NY Tax L § 1118 (2021)
2021 New York Laws TAX - Tax Article 28 - Sales and Compensating Use Taxes Part 3 - Exemptions 1118 - Exemptions From Use Tax.

§  1118.  Exemptions  from use tax. The following uses of property and services shall not be subject to the compensating use tax imposed  under this article:  (1)  In  respect  to the use of property used by the purchaser in this state prior to August first, nineteen hundred sixty-five.  (2)(a) In respect to the use of property or services purchased by  the user  while  a nonresident of this state, except in the case of tangible personal property or services which the user, in the  performance  of  a contract, incorporates into real property located in the state. A person while engaged in any manner in carrying on in this state any employment, trade,  business  or  profession, shall not be deemed a nonresident with respect to the use in  this  state  of  property  or  services  in  such employment, trade, business or profession. This exemption does not apply to  the  use  of  qualified  property  where  the  qualified property is purchased primarily to carry individuals, whether or not for  hire,  who are   agents,  employees,  officers,  shareholders,  members,  managers, partners, or  directors  of  (A)  the  purchaser,  where  any  of  those individuals was a resident of this state when the qualified property was purchased  or  (B)  any  affiliated  person that was a resident when the qualified property was purchased. For purposes of this subdivision:  (i) persons  are  affiliated persons with respect to each other where one of the persons has an ownership interest of more than five percent, whether direct or indirect, in the other, or where an ownership interest of more than five percent, whether direct or indirect, is held in  each  of  the persons  by  another  person  or  by  a  group of other persons that are affiliated persons with respect to each other; (ii) "qualified property" means vessels and motor vehicles; and (iii) "carry" means  to  take  any person  from  one point to another, whether for the business purposes or pleasure of that person. For an exception to  the  exclusions  from  the definition  of  "retail sale" applicable to vessels, see subdivision (q) of section eleven hundred eleven of this article.  (b) Notwithstanding any provision of this article to the contrary, the exclusion in paragraph (a) of this subdivision shall not  apply  to  the use  within  the  state  of property or a service purchased outside this state  by  a  nonresident  that  is  not  an  individual,  unless   such nonresident  has  been doing business outside the state for at least six months prior to the date  such  nonresident  brought  such  property  or service into this state.  (3)  In  respect  to  the use of property or services upon the sale of which the purchaser would be expressly exempt  from  the  taxes  imposed under  subdivision  (a),  (b)  or (c) of section eleven hundred five. In respect to the use of property to the extent that it is exempt from  the sales tax under subdivision (g) of section eleven hundred eleven of this article.  (4)  In  respect  to  the  use  of property which is converted into or becomes a  component  part  of  a  product  produced  for  sale  by  the purchaser.  (5)  In  respect  to the use of paper in the publication of newspapers and periodicals.  (6) In respect to  the  use  of  property  used  exclusively  for  the temporary   construction,  improvement,  alteration  or  repair  of  any building, structure or exhibit, located entirely on land owned by a city having a population of one million  or  more  and  leased  by  it  to  a corporation organized for the sole purpose of holding a world's fair and confining  its  operations  solely  to preparing for and conducting such fair.  (7) (a) In respect to the use of property or services  to  the  extent that a retail sales or use tax was legally due and paid thereon, without  any  right  to  a  refund  or  credit  thereof,  to  any  other state or jurisdiction within any other state but only when it is shown that  such other  state  or  jurisdiction  allows  a  corresponding  exemption with respect  to  the  sale  or use of tangible personal property or services upon which such a sales tax or compensating use tax  was  paid  to  this state. To the extent that the tax imposed by this article is at a higher rate  than  the  rate  of  tax  in  the  first taxing jurisdiction, this exemption shall be inapplicable and the tax imposed  by  section  eleven hundred  ten of this chapter shall apply to the extent of the difference in such rates, except as provided in paragraph (b) of this subdivision.  (b) To the extent that  the  compensating  use  tax  imposed  by  this article   and  a  compensating  use  tax  imposed  pursuant  to  article twenty-nine are at a higher aggregate rate than the rate of tax  imposed in  the  first  taxing jurisdiction, the exemption provided in paragraph (a) of this subdivision shall be inapplicable and the taxes  imposed  by this  article  and  pursuant  to  article twenty-nine shall apply to the extent of the difference between such aggregate rate and the  rate  paid in  the  first  taxing  jurisdiction.  In such event, the amount payable shall be allocated between the tax imposed by this article and  the  tax imposed  pursuant to article twenty-nine in proportion to the respective rates of such taxes.  (8) In  respect  to  the  use  of  spare  parts  (including  engines), consumable  technical  supplies,  maintenance  and ground equipment used exclusively in the operation or handling or maintenance of aircraft, and aircraft stores, brought into this state from a  foreign  country  by  a foreign  airline which holds a foreign air carrier permit, issued by the Civil Aeronautics Board pursuant to Section 402 of the Federal  Aviation Act  of  1958,  as  amended,  to  engage  in foreign air transportation, provided that:  (i) such property is to be  used  on  aircraft  (or  directly  in  the operation, handling or maintenance of aircraft) of the airline providing foreign air transportation services (or such aircraft of another foreign airline eligible under this subdivision); and  (ii)  such  property  would  not  be  subject  to taxes imposed in the foreign country in which the particular  foreign  airline  is  based  if brought  into  such country by a United States airline operating in that country.  (9) In respect to the use of a thoroughbred, standardbred  or  quarter horse  purchased  outside  the  state and brought into the state for the purpose of entering a  racing  event  or  events  on  which  pari-mutuel wagering  is  authorized  by  law,  and  to  prepare therefor. Provided, however, that the exemption contained  in  this  subdivision  shall  not apply to any such horse which enters racing events in this state on more than  five days in any one calendar year. Nothing contained herein shall alter  the  exemption  provided  to  nonresidents,   as   specified   in subdivision two of this section.  (10)  In  respect to the use of horses purchased outside the state and brought into the state for racing to the extent that the  value  of  the horse  exceeds  one  hundred  thousand  dollars.  On  or before December fifteenth,  nineteen  hundred  eighty-five,  and   December   fifteenth, nineteen  hundred  eighty-six, the board shall report to the director of the budget, the  chairman  of  the  senate  finance  committee  and  the chairman  of  the  assembly  ways  and  means  committee  concerning the benefits or costs associated with the provisions of this subdivision, an assessment of any economic impact and appropriate  recommendations.  The commissioner  of  taxation  and  finance shall provide to the board such reports as are necessary to effect the board's mandate.  (11) In  respect  to  the  use  of  computer  software  that  did  not constitute tangible personal property prior to September first, nineteen hundred  ninety-one,  used by the purchaser, author or other creator, or copyright owner in this state prior to such date.  (12)  In respect to the use of prepaid telephone calling service prior to the effective date of a chapter  of  the  laws  of  nineteen  hundred ninety-nine which added this subdivision.   * (13)  In respect to the use of the following items at a tasting held by a licensed producer of alcoholic beverages  in  accordance  with  the alcoholic  beverage control law: (i) the alcoholic beverage or beverages authorized by the alcoholic beverage control law to be furnished  at  no charge  to  a  customer  or  prospective  customer  at  such tasting for consumption at such tasting; and (ii) bottles, corks,  caps  and  labels used to package such alcoholic beverages.   * NB There are 2 sb (13)'s   * (13)  In respect to the use within the state of a vessel, as defined in section twenty-two hundred fifty of  the  vehicle  and  traffic  law, until the first of the following events occur:  (a)  the use of such vessel within this state by the purchaser thereof for a period in excess of ninety consecutive days;  (b) the date upon which such vessel is first required to be registered pursuant to section twenty-two hundred  fifty-one  of  the  vehicle  and traffic law; or  (c) the date upon which such vessel is so registered.   * NB There are 2 sb (13)'s