Sales Tax State Activity Update - July 2004

Three-Dimensional Posters Taxable in New York

The New York Commissioner of Taxation and Finance issued an Advisory Opinion stating that three-dimensional posters constitute tangible personal property and, are subject to sales and use tax.

The taxpayer transformed two-dimensional posters into three-dimensional posters for its customer. The customer provided the posters to be altered, and other display property that was not altered. After the modifications to the posters were made, the taxpayer delivered the posters to designated retail outlets. The delivery was made using the vehicle of the taxpayer. On occasion, the customer would provide an employee to assist the taxpayer to put very large posters on display.

One of the issues raised by the taxpayer in its Petition for an Advisory Opinion centered around the exemption provided for Promotional Material as defined in section 1101(b)(12). Since the posters were not mailed via common carrier, United States postal service or a like delivery service, and were not distributed free of charge, it was ruled they failed the definiton needed for exempt advertising material.

(Merolla Displays (Advisory Opinion), New York Commissioner of Taxation and Finance, TSBA-04 (12) S, 05/20/04 07/04

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