In Matters of Andrew Costabile, Ralph Costabile & Michael Delponte, DTA Nos. 826105-827107 (N.Y.S. Tax App. Trib. Apr. 14, 2017), the New York State Tax Appeals Tribunal sustained the Department’s imposition of use tax on materials purchased by a business that acted both as a retailer of building products used in kitchens and baths and as a contractor performing installations of its products for some customers. While the business was accustomed to purchasing materials for resale, which would be subject to exclusion from the definition of retail sales, Tax Law § 1105(c)(5) provides that sale of tangible personal property to a contractor is a retail sale subject to tax, and the Tribunal rejected the arguments that the business should not be liable for the tax because the business owners self-identified as retailers and did not know at the time of purchase whether the materials would be resold as merchandise or used by the business acting as a contractor. The Tribunal found that the “clear language of the law and regulations” required that, where materials are used in the performance of capital improvements, the purchase of the materials is subject to tax and that the business could have accounted for the tax expense when providing estimates for its capital improvement projects.