N.Y. Comp. Codes R. & Regs. Tit. 20 § 527.7 - Maintaining, servicing or repairing real property
Tax Law, § 1105(c)(5)
Example 1:
The replacement of broken windows is a repair to real property, which is taxable.
Example 2:
Company A enters into an agreement to provide periodic maintenance services on elevators and escalators belonging to its customers. The contract provides for inspection, lubrication and the performance of necessary repairs. These services are taxable as maintaining, servicing of real property which is subject to the sales tax.
Example 3:
A carting firm picks up trash and garbage at its customers' premises and dumps the materials at sites away from its customers' premises. Receipts from the sale of this service are taxable.
Example 4:
A contractor who is erecting a building engages a carter to haul away the debris resulting from the construction activities. The amounts paid to the carter are not taxable.
Example 5:
A contractor enters into an agreement with a farmer to demolish an old farm structure and haul away the resulting debris. The charge for demolition and debris removal is not subject to the tax.
Example 6:
The periodic repainting of a building is not a capital improvement. The customer pays tax on the service. The painter pays tax on the materials he used for painting, subject to a right of refund or credit.
Example 7:
A landscaping company enters into a contract to mow a customer's lawn on a regular basis; re-seed in the spring and fall and fertilize as needed. The total charge to the customer for labor and materials is taxable as maintenance, and the tax paid by the company on materials used in performing the service which become part of the property serviced may be claimed as a credit or refund.
Example 8:
A customer has a maintenance contract with a heating and air conditioning company to supply all parts and emergency services for his heating and air conditioning system for one year for a set fee. The cost of the contract is taxable, whether or not any services or parts are actually furnished, as it is a contract for maintenance of real property. The company may apply for a refund or credit of any tax paid on parts purchased for use under the contract which become part of the property serviced for resale, or are transferred to the purchaser in performance of the service.
Example 9:
The replacement of some shingles or patching of a roof is a repair, but a new asphalt shingle roof is a capital improvement.
Example 10:
A contractor sells and installs an above-ground swimming pool. The pool consists of a vinyl liner supported by an aluminum and wood frame which rests on the ground and a wood and metal deck. The vinyl liner rests on a bed of sand to prevent damage. The deep end (hopper) of the pool is set approximately two feet into the ground. The pool may be dismantled and moved without substantially damaging the real property. The installation of this pool is not a capital improvement, as it may be dismantled and moved without substantial injury to the land, there is no intent that it become a permanent installation and it has not become affixed so that it has become part of the real property. Therefore, the charges for the sale and installation of the pool are subject to the tax.
Cross reference:
For special rules concerning the imposition and computation of the compensating use tax owed by a manufacturer who incorporates its own product into real property to the specifications of a capital improvement, see section 531.3(b) of this Title.
Example 1:
A homeowner has his lawn mowed by a student on vacation who does this kind of work only occasionally. The homeowner is not required to pay sales tax on such services.
Example 2:
A person advertises in the newspaper that he is available for repairing concrete walks on weekends and during evening hours. Such person is in a regular trade or business, offering his services to the public, and must register as a vendor and charge appropriate tax.
Example 3:
A company furnishes painters to a customer for painting the premises of the customer. The customer's payment to the company consists of the labor cost for the painters and an amount for profit, overhead and commissions. The customer supplies the paint, and all their materials, equipment and supplies. The customer supervises the manner of performing the work and directs where the painting shall be done. The company warrants that if any of the work is unsatisfactory within one year, it will at its own expense repair the condition. The company is responsible for all employment-related taxes, contributions and benefit costs. The company is performing a taxable service of maintaining the customer's property. It is not performing an interior cleaning and maintenance service, which is limited in scope to janitorial duties. The company is required to collect the tax on its entire charge to the customer; the amount for profit, overhead and commission are not deductible. (See Part 526 of this Title-Receipt.) The customer is required to pay a tax on the paint, and all other materials, equipment and supplies.
Example 4:
A homeowner who engages a service company to clean the complete interior of his home on a one-time basis is required to pay the sales tax.
Example 5:
A business concern who engages a service company to provide regular interior cleaning and maintenance services in its offices for a period of 30 days or more under a contract is not required to pay the tax since the contract covers a period of 30 days or more. However, all tangible personal property used by the service company, including floor wax, oil, etc., are taxable to the service company as these items are being transferred in connection with an exempt service.
Example 1:
A town levies a tax based on assessed valuation on all taxpayers for garbage removal services. This tax is not subject to the sales tax.
Example 2:
A town charges a fee to residents who desire garbage removal, at a rate of $15 quarterly, and rents dumpsters for a fee of $5 quarterly. These fees are subject to tax.
Example 3:
A municipality charges its property owners $10 for the removal of snow only when the property owner has not removed the snow himself. The $10 charge is taxable.
Example 4:
A municipality requires that all water meters be tested periodically. If the municipality tests the meter and charges a fee, the fee is taxable.
Cross reference:
See Part 529 of this Title, with respect to municipalities.
Notes
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