The purpose of these information is to provide general guidance regarding a wide array of services that are taxable under sections 1105(c)(1) or 1105(c)(9), unless eligible for some other exclusion or exemption in the Tax Law. In some cases, the determination of whether or not a service is a taxable information service requires a fact-intensive examination of the nature of the service being sold and what is being paid for by the purchaser.
- Section 1105(c)(1) imposes sales tax on receipts from the service of furnishing information by printed, mimeographed or multigraphed matter, or by duplicating written or printed matter in any other manner. Services subject to tax under this section include the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons. Certain information services are excluded from tax. Those services include the furnishing of information that is personal or individual in nature and that is not or may not be substantially incorporated in reports furnished to other persons. Also excluded from sales tax are ". . . the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, radio broadcasters and television broadcasters in the collection and dissemination of news. . . ." Additionally, section 1105(c)(1) provides that meteorological services are excluded from tax. Further, the sales tax does not apply to receipts from the sale of information that is purchased for resale.
Section 1105(c)(9)(i) of the Tax Law imposes sales tax on the sale of an information service that is furnished, provided, or delivered by means of telephony or telegraphy or telephone or telegraph service (whether intrastate or interstate) of whatever nature, such as information services provided through 800 or 900 numbers, mass announcement services, or interactive information network services. However, the tax imposed by section 1105(c)(9) does not apply to an information service unless it would otherwise be subject to taxation under section 1105(c)(1) of the Tax Law if it were furnished by printed, mimeographed, or multigraphed matter, or by duplicating written or printed matter in any other manner. Section 1105(c)(9)(ii) of the Tax Law imposes an additional tax at the rate of 5% on the sale of an information service subject to tax under section 1105(c)(9)(i) that is received by the customer exclusively in an aural (i.e., audible)
manner. Tax Department policy regarding taxable information services a wide variety of businesses are engaged in furnishing taxable information services. As a general rule, furnishing information created or generated from a common database, or information that is widely accessible, is a taxable information service. The sale of a report that uses or relies on statistical models or historical data is also generally considered to be a taxable information service, as is the service of gathering information from a variety of sources and recasting that information into a report. The resulting reports are not considered personal or individual in nature because they contain information that can be incorporated into reports furnished to other persons. A sale includes the sale of a single report and also includes an ongoing payment for access to information, such as a subscription. Whether a service qualifies as an information service depends on its primary function. The fact that one element of a service is an information service does not mean that the service as a whole is taxable as an information service. The Tax Department will determine a service’s primary function based on an examination of the nature of the service being sold and what is being paid for by the purchaser. How the buyer subsequently uses the information purchased is not relevant to this inquiry. If a customer’s chief purpose in paying for a service is to receive information from that service, whether it is the price of a stock, the chain of ownership of real property, or contact information for a person meeting certain qualifications, the service as a whole qualifies as an information service. This result holds true even if the customer receives other benefits as part of the service.
A service is taxable as an information service if its primary function is one of the following:
• Advertising rate reports for a given medium or market;
• Archive services (examples include sales of access to historical information, documents and manuscripts, archived articles or journals);
• College selection services and financial assistance information services (examples include college and scholarship search services);
• Consumer product reports, such as product evaluations;
• Credit monitoring services;
• Directory and mailing list services (examples include the sale of customer lists, lists of
postal mailing addresses, lists of e-mail addresses, lists of bad checks, telephone
directories, business directories, collections of fact, price lists and almanacs, collections
or compilations of proprietary drug trials, and compilations of legal case results);
• Employment history reports;
• employment placement reports and employment registries (examples include
employment databases, babysitting registries, and model registries), but not charges
merely to post information;
• genealogical research services;
• Information furnished by credit reporting bureaus;
• Internet-based data and Web search services (examples include Internet entertainment
information sites, Internet sports information sites, Internet newsletters, and Internet
search portals and search Web sites);
• Investment reports and services (examples include stock market reports and forecasts,
mutual fund rating services, and stock quotation services);
• Mtching or networking services (examples include online dating services, physician
matching services, and contractor locator services), but not charges merely to post
information;
• News clipping services (examples include services providing individual news or
magazine articles on a given subject);
• News letter subscriptions (however, newspapers and periodicals are not taxable);
• Online telephone or address directory services;
• Patent search services (unless provided by an attorney in the practice of law);
• Pedigree record services (for example, an online directory);
• People or parts locator services (examples include online classmate locator services or
online vintage car parts locator services);
• Public records furnished (electronically or in paper format) by a private entity, such as a
document retrieval service (examples include real property deeds, motor vehicle
accident or violation reports, etc.; however, public records sold by a governmental
entity, such as a county clerk, is not subject to tax; for more information, see Public
documents sold by private entities below);
• Real property information databases (but if the database provides only access to public
documents as such see Public documents sold by private entities below);
• Reporting services that compile news stories or issues related to a certain topic;
• Reports or databases of information on movies, books, or other media;
• Sports scouting reports;
• Sports statistics or athletic performance reports (examples include horse racing
handicapping or tip sheets, and fantasy baseball or fantasy football reports); and
• Survey results (examples include marketing and public opinion research reports).
The absence of a service from this list does not mean that it is not subject to tax under section 1105(c)(1) or 1105(c)(9).
Note: Certificate of authority is required to start business in the state of New York.
