Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, §§ 1115(a)(26), (g), 1139(g)
(a)
Exemption.
(1) The sale or lease of qualifying vehicles
as defined in subdivision (b) of this section and property installed on such
vehicles for the equipping, maintenance or repair thereof are exempt from the
sales and use tax.
(2) Services of
installing, maintaining, servicing or repairing tangible personal property
(ordinarily taxed pursuant to section
1105[c][3] of the Tax Law)
performed on qualifying vehicles for their equipping, maintenance or repair and
on property installed on such vehicles for their equipping, maintenance or
repair are also exempt from the sales and use tax.
(3) The exemption does not apply with respect
to the purchase or use of:
(i)
trucks;
(ii) motor fuel and/or
diesel motor fuel;
(iii) shop
equipment;
(iv) tools (other than
tools sold as part of original equipment of a vehicle);
(v) tractors tractor, trailers and
semitrailers when used in combination which have gross vehicle weights of
26,000 pounds or less;
(vi) mobile
homes and/or factory-manufactured homes; and
(vii) taxable services other than those
subject to tax pursuant to section
1105(c)(3) of the Tax Law.
The exemption certificate for tractors, trailers, or
semitrailers may not be used for purchases of tangible personal property or
services described in subparagraphs (i)-(iv) and (vi)-(vii) of this
paragraph.
(b)
Definitions.
The following terms shall apply for purposes of this
section.
(1) A tractor
is a motor vehicle designed and used as the power unit in combination with a
semitrailer or trailer, or two such trailers in tandem. Any such motor vehicle
shall not carry cargo except that a tractor and semitrailer engaged in the
transportation of automobiles may transport motor vehicles on part of the power
unit.
(2) A
semitrailer is any trailer which is so designed that when
operated the forward end of its body or chassis rests upon the body or chassis
of the towing vehicle.
(3) A
trailer is any vehicle not propelled by its own power, drawn
on the public highways by a motor vehicle (as defined in section
125 of the Vehicle and Traffic Law) except
for:
(i) motorcycle sidecars;
(ii) vehicles being towed by a nonrigid
support; and
(iii) vehicles
designed and primarily used for other purposes and only occasionally drawn by
such a motor vehicle.
(4)
Gross vehicle weight is
the unloaded weight of the vehicle plus the unloaded weight of the heaviest
motor vehicle, trailer, semitrailer, dolly or other device to be used in
combination with such vehicle plus the weight of the maximum load, exclusive of
the weight of the driver, and his/her helper, which may be carried or drawn by
such vehicle.
(5)
Unloaded
vehicle weight is the actual weight of the vehicle, which includes all
equipment:
(i) necessary for the performance
of the function of the vehicle as a vehicle;
(ii) necessary for the safety of the
vehicle;
(iii) permanently attached
to the vehicle;
(iv) used
exclusively for the protection of the load carried by the vehicle; or
(v) used exclusively for the loading or
unloading of the vehicle.
(6)
Qualifying vehicle is a
tractor, trailer or semitrailer, provided such qualifying vehicle is used in
combination with any vehicles where the gross vehicle weight of such
combination exceeds 26,000 pounds. Trailers and semitrailers which otherwise
meet the requirement for exemption when combined with a tractor are considered
a qualifying vehicle though combined with a truck.
(c)
Purchases.
(1) Generally, the purchase or lease of a
qualifying vehicle or property installed on such vehicle for its equipping,
maintenance or repair may be made without the payment of sales tax provided the
purchaser gives to the vendor a properly completed exemption certificate for
tractors, trailers and semitrailers within 90 days of the delivery of the
property.
Example 1:
An individual engaged in the transportation of property
purchases a new tractor from a dealer. The purchase agreement calls for the
tractor to be fully equipped for long-haul situations. Such optional equipment
includes the addition of a sleeper unit, an AM-FM stereo radio, splash guards,
roof-mounted wind deflector and a built-in toolbox with hand tools included.
The purchaser intends to use the tractor in combination with a trailer which
when loaded will exceed 26,000 pounds gross vehicle weight. The purchase of the
tractor and all optional equipment is exempt from sales tax provided the
purchaser gives the vendor a properly completed exemption certificate for
tractors, trailers or semitrailers, within 90 days of the delivery of the
property.
(2)
(i) The purchase of the services of
installing, maintaining, servicing or repairing tangible personal property
(ordinarily taxed pursuant to section
1105[c][3] of the Tax Law)
performed on (
a) qualifying vehicles for the equipping,
maintenance or repair thereof, or (
b) property installed on
qualifying vehicles for the equipping, maintenance or repair thereof, may be
made without the payment of sales tax. Property installed by the vendor of the
service and transferred as part of such service is also exempt from tax
regardless of whether the charges therefor are separately stated on the bill
given to the customer. The purchaser must provide the vendor with a properly
completed exemption certificate for tractors, trailers and semitrailers within
90 days of the date the services were performed to avail itself of the
exemption.
Example 2:
The owner of a qualifying vehicle has the vehicle serviced
at a truck repair center. The services performed consist of changing the oil
and oil filter, checking all fluid levels, and replacing light bulbs. Charges
for such services and parts are exempt from the sales tax provided the
purchaser gives to the vendor a properly completed exemption certificate for
tractors, trailers or semitrailers within 90 days of the date the services were
performed.
Example 3:
The owner of a dump truck has the same services provided to
its vehicle as in example 2. Although the gross vehicle weight of the dump
truck exceeds 26,000 pounds, the services are subject to tax because the
exemption is limited to services performed on qualifying tractors, trailers,
semitrailers or property installed on such vehicles and does not apply to
services performed on other motor vehicles.
(ii) Services other than those subject to tax
pursuant to section
1105(c)(3) of the Tax Law
performed on qualifying vehicles or on property installed on qualifying
vehicles are not exempt from tax pursuant to section
1115(g) of the Tax Law.
Thus, the service of producing, fabricating, processing, printing or imprinting
tangible personal property, performed on qualifying vehicles or property
installed on qualifying vehicles, for a person who directly or indirectly
furnishes such property (not purchased by him for resale) are subject to tax.
Example 4:
The purchase of vehicle painting services for the purpose
of advertisement, product promotion, company identification or decorative value
are subject to sales and use taxes.
(3)
(i)
Generally, the purchase of parts and supplies (excluding motor fuel and diesel
motor fuel) that are installed on or attached to qualifying vehicles for their
equipping, maintenance or repair may be made without the payment of sales tax
provided the purchaser gives to the vendor a properly completed exemption
certificate for tractors, trailers or semitrailers within 90 days of the
delivery of the property. Such purchases include but are not limited to the
following:
(a) vehicle repair and replacement
parts;
(b) vehicle fluids
(e.g., oil, brake fluid, transmission fluid, coolant, etc.)
excluding motor fuel and/or diesel motor fuel;
(c) cargo restraint systems;
(d) anti-theft devices;
(e) safety decals;
(f) wind deflectors;
(g) splash guards;
(h) tractor hose retrievers; and
(i) dollies which convert semitrailers to
trailers.
(ii) The
purchase of tools (other than those sold as part of the original equipment of a
vehicle), shop equipment and supplies that do not become part of or attach to a
qualifying vehicle are subject to tax at the time of purchase. Such purchases
include but are not limited to the following:
(a) road flares and reflectors;
(b) hand tools;
(c) service jacks;
(d) tire changers;
(e) battery chargers;
(f) parts washers;
(g) truck/tractor washers;
(h) work stands; and
(i) wheel balancers.
The exemption certificate for tractors, trailers or
semitrailers may not be used for purchases of tangible personal property
described in this subparagraph.
(4) Bulk purchases by registered vendors.
(i) Purchases in bulk of parts and supplies
described in subparagraph (3)(i) of this subdivision for qualifying and
non-qualifying vehicles when made by a person which is registered as a vendor
for purposes of the New York State sales and use tax may be made without the
payment of sales tax to the extent that the use of such parts and supplies
cannot be identified at the time of purchase. However, use tax must be paid
when such parts and supplies are installed on a nonqualifying vehicle or when
used in the equipping, maintenance or repair of a nonqualifying vehicle. Such
tax should be paid with and reported on the vendor's return filed for the
period in which such parts and supplies are so used. Such person must maintain
records sufficient to identify the use of all such parts and supplies. (See
subdivision [d] of this section and Part 533 of this Title.)
Example 5:
Company A, a registered vendor, owns, operates and services
its own fleet of trucks, tractors, trailers and semitrailers. Company A makes
bulk purchases of oil, oil filters, glo-plugs, brake fluid, brake pads, and
tires all of which are intended for use on its qualifying vehicles. It may
purchase all such parts and supplies exempt from sales tax by giving the vendor
a properly completed exemption certificate for tractors, trailers or
semitrailers. However, Company A is liable for the use tax on the cost of any
parts and supplies purchased for use on its qualifying vehicles but used on
those of its vehicles which do not qualify for the exemption. Company A is
required to maintain adequate records to identify the vehicles on which such
parts and supplies were used.
(ii) Where parts and supplies described in
subparagraph (3)(i) of this subdivision are identifiable for use on
nonqualifying vehicles, no exemption is authorized and the person making such
purchases is required to pay the tax at the time of purchase.
Example 6:
Company B, a registered vendor, owns, operates and services
its fleet of trucks, tractors and trailers. Company B makes purchases in bulk
of tires for its fleet from two suppliers. All tires for its nonqualifying
truck fleet are purchased from Supplier No. 1 while all tires for its
qualifying vehicles are purchased from Supplier No. 2. In this instance,
Company B is required to pay the tax at the time of its purchases from Supplier
No. 1 but may issue an exemption certificate for tractors, trailers or
semitrailers for its purchases from Supplier No. 2.
(iii) When a person, which is a registered
vendor, pays tax at the time of purchase of parts and supplies later used in a
manner which qualifies for exemption, it may apply for a refund or credit of
such tax. (See subdivision [e] of this section for provisions relating to
refunds and credits.)
(5) Bulk purchases by other than registered
vendors.
(i) Purchases of parts and supplies
described in subparagraph (3)(i) of this subdivision made in bulk by a person
which is not required to and is, thus, not registered as a vendor for New York
State sales and use tax purposes are exempt only to the extent that all such
purchases are for use on qualifying vehicles. In order to make exempt
purchases, a properly completed exemption certificate for tractors, trailers or
semitrailers must be furnished to the vendor within 90 days of the sale. The
purchaser is required to maintain adequate records to identify the vehicles on
which such parts and supplies were used.
(ii) When parts and supplies described in
subparagraph (3)(i) of this subdivision are purchased by a person which is not
a registered vendor and such person cannot, at the time of purchase, identify
those parts and supplies which will be used on a qualifying vehicle, such
person must pay the tax at the time of purchase. Such person may apply for a
refund of tax paid with respect to those purchases of property installed upon a
qualifying vehicle for its equipping, maintenance or repair. (See subdivision
[e] of this section for provisions relating to refunds and credits.)
(iii) When purchases of parts and supplies
are identifiable for installation on or use in the equipping, maintenance or
repair of nonqualifying vehicles, no exemption is authorized and the purchaser
is required to pay the tax due at the time of purchase.
(d)
Vendor and customer
obligations.
(1) In general, the burden
of proving a receipt is not taxable is upon the vendor and the customer. The
vendor's sales records must either provide sufficient detail to independently
determine the taxable status of each sale and the amount of tax due and
collected thereon or be substantiated by analysis of supporting records. Any
vendor who willfully fails to keep any required records shall be subject to
criminal liability. In order to prove a sale was exempt from tax, exemption
certificates must be received, dated and retained. For purposes of this
exemption, the vendor must obtain from the purchaser or its authorized
representative, a properly completed exemption certificate for tractors,
trailers or semitrailers within 90 days of the date of sale. In addition, the
name of the business entity and the authorized representative must be shown on
all invoices for such purchases whether made by cash, check or charged to the
customer's account when such purchases are made by the customer. When services
are performed on vehicles, the customer invoice must contain information
sufficient to identify the vehicle on which such services are performed
(e.g., highway use tax permit number for tractors or vehicle
registration/license plate number for trailers). Vendors accepting exemption
certificates must maintain a method of associating sales made for exempt
purposes with the certificates on file. A properly completed certificate timely
received in good faith within 90 days of the sale, will relieve the vendor of
its liability to collect tax on transactions to which the certificate applies.
In such event, the burden of proving a transaction is not taxable shall be
solely upon the customer. A certificate is not received in good faith if
accepted in the sale of tangible personal property or a service which is
designated on the front or reverse side of the certificate as not being exempt
from tax. In such a case the vendor and customer are each liable for the sales
and compensating use tax due.
(2)
Customer obligations. Any person who willfully issues a false or fraudulent
exemption certificate with intent to evade tax shall be subject to civil and
criminal penalties. A properly completed certificate timely received in good
faith, will relieve the vendor of its liability to collect tax on transactions
to which the certificate applies. In such event, the burden of proving a
transaction is not taxable shall be solely upon the customer. Sales and
compensating use tax will be due with respect to any vehicle, parts or supplies
which are purchased free of tax and later used in a manner which does not
qualify for exemption. Unless a customer keeps records sufficient to prove that
property purchased without payment of tax was used in an exempt manner, it
shall be presumed that compensating use tax is due with respect to such
property.
(3)
(i) For more complete rules with respect to
collection of tax and vendor's obligations see Parts 532 and 533 of this
Title.
(ii) For criminal penalties
for failure to keep required records, see Tax Law, section 1817(j).
(iii) For civil and criminal penalties for
false or fraudulent use of an exemption certificate, see Tax Law, sections
1145(a)(5) and 1817(m).
(e)
Refund or credit.
Refunds and credits of sales tax imposed and paid on
purchases subject to the exemption described in subdivision (a) of this section
shall be administered in accordance with the provisions of Part 534 of this
Title and section
1139 of the
Tax Law.
