I am a Harman dealer and a retail hardware store owner here in New York so am familiar with the tax code. Bottom line is that you must pay tax on the stove itsself either through the contractor or directly when you purchase the furnace. You do not pay tax on the labor portion of the install. Here is the code read page 8.
If the contractor buys the furnace he must pay the tax but would include it with the price of the install so you don't pay the tax twice.http://www.tax.state.ny.us/pdf/publicat ... 62_401.pdf