your sales tax returns on time, even if you did not have any taxable sales during the reporting period, to avoid being subject to penalties for not filing. You must prominently display your Certificate of Authority at your place of business. If you have no permanent physical location, you can attach it to your truck, cart, wagon, stand, or other vehicle or facility from which you conduct business. You are subject to a $50 penalty if you fail to properly display your Certificate ofAuthority. If you have more than one place of business, you must display a Certificate of Authority at each place of business. You may not use photocopies of a Certificate of Authority but may request a separate certificate for each location from the Tax Department. See How to obtain your Certificate of 9 EFTA01129744 Publication 750 (6/10) Authority on page 12 for more information on applying for a Certificate of Authority when you have multiple business locations. If you have already received your Certificate of Authority, but need a duplicate copy because the original was lost or destroyed, you may contact us and request a duplicate original. Your Certificate of Authority is not transferable You cease doing business? Your Certificate of Authority is not transferable or assignable. If you buy an ongoing business, you must apply for your own certificate. (See Part VI on page 44 for additional information on the rules regarding the purchase, transfer, or assignment of a business.) If you sell, transfer, or assign your business or cease doing business, you must surrender your Certificate of Authority to the Tax Department. Although your Certificate of Authority is not transferable or assignable, it may be amended to account for changes in the address of the business or business name. If you need to change your sales tax address you can do so by visiting our Web site or by contacting us directly. You can also use Form DTF-96 Report of Address Change for Business Tax Accounts. Form DTF-95 Business Tax Account Update, can be used to provide the Tax Department with information regarding address changes, telephone number changes, and certain changes in business activities. Some changes in business activities may be processed by contacting us directly. Note: The department has instituted a sales tax vendor re-registration program for all registered vendors. You will receive a notice from the department when you are required to renew your sales tax Certificate of Authority. Also, see TSB-M-08(9)S Summary of the 2008 Sales and Use Tax Budget Legislation. For more information about the sales tax Certificate of Authority renewal program visit our Web site at www.rivstax.gov. If you cease doing business, your Certificate of Authority must be returned to the department along with a "final" sales tax return for the business within 20 days of terminating the business. Special rules apply if you Web File a "final" sales tax return. Visit the Online Services section of our Web site for more information. Also, see Tax Bulletin Filing a Final Sales Tax Return (TB-ST-265). Types of Certificates of Authority The Tax Department issues two types of Certificates of Authority for sales tax purposes The Tax Department issues two types of Certificates of Authority for sales tax purposes: • regular • temporary 10 EFTA01129745 Publication 750 (6/10) The type of Certificate of Authority you apply for should be based on the anticipated duration of your business activities. Note: The department will no longer issue the Certificate of Authority for Show and Entertainment Vendors. If you make sales at shows or entertainment events, such as flea markets, craft shows, antique shows, fairs, and similar shows you should apply for a regular Certificate of Authority. See TSB-M-08(111S, Changes Regarding the issuance of Certificates of Authority to Show and Entertainment Vendors, for more information. Regular Certificate of Authority You should apply for a regular Certificate of Authority if you will be making ongoing taxable sales from your home, a shop, a store, a cart, a stand, or any other facility or facilities from which you regularly conduct your business. It does not matter whether you own or rent the facility. You must apply for a regular Certificate of Authority at least 20 days before you begin operating your business in New York State. (See How to obtain your Certificate of Authority on page 12.) Temporal-) You may apply for a temporary Certificate of Authority if you expect to Certificate of make taxable sales in New York State for no more than two consecutive Authority quarterly sales tax periods in any 12-month period. In determining whether you meet this requirement, keep in mind that the sales tax quarters are: March I through May 31, June 1 through August 31, September I through November 30, and December 1 through February 28 (February 29 in a leap year). Show and entertainment vendors may not apply for a temporary Certificate of Authority; they must apply for a regular Certificate of Authority. However, even if you are eligible to obtain a temporary Certificate of Authority, it may be to your benefit to apply for a regular Certificate of Authority. That is because a temporary Certificate of Authority is good only for the two consecutive quarterly sales tax periods listed on your application and on your temporary Certificate of Authority. In addition, if you operate the same business or another business during the next 12-month period, you must again apply for a new temporary Certificate of Authority at least 20 days before you resume doing business. Example: You sell Christmas trees in November and December, and your taxable sales consist only of sales during this period. Accordingly, you are eligible to apply for a temporary Certificate of Authority. However, if you intend to conduct this type of business activity every year, you may wish to apply for a regular Certificate of Authority. This could be to your benefit because you would not have to apply every year for a new temporary Certificate of Authority, as the regular 11 EFTA01129746 Publication 750 (MO) Certificate of Authority would continue to be in effect until you indicate that you are no longer doing business by filing a final return. However, once you receive a regular Certificate of Authority you must file sales and use tax returns even if you have no sales tax liability. Also, even if you file a final return, and subsequently change your plans, you may apply for reactivation of your regular Certificate of Authority simply by contacting us directly (as long as it is within one year of deactivation). Example: You have no consistent year-to-year sales activity in New York State. However, in 2007 you intend to sell costume jewelry from a kiosk in the common area of a mall from October through December. This will be your only business activity in New York State in 2007 and you do not intend to sell in New York State in 2008. You should apply for a temporary Certificate of Authority. Example: You intend to sell crafts at a farmers' market for seven months, from the beginning of April through the end of October. This seven-month period covers three consecutive quarterly sales tax periods: March through May, June through August, and September through November. You may not apply for a temporary Certificate of Authority. You must apply for a regular Certificate of Authority. If you qualify to apply for a temporary Certificate of Authority, you must apply for it at least 20 days before you begin operating your business. (See below, How to obtain your Certificate of Authority.) How to obtain your Certificate of Authority You must apply for a Certificate of Authority at least 20 days before you begin business You must apply for a Certificate of Authority at least 20 days before you begin operating your business. You may apply online, by visiting the Online Permit As.' ance and Licensing (OPAL) Web site at Applying online is the fastest and easiest way to obtain your certificate. You may also apply by filling out Form DTF-17, Application to Register for a Sales Tax Certificate of Authority, and sending it to the address listed in the instructions for that form, at least 20 days before you begin operating your business. If you need to file the paper version of the application, you may obtain a copy of the form from the Tax Department's Web site or by contacting us. See, the Need help? section on the back cover of this publication. Upon receipt of your online or paper application, the Tax Department will review your application. If your application is approved, we will mail you a Certificate of Authority. You cannot legally make taxable sales or issue or accept most exemption certificates until you have received your Certificate of Authority. If you listed several places of business on your online 12 EFTA01129747 Publication 750 (6/10) application or Form DTF-17-NIT, Schedule of Business Locations For a Consolidated Filer, the Tax Department will provide you with a separate Certificate of Authority for each location. Denial of a Certificate of Authority The Tax Department may deny your request for a Certificate of Authority Within 30 days of receiving notice that your application for a Certificate of Authority has been denied, you may file either a request for a conference, or a petition for a hearing The Tax Department may deny your request for a Certificate of Authority under certain circumstances. For example, if any tax imposed under the Tax Law has been finally determined to be due from you and that tax liability has not been paid, your application for a Certificate of Authority may be denied. Remember that you cannot legally make taxable sales or issue or accept most New York State exemption certificates until you receive a Certificate of Authority. See page 7 for information regarding the penalties imposed for engaging in business without first receiving a Certificate of Authority. If your timely and complete application for a Certificate of Authority is denied, we will send you a Notice of Proposed Refusal to Register by certified mail within five days of the date we receive your application. The Notice of Proposed Refusal to Register will state the basis for the proposed refusal. If you believe that the Tax Department has made a mistake, you should file a request for a conference with the Bureau of Conciliation and Mediation Services, or file a petition for a hearing with the Division of Tax Appeals. You must file the application for a conference or hearing within 30 days of receipt of the Notice of Proposed Refit-sal to Register; otherwise the Notice of Proposed Refusal to Register becomes final. Once the Notice of Proposed Refit-sal to Register becomes final, you are prohibited from engaging in any business in New York State for which a Certificate of Authority is required. Taxpayers' Bill of Rights The Taxpayers' Bill of Rights requires the Tax Department to advise you, in writing, of your rights to appeal a departmental decision New York State has a Taxpayers' Bill of Rights that enhances and formalizes your rights as a New York State taxpayer. In part, the Bill of Rights requires the Tax Department to advise you, in writing, of your rights to appeal a departmental decision. For more information on your rights, see Publication 38 Your Rights as a Taxpayer, or contact us. 13 EFTA01129748 Publication 750 (6/10) New Jersey sales tax agreement Simplified sales tax reporting program between New York State and the State of New Jersey Registering for the program A simplified sales tax reporting program is part of an agreement entered into between New York State and the State of New Jersey. Under the simplified tax reporting program, New York State vendors who have no business location in New Jersey, but who make taxable sales of tangible personal property or services that are delivered to persons in New Jersey, may collect the New Jersey sales tax due on those sales. The simplified tax reporting program also allows New Jersey vendors who have no business location in New York, but who make taxable sales of tangible personal property or services that are delivered to persons in New York, to collect New York State sales tax due on those sales. The agreement between the states also permits the states to actively exchange sales and use tax information. Vendors who participate in the program register with both their home state, and the state for which they wish to collect sales tax. The vendor files a single sales tax return with the home state, along with a combined payment of all sales taxes collected and a breakdown of how much tax was collected on behalf of each state. The home state will, on the vendor's behalf, send the taxes due the other state to the other state. For more information on registering for the New Jersey program, see Publication 32, New Jersey/ New York Cooperative Interstate Sales and Use Tax Administration, (New Jersey). Note: The reciprocal sales tax agreement between the State of Connecticut and the State of New York has been terminated. However, the exchange of sales and use tax information remains in effect. For more detailed information relating to the changes as a result of the termination, see Important Notice, N-09-16 Important Information for Participants in the Connecticut/New York State Simplified Sales and Use Tax Reporting Program. Registration rules for farmers Farmers are not required to register for sales tax purposes unless they make sales that are subject to sales tax A farmer is not required to register for sales tax purposes if the only sales the farmer makes are sales of food and food products that are exempt from tax. For example, if a fanner sells fruits, vegetables, baked goods, jellies, jams, and preserves at a roadside stand, the farmer will not be required to register. In addition, Form ST-17% Fanner's and Commercial Horse Boarding Operator's Exemption Certificate, can be issued by farmers to make purchases exempt from the payment of sales tax when purchasing certain goods and services used predominantly (more than 50%) in farm production, even though the farmer is not registered for sales tax purposes. 14 EFTA01129749 Publication 750 (6/10) However, if a fanner sells taxable tangible personal property such as hay, livestock, plants, shrubs, trees, homemade crafts, or items such as candy and other confections, or sells food or drink for consumption on the premises where sold, then the fanner must register for sales tax purposes and collect sales tax on sales of taxable tangible personal property and services, or taxable food and drink. Registration rules for contractors A contractor is not required to register for sales tax purposes if the contractor only contracts or subcontracts to do capital improvements. See Publication 862 Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property, for more information on the application of the sales tax law to contractors and the definition of capital improvement. Contractors must register for sales tax purposes if the sales they make are subject to tax or to issue certain exemption documents A contractor is required to be registered for sales tax purposes if the contractor will make sales that are subject to sales tax. For example, if a construction contractor makes repairs such as repairing a roof or a leaking pipe, the contractor must register for sales tax purposes. A contractor must also register for sales tax purposes if the contractor will be issuing an exemption document to make certain specific purchases exempt from sales tax (such as a purchase of tangible personal property that is installed into real property owned by an exempt organization). Registration rules for manufacturers Manufacturers must register for sales tax purposes if the sales they make are subject to tax or to issue or accept most exemption documents As used in this section, the term manufacturer means and includes manufacturers, processors, generators, assemblers, refiners, miners, and extractors. A manufacturer may purchase raw materials and certain machinery, equipment, parts, tools, supplies and related services exempt from sales tax. In order to make these purchases exempt from sales tax and issue the appropriate exemption documents, a manufacturer is required to be registered for sales tax purposes. Moreover, a manufacturer must also register for sales tax purposes to accept a resale certificate from its customer. See Publication 852, Sales Tax Information for Manufacturers, Processors, Generators, Assemblers, Refiners, Miners and Extractors, and Other Producers of Goods and Merchandise, for more information. 15 EFTA01129750 Publication 750 (6/10) Part II — Making sales Taxable sales The following products and services are subject to sales tax when delivered in New York State, unless specifically exempted or excluded. This list is intended to provide general guidelines of the types of sales that are subject to tax and is not an all-inclusive list. If your business will be making sales of any of these types of products or services, you are required to register for sales tax purposes and obtain a valid Certificate of Authority prior to doing business in New York State. For further information regarding products and services subject to sales tax, see Tax Bulletin Quick Reference Guide for Taxable and Exempt Property and Services (TB-ST-7401. Items and services Generally, the sales tax is imposed on: subject to tax • retail sales of tangible personal property; unless specifically exempted in the law; • sales of certain services (see page 18); • sales of gas, electricity, refrigeration, and steam (utilities); • sales of gas, electric, refrigeration and steam service (utilities); • sales of telephony and telegraphy; • sales of telephone and telegraph service (including telephone answering services, facsimile transmission services, and mobile telecommunications services); • sales of food and drink for on-premises consumption, for example, when sold by restaurants and taverns; • sales of food and drink when sold by caterers; • sales of sandwiches and heated food; • rent for occupancy of hotel or motel rooms (including bed and breakfasts, boarding houses, guest houses, etc.). For more information see Publication 848 A Guide To Sales Tax For Hotel And Motel Operators; 16 EFTA01129751 Publication 750 (6/10) • admission charges to places of amusement, other than live dramatic or musical arts performances, motion picture theaters, sporting facilities or activities in which the patron is the participant, live circus performances, or charges which are taxed under any other law of this state, such as for admissions to race tracks, boxing, sparring or wrestling matches or exhibitions; Note: 75% of admission charges to qualifying places of amusement are exempted from the imposition of sales tax. (See TSB-M-O6(12)S Summary of the 2006 Budget Legislation Relating to Sales Taxes, and TSB-M-O4(7)S Exemption from Sales Taxes on 75% of the Admission Charge to a Qualifying Place of Amusement.) • dues, including initiation or membership fees, paid to social or athletic clubs when the combined dues and fees are more than $1O per year; and, • the charges of a roof garden, cabaret, or other similar place. Note: When certain conditions are met, a portion of the charges made by a roof garden, cabaret, or other similar place for admission to see a dramatic or musical arts performance is exempt from sales tax. (See TSB-M-O6(15)S Supplemental Summary of Recently Enacted Legislation Affecting Sales and Use Taxes Effective in 2006.) For sales tax purposes, the term sale includes a sale, a lease, rental, exchange or barter, and license to use or consume. For computer software, the term sale also includes the right to reproduce the software. Sales of tangible personal property The term tangible personal property means physical personal property, of any nature, that has a material existence and is perceptible to the human senses. Tangible personal property includes a variety of goods. Examples of taxable sales of tangible personal property include, but are not limited to, sales of: • furniture, appliances, and lighting fixtures; • certain clothing and footwear;* • machinery and equipment, parts, tools, and supplies; • computers; • prewritten (canned/off-the-shelf/standard) computer software (whether transferred by CD-ROM, Internet download, remote access, etc.); • motor vehicles; • boats and yachts; 17 EFTA01129752 Publication 750 (6/10) • fuels (for example, gasoline, diesel fuel, and kero-jet fuel); • candy and confections; • bottled water; • soda and beer; • cigarettes and tobacco products; • cosmetics and toiletries; • jewelry; • artistic items such as sketches, paintings, and photographs; • animals (for example, dogs, cats, or pet birds); • food and supplies for animals; • trees, shrubs, plants, and seeds; • coins and other monetary items, when purchased for purposes other than for use as a medium of exchange; • building materials; and • prepaid telephone calling cards. * If you sell clothing or footwear Publication 718-C, Local Sales and Use Tax Rates on Clothing and Footwear, lists the most up-to-date information concerning the applicable tax rates to charge your customers. Services subject to Only certain services are subject to tax. These services include: tax • providing certain information services; • producing, fabricating, processing, printing or imprinting tangible personal property furnished by a customer who does not intend to resell it (for example, when an individual purchases lumber and has a cabinetmaker construct a bookcase for him or her); • installing, maintaining, servicing, or repairing tangible personal property that is not held for sale by the purchaser of the service in the regular course of business (for example, servicing automobiles, repairing appliances, and repairing radio and television sets); 18 EFTA01129753 Publication 750 (6/10) • storing tangible personal property that is not being held for sale (for example, storing a customer's fur coat or providing storage for a customer's household goods); • renting safe deposit boxes; • maintaining, servicing, or repairing real property, both inside and outside buildings (for example, cleaning, painting, gardening, snowplowing, trash removal, and general repairs); • providing parking, garaging, or storage services for motor vehicles;* • interior decorating and design services; • protective or detective services; • entertainment or information services provided by means of telephone or telegraph (for example, 800 or 900 numbers); and • passenger transportation services with a driver, using limousines, black cars, and certain other motor vehicles (not including taxi and bus services). (See TSB-M-09(2)S Sales Tax Imposed on Certain Transportation Services, and TSB-M-09(7)S Additional Guidance Relating to Sales Tax on Certain Transportation Services.) * See TSB-M-08(14)S, Sales Tax Treatment of a Lease or Rental of Real Property for the Purpose of Parking, Garaging, or Storage of Motor Vehicles, for information on what constitutes a non-taxable lease of real property for parking. Sales by New York and United States governmental entities and certain exempt organizations The Tax Law provides a general exemption from sales tax for sales made by the following: • New York State or any of its agencies, instrumentalities, public corporations, or political subdivisions (New York governmental entity); • the United States and its agencies and instrumentalities (United States governmental entity); • the United Nations or any international organization of which the United States is a member (United Nations or any international organization); • certain not-for-profit organizations, (such as religious, charitable, scientific, testing for public safety, literary or educational, or to foster national or international sports competition); 19 EFTA01129754 Publication 750 (6/10) • certain posts or organizations consisting of past or present members of the armed forces of the United States, and qualifying auxiliary units of such posts or organizations; and • certain Indian nations or tribes residing in New York. However, there are some exceptions to this general rule for sales made by governmental entities and other exempt organizations. The sales described below, when made in the manner indicated by either a governmental entity or other exempt organization, are subject to sales and use taxes. This list is intended to provide general guidance and is not meant to be an all-inclusive list. If an exempt organization or governmental entity engages in sales of these types of products or services, it is required to register for sales tax purposes and obtain a valid Certificate of Authority prior to conducting business in New York State (see page 12). Generally, sales and use taxes are imposed on: • tangible personal property or services sold by New York or United States governmental entities and certain sales by the United Nations or any international organization, if the property or services are similar to those ordinarily sold by private persons; • tangible personal property sold by any shop or store* operated by certain not-for-profit organizations; posts or organizations of past or present members of the armed forces, and qualifying auxiliary units; or certain Indian nations or tribes residing in New York; • tangible personal property or services sold by a rural electric cooperative corporation, unless the purchaser is an exempt organization; • food or drink sold in or by a restaurant or tavern operated by a New York governmental entity; certain not-for-profit organizations; posts or organizations of past or present members of the armed forces and qualifying auxiliary units; or certain Indian nations or tribes residing in New York; • under certain circumstances, rent for hotel occupancy received by certain not-for-profit organizations (see Publication 848, A Guide To Sales Tax For Hotel And Motel Operators); and • certain motor vehicle parking, garaging, or storage services by certain not-for-profit organizations and posts or organizations of past or present members of the armed forces, and qualifying auxiliary units. * A shop or store is any place or establishment where goods are sold from display with a degree of regularity, frequency, and continuity as well as any 20 EFTA01129755 Publication 750 (6/10) place where sales are made through a temporary shop or store located on the same premises as persons required to collect tax. Beginning September 1, 2008, certain not-for-profit organizations; certain posts or organizations of past or present members of the armed forces, and qualifying auxiliary units; and certain Indian nations or tribes residing in New York, are required to collect state and local sales tax on their retail sales of the following property and on their sales, other than for resale, of the following services: • any lease or rental of tangible personal property; • any utility service described in section 1105(6) of the Tax Law; • any service to real property described in section 1105(c)(5) of the Tax Law; and • any tangible personal property where the sale is made by remote means, such as by telephone, mail order (including email), over the Internet, or by other similar methods, provided the exempt organization makes such sales with a degree of regularity, frequency, or continuity. Beginning January 1, 2009, certain not-for-profit organizations; posts or organizations of past or present members of the armed forces, and qualifying auxiliary units; and certain Indian nations or tribes residing in New York are also required to collect state and local sales and use tax on certain remote and auction sales. The sales described above are subject to tax whether or not they are made from a shop or store. For more information on sales by certain exempt organizations, see Publication 843, A Guide to Sales Tax in New York State for Exempt Organizations. Also see TSB-M-08(5)S Tax Law Amendments Related to Sales Made by Certain Sales Tax Exempt Organizations Effective September 1, 2008, and TSB-M-08(15)S, Regulatory Amendments Related to Sales Made by Certain Sales Tax Exempt Organizations — Effective January 1, 2009. For information on purchases made by governmental entities and certain exempt organizations, see Exempt purchasers on page 31. Additional sales taxes and fees you may be required to collect Passenger car An additional 6% statewide special tax is imposed on the short-term rental rentals of a passenger car rented within New York State, or rented outside New York State for use within New York State. Short term rental means 21 EFTA01129756 Publication 750 (6/10) any rental for less than one year. This tax is in addition to the applicable state and local sales and use taxes. Also, a special 5% supplemental tax is imposed on the short-term rental of passenger cars within the Metropolitan Commuter Transportation District (MCTD).* The special supplemental tax is in addition to the applicable state and local sales and use taxes and the statewide special tax. See TSB-M-09(1)S, Increase in the Special Tax on the Rental of Passenger Cars, and TSB-M-09(6)S, Special Supplemental Tax on the Rental of Passenger Cars Within the Metropolitan Commuter Transportation District, for more information. * The MCTD consists of New York City (Bronx, Kings, New York, Queens, and Richmond counties) and the counties of Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester. Entertainment or information services Parking services sold in New York City Fee on hotel occupancy in New York City An additional 5% sales tax is imposed on entertainment or information services provided by means of telephone that are received in an exclusively aural manner by the customer (for example, 800 or 900 numbers). Charges for parking services in New York City are subject to a higher rate of tax than most other sales. If you sell parking services in the borough of Manhattan (New York County), those sales are subject to the 8% additional parking tax imposed on parking services within that borough. Under certain circumstances, an individual resident of Manhattan is exempt from this 8% tax. See TSB-M-85(14)S, 1985 Legislation - Chapter 330 Exemption From New York City Additional Tax On Parking, Garaging and Storing of Motor Vehicles, and TSB-M-96(131S Change in the New York City Parking Tax Exemption for Manhattan Residents, for more information about the exemption afforded Manhattan residents. An additional hotel unit fee in the amount of $1.50 per unit, per day, is imposed on every occupancy of a unit in a hotel located within New York City (Bronx, Kings, New York, Queens, and Richmond counties). See TSB-M-05(21S Fee on Hotel Occupancy in New York City, for additional information on this hotel unit fee. Sales taxes imposed only within New York City Sales tax is imposed on certain services that are performed or delivered within New York City New York City local sales tax is imposed only within New York City on the following services performed or delivered in the city: • written or oral credit rating services; • oral credit reporting services not delivered by telephone; 22 EFTA01129757 Publication 750 (6/10) • beautician, barbering, and hair restoring services; • tanning services; • manicure and pedicure services; • electrolysis; • massage services; and • the sale of the services of transporting, transmitting, distributing, or delivering gas or electricity, when purchased from someone other than the vendor of the gas or electricity. (See Important Notice, N-09- 12 Sales Tax Law Changes in New York City — Effective August 1, 2009.) In addition, the New York City local sales tax is imposed on every sale of services by: • weight control and health salons; • gymnasiums; • Turkish and sauna baths and similar establishments; and • every charge for the use of such facilities. Sales of these services are subject to sales tax only when the services are performed or delivered to customers within New York City. However, charges for services rendered by the following are not subject to the local New York City sales tax: • physicians; • osteopaths; • dentists; • nurses; • physiotherapists; • chiropractors; • podiatrists; • optometrists; and 23 EFTA01129758 Publication 750 (6/10) • ophthalmic dispensers; or • a person performing similar services licensed under title VIII of the New York State Education Law, and excluding those services when performed on pets and other animals. Note: The services described above are not subject to New York State sales tax, including the MCTD tax, or to any local sales taxes imposed elsewhere in th