Income/Franchise:
New York: Advisory Opinion Explains Sourcing of Receipts from Sales and Installation of Lighting

TSB-A-24(1)C, (11)S, N.Y. Dept. of Tax. & Fin. (7/30/24). A New York Department of Taxation and Finance advisory opinion involving a company selling and installing commercial lighting fixtures concluded that where the company transfers possession of the fixtures to a purchaser within New York State or the final destination of the property is a point in New York State, the receipts for the sale of those fixtures must be apportioned to New York for Article 9-A corporation franchise tax purposes. Under the provided facts, the opinion explains that if the purchase order designates the destination location as a point within New York State, “that would constitute sufficient evidence to rebut the presumption that the destination of the property is a point outside New York State, and the receipts for the sale must be apportioned to New York.” Alternatively, if the purchase order does not show the destination location as a point within New York State and, in the absence of such information or other evidence demonstrating the destination location, “the presumption that the final destination of the property is a point outside New York State will not be rebutted.” In instances where the company provides for transportation of the fixtures (and thus would have shipping documents designating the destination location), then the receipts for the sale must be apportioned to New York State if such documents or other evidence demonstrates that the destination location is a point within New York State. Moreover, the opinion explains that if the company installs the fixtures, or otherwise has documentation demonstrating that the destination location of the property is a point within New York State, “such evidence will rebut the presumption that the final destination of the property is a point outside New York State, and the receipts must be apportioned to New York.”

For sales and use tax purposes, the advisory opinion concluded that the company must pay New York sales or use tax on the sales of lighting fixtures that include installation at a location within New York (unless the company timely receives a properly completed Form ST-124, Certificate of Capital Improvement, in which case it would be relieved of the obligation to collect sales tax), and also on fixtures sold without installation where it delivers the fixture to the customer or its designee in New York. Please contact us with any questions.