We own a car wash business. We have a coin-operated car wash system in place as well as personnel on site that can manually clean and wax the vehicles. Are we suppose to collect sales tax for both services?

ANSWER

The BIDaWIZ Team's Answer:

Your car wash is required to collect sales tax for the car wash services provided by personnel such as washing, waxing and vacuuming. However, if the vehicle is cleaned solely with automated equipment, then your business is exempt from collecting sales tax. If your business issues gift cards to clients, no sales tax should be collected at the time of purchasing the gift. However, if the gift card is later used for a taxable service, then you should be collecting sales tax. This is referenced in New York State tax Law 1115(t).