New York: How to Tax a Parking Space
- Nov 15, 2012 | Gail Cole
Parking in New York City isn't exactly priceless, but it can certainly feel that way. Lodging that comes with a parking space is a premium. Space is so precious in New York City that some people are even living in parking spaces.
If your New York City cooperative housing comes with parking, is that parking subject to state and city sales taxes? It's a worthwhile question, since "the combined rate of state and city sales taxes on receipts from parking in Manhattan is 18 3/8%."
The issue was brought to the New York Department of Taxation and Finance by a cooperative housing development in Manhattan (the "Association") which has "residential apartments in multiple buildings within a defined geographical area bounded by City streets, and a parking facility located within the development." The Parking Facility is leased to a Parking Facility Operator and is open to members, non-member residents, and the general public.
The Association is exclusively owned by members, who own the shares allocated to their apartments and who pay monthly maintenance charges to the Association. Members are party to leases or occupancy agreements with the Association.
Members and non-member residents pay a reduced parking rate and "[p]arking charges are billed by the Association to the members' monthly maintenance bills."
The New York State Legislation has determined that "a homeowner should not be required to pay sales tax for parking a car in a garage which is part of his or her home… ." Therefore, pursuant to New York Law, homeowner's and homeowner associations may qualify for an "…exclusion from payment of New York State and New York City motor vehicle parking, garaging, or storing sales taxes… ."
In the recent Advisory Opinion, the New York Department of Taxation reminds that in order "[t]o qualify for the exclusion from State and New York City parking taxes, a homeowner's association member must make payment to a properly constituted homeowner's association or its parking vendor for the privilege of parking in the association's colocated parking facility." It goes on to assert that "co-op owners are to be treated as homeowners… ."
A non-member resident who parks in the Parking Facility is not subject to state and city sales taxes if the parking charges are paid for by the member with whom he/she lives.
A non-member resident who parks in the Parking Facility is subject to state and city sales taxes if he/she pays the parking charges, even though the charges are billed to the member.
The general public is subject to state and city sales taxes on the parking charges.
Applicable New York Tax Laws: Sections 1105, 1109, 1210(a)(4)(ii) and 1212-A(a)(1).
Applicable New York City Administrative Code: Sections 11-2001(a) and 11-2049.