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 Page 2

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TSB-M-07(3)S

Sales Tax

May 16, 2007

Purchases of wood pellets and other compressed wood products designed to be used in a

stove or fireplace used for residential heating purposes are also exempt from the local tax in

those localities that exempt residential energy sources and services. Purchases of these products

are subject to tax at the rate listed in Part 2 of Publication 718-R in those localities that tax

energy sources and services. Vendors must collect tax at the rate in effect in the locality where

the pellets or compressed wood products are delivered to the customer. A vendor must report the

amount of local sales tax collected, if any, on sales of wood pellets and other compressed wood

products sold for residential heating purposes on Schedule B, Part 2, of Form ST-100.3,

Quarterly Schedule B - Consumer's Utility and Fuel Taxes for Residential and Nonresidential

Gas, Electricity, Refrigeration, and Steam, and Sales of Heating Fuels. (If a customer uses such

wood products in a locality other than the one where they were purchased or delivered, the

customer may owe use tax. See Publication 774, Purchaser’s Obligations to Pay Sales and Use

Taxes Directly to the Tax Department–Questions and Answers, for rules relating to use tax.)

The sales tax treatment of wood pellets and compressed wood products described above

does not apply to other pellets or other compressed products that are made from non-wood

material, or other non-wood products, such as corn or corn kernels. Vendors must collect sales

tax on receipts from the sales of these non-wood products at the combined New York State sales

tax rate and regular local sales tax rate in the locality where the products are delivered to the

customer. (See Publication 718, New York State Sales and Use Tax Rates by Jurisdiction, for

these rates.) (If a customer uses these non-wood products in a locality other than the one where

they were purchased or delivered, the customer may owe use tax. See Publication 774, for rules

relating to use tax.)

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Parent category: Financial