New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter IV - Sales And Use And Other Miscellaneous Taxes › Subchapter A - Sales And Use Taxes › Part 531 - Compensating Use Tax › Section 531.5 - Exemptions from the compensating use tax

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, §§ 1116 and 1118
(a) Since the compensating use tax
				  complements and supplements the sales tax, no use tax will be imposed on the
				  use of tangible personal property or services which have been or will be
				  subject to the sales tax.
(b) The
				  compensating use tax shall not be imposed on the use of:
(1) Property, by the purchaser thereof,
				  within this State prior to August 1, 1965, the effective date of the
				  tax.
(2) Property within this State
				  when purchased by the user while a nonresident of this State, except when the
				  property is, in the performance of a contract, incorporated into real property
				  located in this State (a nonresident is any person who is not a resident as
				  defined in section
				  526.15  of
				  this Title).
Example 1:
A resident of Vermont purchased a television set in Vermont
					 for his home in Vermont. At a later date he moves and takes up residency in New
					 York State and uses the television set in this State. No use tax is due on the
					 use of the television set in New York State.
Example 2:
A nonresident contractor with a business location in
					 Vermont purchases tangible personal property in Vermont, which is incorporated
					 in a building he is erecting in New York. He is required to pay a compensating
					 use tax on his use of such property.
(3) Property or services the sale of which is
				  exempt from the sales tax. (See Part 528 of this Title.)
(4) Property which is converted into or
				  becomes a component part of a product produced for sale by the purchaser.
Example 3:
A manufacturer purchases leather for use in making shoes.
					 When the leather becomes a component part of shoes which are for sale no use
					 tax is due on the leather.
(5) Paper in the publication of newspapers or
				  periodicals.
Example 4:
A newspaper publisher purchases 15 rolls of newsprint. When
					 the newsprint is used in publishing the newspaper no use tax is
					 due.
(6) Tangible personal
				  property or services purchased by any organization which has qualified as an
				  exempt organization under section 1116  of the Tax Law.
Example 5:
An organization exempt from the sales tax purchases lumber
					 for its own use. No use tax is due.
(7) Tangible personal property sold, other
				  than through a shop or store, by an organization exempt under section 1116 (a)(4) (5) and (6)  of the Tax Law.
(8) Services sold by organizations exempt
				  under section 1116 (a)(4) (5) and (6)  of the Tax Law.
(9) Tangible personal property or services of
				  a type not ordinarily sold by private persons, when sold by organizations
				  exempt under section 1116 (a)(1) (2) and (3)  of the Tax Law.
Cross-reference:
See section
					 528.28 
					 of this Title regarding exemption from tax for property donated by the
					 manufacturer, processor or assembler of the property to an exempt
					 organization.