New York taxes services only when the Tax Law specifically lists them. Most professional and personal work is exempt, but seven categories carry sales tax: repairs to tangible personal property, maintenance and cleaning of real property, information services, protective and detective services, parking and vehicle storage, admissions to places of amusement, and intrastate telecommunications. The state rate is 4%, and local rates add another 3% to 4.75%, so the combined rate runs roughly 7% to 8.75% depending on where the service is performed.1Tax.NY.gov. Sales and Use Tax: Tax Expenditure Estimates If a service does not appear in Tax Law § 1105, no sales tax applies.2New York State Senate. New York Tax Law 1105 – Imposition of Sales Tax
Repairs and Services to Tangible Personal Property
Installing, maintaining, servicing, or repairing tangible personal property is taxable under Tax Law § 1105(c)(3).2New York State Senate. New York Tax Law 1105 – Imposition of Sales Tax A mechanic fixing a car, a technician repairing a refrigerator, or a jeweler cleaning a ring charges tax on the full receipt, including labor, even when no parts are replaced. Furniture restoration, appliance installation, and tool sharpening sit in the same bucket. The rate is the combined state and local rate for the location where the work is performed.
Maintaining, Servicing, and Repairing Real Property
Work on buildings, land, and permanently attached structures is taxable under Tax Law § 1105(c)(5).2New York State Senate. New York Tax Law 1105 – Imposition of Sales Tax Common taxable jobs include janitorial and interior cleaning, pest control, trash removal, snow plowing, window washing, and floor waxing. The vendor charges the combined rate at the job site.
Capital Improvements vs. Taxable Repairs
A capital improvement is exempt, but it has to satisfy all three conditions: it substantially adds value or extends the useful life of the property, it becomes part of the property or is permanently affixed so that removing it would cause damage, and it is intended to be permanent.3Department of Taxation and Finance. Capital Improvements Installing a new roof or adding a deck qualifies. Patching a leaky section of roof or refinishing a deck does not. The dollar size of a project does not, on its own, convert a repair into a capital improvement.
When a project qualifies, the property owner gives the contractor a completed Form ST-124, Certificate of Capital Improvement, which relieves the contractor from liability for uncollected tax.3Department of Taxation and Finance. Capital Improvements Without that certificate, or when any one of the three conditions is missing, the contractor must collect sales tax on the job.
Information Services
Tax Law § 1105(c)(1) covers businesses that collect, compile, or analyze information and furnish reports to others. Credit reporting agencies, financial newsletter publishers, stock market advisory firms, and sellers of mailing lists or marketing surveys all collect sales tax.4New York Codes, Rules and Regulations. New York Code R. and Regs. Tit. 20 527.3 – Sale of Information Services
There is one meaningful carve-out. Information that is personal or individual in nature and is not substantially incorporated into reports sold to other people is not taxable.4New York Codes, Rules and Regulations. New York Code R. and Regs. Tit. 20 527.3 – Sale of Information Services A one-off custom report prepared solely for one client, with nothing repackaged for others, can qualify. Reports distributed to multiple subscribers do not.
Protective and Detective Services
Tax Law § 1105(c)(8) applies broadly: alarm and security monitoring, guard and patrol services, detective agencies, and armored car transport. The statute reaches protection against burglary, theft, fire, water damage, and malfunctions of industrial processes. When a security company installs and maintains monitoring hardware as part of the contract, the entire charge is taxable. The only exception is for security officers licensed by the New York Waterfront Commission.2New York State Senate. New York Tax Law 1105 – Imposition of Sales Tax
Parking, Garaging, and Storing Motor Vehicles
Tax Law § 1105(c)(6) taxes parking, garaging, or storing motor vehicles at a garage, parking lot, or any other business providing those services.5Department of Taxation and Finance. Parking, Garaging, and Storing Motor Vehicles Monthly contracts, daily garage fees, and event parking all carry tax. Two situations are excluded: garages that are part of a private one- or two-family residence, and parking provided by most public corporations. Public benefit corporations created by interstate compact or with gubernatorially appointed members remain taxable.2New York State Senate. New York Tax Law 1105 – Imposition of Sales Tax
Admissions to Places of Amusement
Tax Law § 1105(f)(1) taxes admission charges above ten cents to any place of amusement in New York. Tickets to sporting events, concerts, carnivals, circuses, exhibitions, and stock car races qualify, and so do charges for using entertainment devices and facilities.6New York Codes, Rules and Regulations. New York Code R. and Regs. Tit. 20 527.10 – Admission Charges
Intrastate Telecommunications
Tax Law § 1105(b) taxes intrastate telephone and telecommunication services, including local telephone, toll service, cellular, and paging. Interstate and international calls are exempt.2New York State Senate. New York Tax Law 1105 – Imposition of Sales Tax A business buying telecom used within the state should expect sales tax on those charges.
Services That Are Not Taxable
Because New York taxes only enumerated services, the exempt list is much longer than the taxable one. The following common categories do not carry sales tax:7Department of Taxation and Finance. Products, Services, and Transactions Subject to Sales Tax
- Legal, accounting, architectural, engineering, and consulting fees.
- Medical and dental services provided by licensed healthcare professionals.
- Tuition and instructional fees.
- Haircuts, spa treatments, and similar personal grooming services.
- Capital improvements to real property that meet all three criteria above.
Providers of these services do not collect sales tax on them. They still pay sales tax on the supplies and equipment they buy for their own use, unless a specific exemption applies.
Buying Taxable Services from Out-of-State Vendors
When you buy a taxable service from an out-of-state vendor that does not collect New York sales tax, you owe use tax at the same combined rate. This comes up most often with information services and security monitoring purchased from companies based outside the state.8Department of Taxation and Finance. Use Tax for Businesses
If your business is already registered for sales tax, report use tax on your regular sales and use tax return. If you are not registered, sole proprietors can report on their personal income tax return or on Form ST-140, and other business entities file Form ST-130 within 20 days of the service being delivered into New York.8Department of Taxation and Finance. Use Tax for Businesses This is one of the most commonly overlooked compliance obligations in state tax.
Buying a Taxable Service for Resale
If you purchase a taxable service specifically to resell it to your customers, you can buy it tax-free by giving the vendor a completed Form ST-120, Resale Certificate. The form certifies that the service will be resold as part of your regular business operations, and a blanket certificate can cover all purchases of the same general service type from a given vendor. Contractors cannot use the ST-120. They use Form ST-120.1 (Contractor Exempt Purchase Certificate) or a Direct Payment Permit instead.9Department of Taxation and Finance. Form ST-120 Resale Certificate