X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Joseph Lipari and Aaron S. Gaynor Joseph Lipari and Aaron S. Gaynor

For many years, we have periodically reminded readers of this column of the uncertainties encountered in deciding whether transactions in the “knowledge” industry are subject to New York sales tax, a tax that was originally designed to tax the sales of tangible personal property. Nevertheless, as the world marches into the third decade of widely available electronic resources, distinguishing among consulting services, information services, and the provision of software, and then applying the differing sales tax rules to them, becomes only more difficult. The recent administrative law judge determination in MarketShare Partners, DTA No. 828562 (N.Y. Div. Tax App., Dec. 3, 2020) provides a rich text for those trying to classify a business as fitting into one of these categories.

N.Y. Tax Law §1105(a) generally imposes sales tax on the sale of “tangible personal property,” which, under §1101(b)(6), includes “pre-written computer software … regardless of the medium by means of which such software is conveyed … .” Services are subject to sales tax only to the extent set forth in the statute. §§1105(c)(1) and (9) generally impose sales tax on “information services.” The law provides an exception in the case of “information which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons.” Consulting services are not specified as taxable, and, therefore, are not taxable.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Dig Deeper

Law Firms Mentioned

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.