§ 1118 — Exemptions from use tax

New York § 1118

• Jurisdiction: New York
• Law TAX: Tax
• Part 3: Exemptions
• Art. 28: Sales and Compensating Use Taxes

Text

§ 1118. Exemptions from use tax. The following uses of property and\nservices shall not be subject to the compensating use tax imposed under\nthis article:\n (1) In respect to the use of property used by the purchaser in this\nstate prior to August first, nineteen hundred sixty-five.\n (2)(a) In respect to the use of property or services purchased by the\nuser while a nonresident of this state, except in the case of tangible\npersonal property or services which the user, in the performance of a\ncontract, incorporates into real property located in the state. A person\nwhile engaged in any manner in carrying on in this state any employment,\ntrade, business or profession, shall not be deemed a nonresident with\nrespect to the use in this state of property or services in such\nemployment, trade, business or profession. This exemption does not apply\nto the use of qualified property where the qualified property is\npurchased primarily to carry individuals, whether or not for hire, who\nare agents, employees, officers, shareholders, members, managers,\npartners, or directors of (A) the purchaser, where any of those\nindividuals was a resident of this state when the qualified property was\npurchased or (B) any affiliated person that was a resident when the\nqualified property was purchased. For purposes of this subdivision: (i)\npersons are affiliated persons with respect to each other where one of\nthe persons has an ownership interest of more than five percent, whether\ndirect or indirect, in the other, or where an ownership interest of more\nthan five percent, whether direct or indirect, is held in each of the\npersons by another person or by a group of other persons that are\naffiliated persons with respect to each other; (ii) "qualified property"\nmeans vessels and motor vehicles; and (iii) "carry" means to take any\nperson from one point to another, whether for the business purposes or\npleasure of that person. For an exception to the exclusions from the\ndefinition of "retail sale" applicable to vessels, see subdivision (q)\nof section eleven hundred eleven of this article.\n (b) Notwithstanding any provision of this article to the contrary, the\nexclusion in paragraph (a) of this subdivision shall not apply to the\nuse within the state of property or a service purchased outside this\nstate by a nonresident that is not an individual, unless such\nnonresident has been doing business outside the state for at least six\nmonths prior to the date such nonresident brought such property or\nservice into this state.\n (3) In respect to the use of property or services upon the sale of\nwhich the purchaser would be expressly exempt from the taxes imposed\nunder subdivision (a), (b) or (c) of section eleven hundred five. In\nrespect to the use of property to the extent that it is exempt from the\nsales tax under subdivision (g) of section eleven hundred eleven of this\narticle.\n (4) In respect to the use of property which is converted into or\nbecomes a component part of a product produced for sale by the\npurchaser.\n (5) In respect to the use of paper in the publication of newspapers\nand periodicals.\n (6) In respect to the use of property used exclusively for the\ntemporary construction, improvement, alteration or repair of any\nbuilding, structure or exhibit, located entirely on land owned by a city\nhaving a population of one million or more and leased by it to a\ncorporation organized for the sole purpose of holding a world's fair and\nconfining its operations solely to preparing for and conducting such\nfair.\n (7) (a) In respect to the use of property or services to the extent\nthat a retail sales or use tax was legally due and paid thereon, without\nany right to a refund or credit thereof, to any other state or\njurisdiction within any other state but only when it is shown that such\nother state or jurisdiction allows a corresponding exemption with\nrespect to the sale or use of tangible personal property or services\nupon which such a sales tax or compensating use tax was paid to this\nstate. To the extent that the tax imposed by this article is at a higher\nrate than the rate of tax in the first taxing jurisdiction, this\nexemption shall be inapplicable and the tax imposed by section eleven\nhundred ten of this chapter shall apply to the extent of the difference\nin such rates, except as provided in paragraph (b) of this subdivision.\n (b) To the extent that the compensating use tax imposed by this\narticle and a compensating use tax imposed pursuant to article\ntwenty-nine are at a higher aggregate rate than the rate of tax imposed\nin the first taxing jurisdiction, the exemption provided in paragraph\n(a) of this subdivision shall be inapplicable and the taxes imposed by\nthis article and pursuant to article twenty-nine shall apply to the\nextent of the difference between such aggregate rate and the rate paid\nin the first taxing jurisdiction. In such event, the amount payable\nshall be allocated between the tax imposed by this article and the tax\nimposed pursuant to article twenty-nine in proportion to the respective\nrates of such taxes.\n (8) In respect to the use of spare parts (including engines),\nconsumable technical supplies, maintenance and ground equipment used\nexclusively in the operation or handling or maintenance of aircraft, and\naircraft stores, brought into this state from a foreign country by a\nforeign airline which holds a foreign air carrier permit, issued by the\nCivil Aeronautics Board pursuant to Section 402 of the Federal Aviation\nAct of 1958, as amended, to engage in foreign air transportation,\nprovided that:\n (i) such property is to be used on aircraft (or directly in the\noperation, handling or maintenance of aircraft) of the airline providing\nforeign air transportation services (or such aircraft of another foreign\nairline eligible under this subdivision); and\n (ii) such property would not be subject to taxes imposed in the\nforeign country in which the particular foreign airline is based if\nbrought into such country by a United States airline operating in that\ncountry.\n (9) In respect to the use of a thoroughbred, standardbred or quarter\nhorse purchased outside the state and brought into the state for the\npurpose of entering a racing event or events on which pari-mutuel\nwagering is authorized by law, and to prepare therefor. Provided,\nhowever, that the exemption contained in this subdivision shall not\napply to any such horse which enters racing events in this state on more\nthan five days in any one calendar year. Nothing contained herein shall\nalter the exemption provided to nonresidents, as specified in\nsubdivision two of this section.\n (10) In respect to the use of horses purchased outside the state and\nbrought into the state for racing to the extent that the value of the\nhorse exceeds one hundred thousand dollars. On or before December\nfifteenth, nineteen hundred eighty-five, and December fifteenth,\nnineteen hundred eighty-six, the board shall report to the director of\nthe budget, the chairman of the senate finance committee and the\nchairman of the assembly ways and means committee concerning the\nbenefits or costs associated with the provisions of this subdivision, an\nassessment of any economic impact and appropriate recommendations. The\ncommissioner of taxation and finance shall provide to the board such\nreports as are necessary to effect the board's mandate.\n (11) In respect to the use of computer software that did not\nconstitute tangible personal property prior to September first, nineteen\nhundred ninety-one, used by the purchaser, author or other creator, or\ncopyright owner in this state prior to such date.\n (12) In respect to the use of prepaid telephone calling service prior\nto the effective date of a chapter of the laws of nineteen hundred\nninety-nine which added this subdivision.\n * (13) In respect to the use of the following items at a tasting held\nby a licensed producer of alcoholic beverages in accordance with the\nalcoholic beverage control law: (i) the alcoholic beverage or beverages\nauthorized by the alcoholic beverage control law to be furnished at no\ncharge to a customer or prospective customer at such tasting for\nconsumption at such tasting; and (ii) bottles, corks, caps and labels\nused to package such alcoholic beverages.\n * NB There are 2 sb (13)'s\n * (13) In respect to the use within the state of a vessel, as defined\nin section twenty-two hundred fifty of the vehicle and traffic law,\nuntil the first of the following events occur:\n (a) the use of such vessel within this state by the purchaser thereof\nfor a period in excess of ninety consecutive days;\n (b) the date upon which such vessel is first required to be registered\npursuant to section twenty-two hundred fifty-one of the vehicle and\ntraffic law; or\n (c) the date upon which such vessel is so registered.\n * NB There are 2 sb (13)'s\n