Form Tsb-M-07(3)s - Sales And Use Tax Treatment Of Wood Pellets And Other Similar Products Used For Home Heating Purposes -New York State Department Of Taxation And Finance
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1
2New York State Department of Taxation and Finance
TSB-M-07(3)S
Office of Tax Policy Analysis
Sales Tax
Technical Services Division
May 16, 2007
Sales and Use Tax Treatment of Wood Pellets
and Other Similar Products Used For
Home Heating Purposes
This memorandum is intended to clarify the Tax Department’s policy on the sales and use
tax (sales tax) treatment of wood pellets, other compressed wood products, and non-wood
products designed to be used in stoves or fireplaces used for residential heating purposes.
Section 1105-A of the Tax Law provides that certain residential energy sources and
services are not subject to the New York State sales and use tax. Under that section, the
following tangible personal property and services used for residential purposes constitute
residential energy sources and services not subject to the state sales and use tax.
• natural gas;
• propane sold in containers of 100 pounds or more;
• electricity;
• steam;
• gas, electric, and steam services;
• fuel oil (except diesel motor fuel);
• coal; and
• wood (for heating purposes only).
It is the Department’s position that wood pellets and other compressed wood products
designed to be used in a stove or fireplace used for residential heating purposes constitute wood
for purposes of Section 1105-A of the Tax Law. Accordingly, purchases of these products for
residential heating purposes are exempt from the New York State sales tax.
Counties and cities (localities) that impose a local sales tax may choose to either tax or
exempt residential energy sources and services. The localities that choose to impose a local tax
on residential energy sources and services may further choose to tax these sources and services at
their regular local rate or at a reduced local rate. Part 2 of Publication 718-R, Local Sales and
Use Tax Rates on Residential Energy Sources and Services, lists the jurisdictions that impose a
local tax on residential energy sources and services with the applicable tax rate. Localities not
listed in Publication 718-R do not impose a local tax on residential energy sources and services.
W A Harriman Campus, Albany NY 12227
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