Broadway Companies Not Subject to New York City Commercial Rent Tax on Billboard Ads

On April 22, 2026, the Chief Administrative Law Judge (ALJ) of the New York City Tax Appeals Tribunal concluded that four Broadway production companies (“Companies”) were not liable for New York City Commercial Rent Tax (CRT) on amounts paid for advertising space on billboards in Manhattan.¹ In reaching this determination, the ALJ noted that the Companies did not have access to the billboards and instead paid for advertising services.

The CRT is imposed on every tenant of taxable premises. A tenant is defined as a person paying or required to pay rent for premises as a lessee, sublessee, licensee, or concessionaire. Taxable premises include advertising signs located on top of or outside buildings or other structures.

The Commissioner of Finance (“Commissioner”) maintained that placement of the Companies’ advertising copy on the billboards constituted a license for the use of taxable premises and that the related payments were taxable rent under the CRT. The Commissioner noted that the contracts called for display of the Companies’ advertising copy on specific billboards for designated periods of time. The Companies countered that the contracts were for advertising services and did not constitute a lease or license for the use of taxable premises, emphasizing that they had no ability to access the billboards, either physically or virtually. The ALJ ruled in favor of the Companies.

The ALJ observed that, in precedent cited by the Commissioner, the payors had physical access to, and control over, space that the payee owned or leased. In fact, the ALJ noted that the Commissioner cited no case upholding the CRT against a payor as a tenant where the payor lacked access to the premises. Without access to the billboards, the Companies cannot be considered licensees. The ALJ concluded that the Companies paid for advertising services rather than for the use of premises subject to the CRT.

Ryan’s Take and Action Steps

The ALJ provided clear guidance regarding what triggers the CRT: access to taxable premises, whether physical or virtual. In this instance, the Companies controlled only the content of the advertisement. Because advertising services are generally not subject to New York sales tax, this decision is a favorable development for the taxpayers involved. Persons paying for billboard advertising in New York City should review their contracts to determine whether they have access to the billboards and, if not, whether they are paying the CRT contrary to the ALJ’s decision. The Commissioner may appeal the decision to the full Tax Appeals Tribunal.

¹ In the Matter of the Petition of The Phantom Company, LP, et al., NYC Tax Appeals Tribunal, Det. Nos. TAT (H) 20-15 (CR), et seq. (April 22, 2026).

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