N.Y. Comp. Codes R. & Regs. tit. 20 § 531.4

Current through Register Vol. 46, No. 25, June 18, 2024

Section 531.4 - Property used outside of State prior to use in New York

(a) General rule. When tangible personal property is purchased outside of the State by a resident of the State, for use outside of the State, and is subsequently used in the State, the compensating use tax is due on the purchase price.

Cross reference:Definition of resident, see section 526.15 of this Title.

(b) Use outside the State in excess of six months. Where a resident affirmatively shows that he used such property outside the State for more than six months prior to its first use in New York, the use tax is based on the current market value of the property, not to exceed its cost, at the time of first use within New York.

Example:A New York State resident, absent from the State for an extended period, purchased a boat outside of this State for $2,000 on November 1, 1974. On August 1, 1975, the resident brought the boat, having a fair market value of $1,500, into New York State. The resident is liable for the combined State and local tax on the $1,500 at the rate in effect on August 1, 1975.

(c) Use of property in performing a contract.

(1) Tangible personal property brought into New York State for use in the performance of a contract or subcontract within this State is subject to the compensating use tax based on the purchase price of such property.

(2) Where the tangible personal property brought into the State will be used for a period of less than six months, the user, at his option may elect to pay the compensating use tax based on the fair rental value of the property for the period of use within New York. This treatment is not applicable to tangible personal property completely consumed, or incorporated into real property located in the State.

Example:A contractor performing a construction contract in New York State purchases a crane for $100,000 outside the State and brings it into this State for temporary (less than six months) use in the contract work. The crane has a fair rental value of $2,500 per month. The contractor is liable for the compensating use tax on the $100,000 purchase price unless he elects to report such tax based on the fair rental value of $2,500 per month.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 531.4