N.Y. Comp. Codes R. & Regs. tit. 20 § 529.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 529.2 - New York State, agencies, instrumentalities, public corporations, and political subdivisions thereof

Tax Law, § 1116(a)(1)

(a)Governmental entities.

(1)Agencies and instrumentalities of the State as used in this section means any authority, commission or independent board created by an act of the Legislature for a public purpose.

(2)A public corporation as used in this section means any corporation created by an act of the Legislature for a public purpose or pursuant to an agreement or compact with another state or Canada.

Example:

Urban Development Corporations and Industrial Development Agencies are public corporations and may purchase tangible personal property exempt from the sales and use taxes.

Cross-reference:

For contracts with exempt organizations, see Part 541 of this Title.

(3)A political subdivision as used in this section means a county, town, city, village, school district, fire district, special district corporation and board of cooperative educational services of this State.

(b)As purchaser.

(1) New York State, or any of its agencies, instrumentalities, public corporations or political subdivisions (hereinafter referred to as New York State governmental entities) are not subject to sales or use tax when they are the purchaser, user, or consumer of tangible personal property or services or when they are the occupant of a hotel room or a patron at a place of amusement, club, roof garden, cabaret or other similar places.

(2) New York State governmental entities as purchasers, users, consumers, occupants or patrons must exercise their right to exemption through the issuance of governmental purchase orders or the appropriate exemption document.

(c)As vendor.

(1) Sales by New York State governmental entities of tangible personal property or services of a kind not ordinarily sold by private persons are exempt from sales and use tax.

Example 1:

A county clerk sells tax maps, copies of ordinances and certified copies of documents. The sale of these items is not taxable.

Example 2:

A governmental entity sells evergreen seedlings in bundles of 1,000 to qualified landowners with the stipulation that once the evergreens are planted they may not be removed with roots attached nor may they be planted for ornamental purposes. The sale of the seedlings is not taxable, because the sales are of a kind not ordinarily sold by private persons.

(2) Sales by New York State governmental entities of tangible personal property or services of a kind which are ordinarily sold by private persons, except trash removal services as described in paragraph (3) of this subdivision, are subject to the sales and use tax. See section 527.7(d), relating to municipal services, of this Title.

Example 3:

If in example 2 of the governmental entity were to have sold trees and decorative shrubs without any restrictions, the governmental entity would have been required to collect the sales tax since these sales are of a kind that are ordinarily sold by private persons.

Example 4:

A New York State governmental entity sells surplus vehicles at an auction. The receipts from these sales are subject to the sales and use tax.

Example 5:

A municipality removes snow from sidewalks and charges the property owner for the service. The services are performed in accordance with an ordinance. The charges are taxable.

Example 6:

A municipality sells electricity to its residents. The sale is taxable.

Example 7:

A public high school contracts with a photographer to photograph the graduating class. The photographer sells all the photographs to the school. The school will sell the photographs to the students. The sale of the photographs to the students is of a kind ordinarily sold by private persons and the receipts are subject to tax.

Example 8:

A governmental entity operates a hotel that is open to the general public. The charge for occupancy is subject to tax.

Example 9:

A governmental agency operates a restaurant. The charges for the food and drink are subject to tax.

(3) Receipts from the service of trash removal are exempt from the tax imposed on such service when the service is performed by a municipal corporation of this State, other than a city of one million or more, or when such services are rendered on behalf of a municipal corporation pursuant to an agreement.

Example 10:

A municipality provides a trash removal service for its residents and charges $2 per month per family for the service. This charge is not taxable.

Example 11:

A trash removal company has an agreement with a municipality for the removal, on behalf of the municipality, of its residents' trash. Under the terms of the agreement, the trash removal company bills the residents directly. The charge for this service is not subject to tax.

(4) Failure by a New York State governmental entity to collect sales tax on transactions which are subject to tax does not relieve the purchaser from the payment of tax. The purchaser must pay the tax directly to the Department of Taxation and Finance. See Part 532 of this Title.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 529.2