N.Y. Comp. Codes R. & Regs. tit. 20 § 527.6

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

Section 527.6 - Storage of tangible personal property

Tax Law, § 1105(c)(4)

(a)Definition.

Storage is the provision of a place for the safekeeping of goods, without regard to the manner of payment or length of time of the service.

(b)Imposition.

(1) The tax is imposed on the sale, except for resale, of the service of storing tangible personal property, and the rental of safe deposit boxes and similar space.

(2) While the tax is imposed on the service of providing storage space, it is not imposed on the lease of real property for storage. A lease can be distinguished from the provision of storage space, in that under a lease, the tenant contracts for a certain amount of footage in a specific location, the tenant has unlimited control of access to the space, and may supply his own racks, cabinets and other physical facilities.

(3) While the tax is imposed on storage of vehicles, it is not imposed on parking or garaging of vehicles. The terms parking and garaging connote circumstances under which a person has regular and immediate access to his vehicle.

Example 1:

A person moors his boat in a slip, at a marina, during the summer months, and places it in storage on land during the winter months. The charges for mooring are not taxable; the charges for storage are taxable.

Example 2:

A person stores his goods at a warehouse, in whatever space the warehouse company has available. The charges for such storage are taxable.

Example 3:

A person stores his goods in a specific space in a building, and no other person has access to the space assigned. This is storage of tangible personal property and the charges are taxable.

Example 4:

A consumer who uses a refrigerated locker in a public warehouse to store a quantity of meat products must pay sales tax on the storage charge even though commodity stored is itself exempt from tax.

Example 5:

The charge made by a hotel for safekeeping of its guests' valuables is a charge similar to that made for use of a safe deposit box and is taxable.

(c)Exclusions.

The storage of property held for sale in the regular course of business, and the sale of the service of storage for resale is not taxable.

Example 1:

A furniture store maintaining part or all of its inventory in a public warehouse is not liable for tax on the storage charges because the tangible personal property is held for resale in the regular course of business.

Example 2:

A cleaning establishment offering clothing storage services to its customers has the articles stored in the facilities of a public warehouse. Since the storage service acquired by the cleaning establishment is resold, no tax is due on the charge by the warehouse to the cleaning establishment. When billing the customer for storage services, the cleaning establishment must charge sales tax at the rate in effect at the point where the clothing is accepted for storage (either the customer's residence or location of the business) even though the storage facility may be located in an area having a different tax rate.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 527.6