New York Service Provider’s Purchases for Resale Qualify for Exemption

A recent Advisory Opinion determined that an information and technology service provider’s purchases of computer equipment that is offered to customers at an additional charge qualify for the New York resale exclusion from sales and use tax. The purchases are eligible for the exemption because under the circumstances, the provider is making separate rentals of equipment to clients in addition to its sales of services. Given the provider makes no other use of the routers and servers, they may be purchased exempt from tax as purchases for resale. (TSB-A-07 (26)S, New York Commissioner of Taxation and Finance, October 18, 2007)

Posted on August 11, 2008