Introduction
This bulletin provides information on New York State and local sales taxes (sales tax) as they apply to household movers, warehousers and other storage facilities when they provide storage services. This bulletin:
- describes the kinds of storage services typically provided by movers and warehousers, and
- explains when movers and warehousers must collect sales tax on these services.
See also Household Movers and Warehousers - Sales of moving services and related transactions (TB-ST-341) for more information on moving services, including information on storage in transit.
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.
Storage of tangible personal property is generally subject to sales tax in New York State. However, the rental of real property is not subject to sales tax. Also, storage services delivered to the purchaser outside of New York State are not subject to sales or use tax.
General (permanent) storage
General storage as described in this Tax Bulletin refers to storage services that are provided outside the context of a moving service. The purpose of a general storage transaction is to have property stored at a facility by the storage service provider for a period of time. Its purpose is not to have property stored temporarily in the process of being moved from point A to point B. See Household Movers and Warehousers - Sales of moving services and related transactions (TB-ST-341) for more information on moving services, including information on storage in transit.
Note: Self storage is discussed later in this bulletin under Sale of storage services vs. the rental of real property.
Taxability of storage services
When storage services are delivered inside New York State, the charge for the storage service is taxable. Storage services delivered outside New York State are not subject to New York State or local sales tax.
Separate charges associated with storage services
Separate charges listed as pull charges, warehouse labor, and pickup and delivery shown on the invoice for storage service are part of the taxable receipt for the storage service, regardless of the duration of the storage.
Location of storage services
Storage services are considered to be delivered at the location where the storage service provider takes possession of the property to be stored, without regard to the location of the storage facility itself. Therefore, where a storage service provider takes possession of property in New York, the sale is subject to New York State and local sales taxes. (See our Sales Tax Jurisdiction and Rate Lookup service to find correct sales tax rates and reporting jurisdictions.) Where a storage provider takes possession of property at a point outside New York State, no New York State sales tax is due.
Example 1: A homeowner needs to store some of his belongings for three weeks while part of his home is being remodeled. The storage provider picks up the customer's belongings at the customer's home, which is located in a different taxing jurisdiction from the actual storage facility. The storage provider must collect sales tax at the rate of tax in effect at the customer's home where the belongings are picked up.
Example 2: A storage provider accepts goods to be stored from customers at a central drop-off facility in New York State. The storage provider's actual storage facilities are located in several different New York State taxing jurisdictions as well as at locations in New Jersey. The storage provider transfers the goods to be stored to these various facilities based on the space available at any given time. The storage provider must charge its customers sales tax at the rate in effect at the central drop-off facility in New York State where it takes possession of the goods to be stored, even if the facility where the goods are actually stored is in a different New York taxing jurisdiction or at a location in New Jersey.
Pickup and Delivery
As stated above, charges for transporting property to storage and returning it from storage are generally included in the taxable receipt for the overall storage service when the party providing the transport service is also the provider of the storage service. This is because the primary purpose of the transaction is the storage of the property and not transportation.
Again, storage as described in this Tax Bulletin is different than a storage service provided in conjunction with a move, where the purpose of the transaction for the customer is the moving service, not a storage service. 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 a period of 30 days or less is not subject to sales tax, provided that the service is provided by a mover in connection with the transportation of household goods by the mover. If the storage in transit period exceeds 30 days, the entire charge for the storage is subject to sales tax at 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.
If a customer contracts separately with an unrelated third party to transport the customer's property to or from a storage facility, the separately contracted charge for transportation is not subject to sales tax.
Example 3: A law firm is having its offices remodeled. It contracts with XYZ Storage to store its furniture and files during construction and to return the property when the work is completed. The charge by XYZ Storage for the storage is $2,000. In addition to the $2,000 charge for storage, XYZ Storage charges $250 to pick up and return the property being stored. The $250 charge is taxable as part of XYZ Storage's overall charge for storage.
Example 4: 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 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.
Example 5: Mr. A rents an apartment in Albany, New York. Mr. A's employer is transferring him to France for three years. Mr. A contracts with ABC Warehouse to store his furniture and other belongings while he is away. In addition to a monthly $50 charge for storage, ABC Warehouse charges $100 to come and pick up Mr. A's property. The $100 charge is taxable as part of ABC Warehouse's overall charge for storage.
Example 6: 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 taxable. 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 the transaction. Examples 7-11 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 7: 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 8: 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 considered storage in transit and A-Z Moving's charge of $2,220 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. A-Z Moving must collect sales tax from Al's Clothes Store on its $2,220 charge for storage.
Example 9: 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 10: 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 11: 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 storage provider does not need to collect sales tax on its sales of storage services, provided the storage provider 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 storage provider a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate, to verify the customer's exempt status.
Sale of storage services vs. the rental of real property
Charges for storage services are subject to state and local sales tax as stated above. However, charges for the rental or lease of real property, even though used by the tenant for storing property, are not subject to sales tax. Indicators of a rental or lease of real property include:
- the tenant contracts for a certain amount of footage in a specific location;
- the tenant has unlimited control of access to the space and exclusive possession of the space;
- the tenant's possession and control of the space must be to the exclusion of the proprietor (as described below);
- the tenant is allowed to supply racks, cabinets, and other facilities for the tenant's own use in the leased space; and
- the proprietor does not provide any additional services that require the tenant to give up possession and control of his or her property to the proprietor (such as receiving, handling, storing, or forwarding of the tenant's personal property).
Hours of availability
Where a self-storage facility is not open to customers at all hours, a customer is considered to have unlimited control as long as the customer has access to the space during hours when other similar commercial storage facilities are generally accessible.
Example 12: A self-storage facility is surrounded by a fence with a gate with a keypad lock. For safety reasons, the owner of the facility allows access only from 8:00 am through 5:00 pm each day. No overnight access is allowed and the keypad lock will not open the gate during off hours. The facility's customers are considered to have unlimited control because daytime-only access is similar to when other commercial storage facilities are generally accessible.
Exclusive possession
The tenant's exclusive possession of the space may be established by means of a lock (either the proprietor's or the tenant's) on the door of the enclosed space, under the control of the tenant. Exclusive possession will still be recognized if the proprietor has a duplicate or master key and, as a result, has access to the space, but the written lease agreement specifically provides that the proprietor has no right of access to the space during the term of the rental except to collect rent, make necessary repairs, or in an emergency.
Storage services
The lease of storage space will be exempt only if it does not actually constitute a storage service. As mentioned above, a key element in providing a storage service is the relinquishment of possession and control of the stored goods by the tenant to the proprietor. If the proprietor provides additional services (such as receiving, handling, storing, or forwarding of the tenant's personal property) that require the tenant to give up possession and control of the stored goods to the proprietor, a lease may be deemed to constitute a taxable storage service.
When the owner of the goods is present during the provision of services such as unloading, handling, or moving the goods and directs the actions of the individuals performing the labor, the owner has not relinquished possession and control of the goods and the lease will not be deemed to constitute a taxable storage service.
When the owner of the goods is not present when the labor is performed, possession and control of the goods passes to the proprietor and the lease will be deemed to constitute a taxable storage service.
When the agreement between the proprietor and customer indicates that the customer has purchased storage services rather than rented or leased real property, any charge by the proprietor for loading, unloading, or rearranging the customer's property is part of the taxable storage services and is subject to sales tax. See TSB M-86(3)S, Taxable Status of the Rental of Self-Service Mini-Storage Units, for more information.
Portable storage and moving containers
The use of portable storage and moving containers by a customer on the customer's premises is a rental of tangible personal property subject to sales tax if the customer's premises are located in New York State. Charges for initial delivery of an empty container to the customer and for pick-up of the container for return are part of the rental charge subject to sales tax.
The charge for picking up a loaded container at a customer's location and delivering it to a storage facility, and the charge for delivering a loaded container from a storage facility to a customer's location, are subject to sales tax as part of a taxable storage service.
However, the charge for moving a container from the customer's location to a different location, without delivery to a storage facility, is a charge for a moving service and is not subject to tax if the charge is reasonable and is separately stated on the bill or invoice given to the customer.
References and other useful information
Tax Law: Sections 1105(a) and 1105(c)
Regulations: Section 527.6
Memorandum:
TSB-M-82(22)S, Transportation and Related Services Provided by Movers
TSB M-86(3)S, Taxable Status of the Rental of Self-Service Mini Storage Units
Bulletins:
Household Movers and Warehousers - Sales of moving services and related transactions (TB-ST-341)