Introduction
This bulletin provides information on New York State and local sales taxes (sales tax) as they apply to household movers and warehousers. It also answers questions generally encountered in the operation of a moving or warehousing business. This bulletin:
- describes the kinds of moving services typically provided by movers and warehousers, and
- explains when movers and warehousers must collect sales tax on these services.
See also Tax Bulletin Household Movers and Warehousers - General (permanent) storage and storage pods (TB-ST-340), for additional information.
Imposition of sales tax
New York State's sales tax is generally imposed on the receipts from every sale of tangible personal property and on the receipts from the sale of certain services.
The service of transporting household goods (moving service) is not subject to sales tax unless the charge is included as part of the bill for the sale of taxable property or services (e.g., a charge for shipping as part of the sale of taxable tangible personal property).
A charge for general storage unrelated to moving services is subject to sales tax, regardless of the duration of the storage contract. See Tax Bulletin Household Movers and Warehousers - General (permanent) storage and storage pods (TB-ST-340).
Note: Charges for transportation arranged by a seller of taxable property or services, and charges for the assembly or installation of taxable property, are part of the receipt from the sale of the property or services and are subject to sales tax.
Moving services
Local, intrastate, interstate, or international moving services provided by household movers are not subject to sales tax. Moving services include moving household goods to and from any destination. Moving services include moving items from a building to a truck, from a truck to a building, or moving items within a building, whether or not truck transportation is provided. Office moves are treated the same as household moves.
Storage in transit
Storage in transit occurs in the context of a moving service when events delay the delivery of goods by the mover to the customer's destination, and the stored property is the responsibility of the mover.
Storage in transit for 30 days or less
A mover's charge to its customer for storage in transit for a period of 30 days or less is not subject to sales tax, as long as the service is provided by a mover in connection with the transportation of goods by the mover. If the mover pays a third party to provide the storage, that payment is subject to sales tax.
Storage in transit for more than 30 days
If the storage-in-transit period exceeds 30 days, the mover's entire charge to its customer for the storage is subject to sales tax. If the mover pays a third party to provide the storage, the mover can issue Form ST-120, Resale Certificate, to the storage provider to purchase the storage for resale. The tax rate that applies is the rate in effect where the storage occurs in New York State. If the storage occurs outside of New York State, no New York State or local sales tax is due. (Note: A mover selling taxable storage must register for New York State sales tax purposes. See Tax Bulletin How to Register for New York State Sales Tax (TB-ST-360).)
Example 1: A mover's customer is relocating from New York City to Albany. Due to a construction delay, the customer's new home in Albany will not be ready to move into for another 3 weeks. However, the customer must vacate the New York City location immediately. The mover agrees that in addition to packing and moving the customer's belongings from New York City to Albany, the mover will, for an additional charge, store the customer's property at the mover's warehouse in Albany until the customer's new home is ready. The storage service is provided in connection with moving the customer's belongings from New York City to Albany. Since the period of storage in transit does not exceed 30 days, the charge for storage in transit is not subject to sales tax.
Example 2: J&D Movers picks up a truckload of used office furniture in Rochester, NY, to be delivered to Buffalo, Albany, and White Plains for its customer, RZ Consulting. The furniture is separated for delivery to each stop at J&D Movers' warehouse. The furniture for Buffalo is delivered by J&D Movers the next day. An independent driver is hired to transport the remaining furniture to Albany and White Plains at a later date. What portion of the transaction is taxable?
This transaction is a moving service with multiple destinations. J&D Movers' charge to RZ Consulting for the moving service is not subject to tax. If there is a separate charge for the storage at J&D Movers' warehouse, that charge is not taxable if the period of storage is 30 days or less. A separate charge for storage is taxable if the period exceeds 30 days, even though the furniture for Buffalo was only stored for one day. J&D Movers' payment to the independent driver is payment for a moving service and is not subject to tax.
For transactions involving both moving and storage services, it is important to focus on what a seller is selling and what a buyer is purchasing in order to determine the taxability of each transaction. Examples 3-7 below are based on the following facts:
Facts: Al's Clothes Store hires A-Z Moving to transport a truckload of store fixtures from Buffalo to a new store location in New York City. A-Z Moving charges Al's Clothes store $7,500 for its moving services.
When A-Z Moving's driver arrives in New York City, the new store is not yet ready due to electrical problems. A-Z Moving's driver takes the fixtures to Joey's Central Warehouse for storage until the store is ready. Joey's Central Warehouse charges $50 per day for the storage.
Example 3: The store is ready in 25 days. Joey's Central Warehouse bills A-Z Moving $1,250 (25 days at $50 per day) for the storage. A-Z Moving bills Al's Clothes Store a marked-up charge of $1,500 ($60 per day) for the storage.
Joey's Central Warehouse is selling A-Z Moving taxable storage services. Since the period of storage is 30 days or less, A-Z Moving's charge to Al's Clothes Store for the storage will be considered storage in transit and exempt as part of the nontaxable moving service. As a result, A-Z Moving cannot buy the storage from Joey's Central Warehouse for resale and must pay sales tax to Joey's Central Warehouse on the $1,250 charge for storage.
When the store is ready, A-Z Moving delivers the fixtures. A-Z Moving is selling a nontaxable moving service to Al's Clothes Store and A-Z Moving's completion of the delivery is a continuation of the original contract for moving services. Its charge of $7,500 to Al's Clothes Store for moving services is not taxable regardless of how long the fixtures are in storage.
Example 4: The store is ready in 37 days. Joey's Central Warehouse bills A-Z Moving $1,850 (37 days at $50 per day) for the storage. A-Z Moving bills Al's Clothes Store a marked-up charge of $2,220 ($60 per day) for the storage. Since the period of storage is more than 30 days, it is not treated as storage in transit and A-Z Moving's charge of $2,220 to Al's Clothes Store for the storage is taxable. A-Z Moving must collect sales tax from Al's Clothes Store on its $2,220 charge for storage. As a result, A-Z Moving can buy the storage for resale from Joey's Central Warehouse by issuing Form ST-120, Resale Certificate.
Example 5: The store is ready in 25 days and Joey's Central Warehouse charges A-Z Moving $1,250 for the storage. A-Z Moving bills Al's Clothes Store a marked-up charge of $1,500 for the storage. Rather than complete delivery itself, A-Z Moving pays Joey's Central Warehouse an additional $500 to deliver the fixtures. Because the purpose of the transaction between Joey's Central Warehouse and A-Z Moving is for storage, Joey's Central Warehouse's charge of $500 to A-Z Moving to deliver the fixtures is considered part of its overall charge for storage.
Since the period of storage is 30 days or less, A-Z Moving's charge to Al's Clothes Store for the storage will be considered storage in transit and exempt as part of the nontaxable moving service. As a result, A-Z Moving cannot buy the storage from Joey's Central Warehouse for resale. Therefore, Joey's Central Warehouse's total charge of $1,750 ($1,250 + $500) to A-Z Moving is taxable.
Example 6: The store is ready in 37 days and Joey's Central Warehouse charges A-Z Moving $1,850 for the storage. A-Z Moving bills Al's Clothes Store a marked-up charge of $2,220 for the storage. Rather than complete delivery itself, A-Z Moving pays Joey's Central Warehouse an additional $500 to deliver the fixtures. Again, because the primary purpose of the transaction between Joey's Central Warehouse's and A-Z Moving is for storage, Joey's Central Warehouse's charge of $500 to A-Z Moving to deliver the fixtures is considered part of its overall taxable charge for storage.
Since the period of storage is more than 30 days, it is not considered storage in transit and A-Z Moving's charge to Al's Clothes Store for the storage is taxable. As a result, A-Z Moving can buy the storage for resale from Joey's Central Warehouse by issuing Form ST-120, Resale Certificate. In this case, Joey's Central Warehouse's charge of $500 to deliver the fixtures is considered part of A-Z Moving's purchase of storage for resale and is not taxable. A-Z Moving must collect sales tax from Al's Clothes Store on its total charge of $2,720 ($2,220 + $500).
Example 7: A-Z Moving's contract with Al's Clothes Store provides for the transport of the fixtures from Buffalo to New York City. It also provides that if the new store is not ready and the fixtures cannot be delivered when they arrive, Al's Clothes Store becomes responsible to arrange for storage of the fixtures and for final delivery of the fixtures once the store is ready. A-Z Moving's $7,500 charge to Al's Clothes Store is for a nontaxable moving service.
After the fixtures are dropped off by A-Z Moving at Joey's Central Warehouse, Joey's Central Warehouse bills Al's Clothes Store $50 per day for the storage and $500 to deliver the fixtures when the new store is ready.
Joey's Central Warehouse is selling taxable storage services and its entire charge to Al's Clothes Store is taxable regardless of the length of time of the storage. Because the primary purpose of the transaction between Al's Clothes Store and Joey's Central Warehouse is for storage, the $500 charge to deliver the fixtures is taxable as part of the overall charge for storage.
Sales to exempt entities
If the customer is an exempt governmental entity, the mover does not need to collect sales tax on its sales of any taxable storage services (i.e., storage for more than 30 days) provided the mover receives a governmental purchase order or a government contract to document the exempt sale. If the customer is an exempt organization claiming a sales tax exemption, the customer must give the mover or warehouser a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate, to verify the customer's exempt status. If the mover pays a third party to provide the storage, the mover can issue Form ST-120, Resale Certificate, to the storage provider to purchase the storage for resale. However, if the mover pays a third party to provide storage for a period of 30 days or less, that payment is subject to sales tax.
Packing materials
Materials sold to customers
Any sales of cartons, boxes, barrels, covers, crates, paper for padding, bubble wrap, Styrofoam peanuts, and like materials directly to a customer for use by that customer in packing are taxable if the customer takes possession of the materials in New York State. A mover that makes these sales must be registered for sales tax purposes. See Tax Bulletins Do I Need to Register for Sales Tax? (TB-ST-175) and How to Register for New York State Sales Tax (TB-ST-360).
Packing materials that are resold to the customer and become the property of the customer will not be subject to tax when purchased by the mover if the mover furnishes the supplier with a properly completed Form ST-120, Resale Certificate. A mover who pays tax on the purchase of packing materials may be entitled to a credit or refund of tax if those materials are later resold to and become the property of the mover's customer. See Tax Bulletin Sales Tax Credits (TB-ST-810).
If the customer is an exempt governmental entity, the mover does not need to collect sales tax on its sales of packing materials provided the mover receives a governmental purchase order or a government contract to document the exempt sale. If the customer is an exempt organization claiming a sales tax exemption, the customer must give the mover a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate, to verify the customer's exempt status.
Materials used by movers
All items used and consumed by a mover in providing moving services (e.g., tape, markers, paper for padding, bubble wrap, Styrofoam peanuts, cartons, boxes, etc.) are subject to tax at the time of purchase by the mover. If the mover purchases materials without paying sales tax (for example, the mover purchases these items from an out of state vendor who does not collect New York State and local sales taxes) and uses the materials as part of its moving services, the purchase price of the materials is subject to use tax at the rate in effect where the mover first uses the items. See Tax Bulletin Use Tax for Businesses (TB-ST-910).
Services provided by movers
The services of packing, unpacking, loading, and unloading goods, etc., by a mover are considered incidental to the moving services and are not taxable.
Charges for packing services provided in connection with a move into or out of permanent storage, when the mover is a third party and not the provider of the storage service, are considered part of the overall moving services.
Example 8: Mr. T has a large collection of antiques on display at his home. Mr. T's elderly mother-in-law is coming to live at his home. To make room for her, Mr. T must remove some of his antiques from his home. He contracts with DEF Storage to store his antiques. He separately contracts with Tom's Trucks to pack and transport the antiques to the storage facility. Mr. T's payment to DEF Storage for storage of the antiques is taxable, while his separate payment to Tom's Trucks for transportation is not taxable.
When a mover hires a third party to crate an item for transport, the entire charge by the third party to the mover is subject to sales tax. When the mover charges the customer for the crating services, the charge is part of the moving services and is not taxable.
Disassembly or disconnecting at origin, and reassembly or installation at destination
Certain belongings are disassembled or uninstalled before they are moved, or may require special packing or crating to be moved without being damaged. These items are then be reassembled or reinstalled at the customer's new location. In some instances, the mover's own employees will perform these services as part of the overall moving service. Other times, the mover may hire a third party to perform these services.
Disassembly and dismantling services
Separately stated and reasonable charges by the mover to its customer, or charges by a third party to the mover, for disassembly and dismantling services are not subject to sales tax.
Assembly and installation services
Whether separately stated charges by the mover to its customer for assembly or installation services performed inside New York State are subject to sales tax depends on the nature of the service performed. Similarly, the nature of the services performed determines whether charges by a third party to the mover for assembly or installation services are subject to tax.
If the property installed does not become an integral part of the real property at the customer's destination (e.g., beds, pianos, exercise machines, pool tables, etc.), charges by the mover to its customer, or charges by a third party to the mover, for the assembly or installation services are subject to sales tax.
However, if the property does become an integral part of the real property at the customer's destination (e.g., certain appliances, chandeliers, certain hot tub installations, etc.) the installation services may qualify as a capital improvement. See Publication 862, Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property, for more information on taxable and exempt installations.
Unpacking and removal of packing materials
Most household movers will unpack a customer's belongings at the customer's destination for an additional fee. This service usually includes the removal of boxes, packaging, and other packing materials once the unpacking is complete. The mover's service of unpacking a customer's belongings and removing any packing materials is considered part of the overall moving services and is not subject to sales tax.
If the mover hires a third party to remove packing materials, the charge by the third party to the mover is subject to sales tax at the rate in effect where the service is performed in New York State. When the mover passes these charges through to the customer, the charges are part of the overall moving services and are not taxable.
References and other useful information
Tax Law: Sections 1105(a) and 1105(c)
Memoranda:
TSB-M-82(22)S, Transportation and Related Services Provided by Movers
Bulletins:
Do I Need to Register for Sales Tax (TB-ST-175)
Household Movers and Warehousers - General (Permanent) Storage and Storage Pods (TB-ST-340)
How to Register for New York State Sales Tax (TB-ST-360)
Sales Tax Credits (TB-ST-810)
Use Tax for Businesses (TB-ST-910)