N.Y. Comp. Codes R. & Regs. tit. 20 § 541.10

Current through Register Vol. 46, No. 18, May 1, 2024

Section 541.10 - Tools and supplies

Tax Law, § 1105(a)

(a) Charges for tools or supplies (including safety apparel) purchased by a contractor are subject to the State and local sales or use taxes.

Example:

A masonry contractor sets forms for pouring a foundation footing in the performance of a nonagency contract for the erection of a building for an exempt organization. The walls are set upon the footing and the foundation is backfilled. The supplies used in making forms are left in the ground since the cost of removal is more than the salvage value. Although the supplies stay with the job they are considered abandoned and not transferred to the customer as a component part of the project. The cost of the supplies is taxable to the contractor.

(b) Where a resident contractor purchases tools or supplies (including safety apparel) outside the State, the cost is subject to State and local compensating use taxes when used in the State. Where a contractor purchases tools or supplies (including safety apparel) in one taxing jurisdiction and uses them in another jurisdiction having a higher combined State and local tax rate and in which he was a resident contractor at the time of purchase, a compensating use tax is due to the extent of the difference in rates.

Cross-reference:

For refunds and credits based on purchases in bulk, see section 534.3 of this Title. For computation of compensating use tax, see Part 531 of this Title.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 541.10