N.Y. Comp. Codes R. & Regs. tit. 20 § 527.4
Tax Law, § 1105(c)(2)
Producing means the manufacture of a product from one or more raw materials and any process in which a raw material loses its identity when the production process is completed.
Example 1:
An individual purchases tweed cloth from a retail textile store and has a tailor make a suit for the individual to wear. The tailor's charge for the service of making the suit is taxable.
Example 2:
A corporation purchases lumber from a mill and has the lumber taken to a cabinetmaker who uses the lumber to build a bookcase for use in its corporate offices. The cabinetmaker's charge to build the bookcase is taxable.
Fabricating is the alteration or modification of tangible personal property to the specifications of the purchaser of the service, without changing the identity of the property. However, alterations to clothing do not constitute fabricating; rather they constitute tailoring services and are excluded from tax. (See section 527.5[b][3] of this Part).
Example 1:
An individual purchases sheet metal from a supplier and takes the sheet metal to a metal shop to be cut, perforated, and bent to the individual's specifications, for the individual's own use. The metal shop's charge for these services is taxable.
Example 2:
A lumber yard charges a corporation for cutting 4 foot by 8 foot sheets of plywood into 2 foot by 2 foot squares. The plywood had been purchased for the purchaser's own use. The lumber yard's charge for the cutting services is taxable. (If the lumber yard sold the plywood to the corporation and cut it into squares at the time of sale, then its charge to cut the plywood is taxable as part of the sale of tangible personal property, pursuant to paragraph [a][4] of this section.)
Processing is the performance of any service on tangible personal property for the owner which effects a change in the nature, shape, or form of the property.
Example 1:
A person raises a hog for his own food. He has the hog slaughtered dressed, cut and wrapped by a butcher. The butcher's services are taxable.
Example 2:
The developing of film by a photographic laboratory is a taxable processing service.
Example 3:
A person cuts, edits, dubs sound, and adds titles to convert exposed and developed film footage into a completed film. Such procedures constitute taxable processing of the film.
Example 4:
A firm which owns existing computer programs of the metal bar type and the imprinted electronic tape type asks a service organization to change the programs. For the metal bar type, the change is effected by rearranging, adding or removing metal pins. For the taped program, the change is effected by altering the imprint on the tape. The services provided constitute processing the metal bars and tapes.
Example 1:
A printer prints a form letter on letterhead stationery furnished by his customer. The printer's services are taxable.
Example 2:
A firm addresses envelopes furnished by its customer. The addressing services are a taxable printing service.
Example 3:
A printer prints business calling cards for his customer, supplying both the card and the service of printing. This is the sale of tangible personal property, the total amount being taxable as such. (See section 526.6 of this Title.)
Example 4:
A corporation has its bonds printed by a printer, and has its supplier furnish the embossed paper to the printer. The printer's services are taxable, whether or not possession of the embossed paper has passed to the corporation, and regardless of the fact that the embossed paper has been supplied to the printer by a third party, on behalf of the corporation.
Example 1:
A manufacturer of home appliances has certain of the component appliance parts galvanized by a plating firm. The service of galvanizing is not taxable since it is being performed on a product which will be sold by the manufacturer.
Example 2:
A plating company purchases zinc for galvanizing steel which is furnished by its customer. The zinc becomes part of the steel. The purchase of the zinc by the plating company is a purchase for resale which is not subject to tax.
N.Y. Comp. Codes R. & Regs. Tit. 20 § 527.4