Every year or so the New York State Tax Appeals Tribunal is forced to weigh in on whether a particular service is subject to sales tax as an “information service” or is a nontaxable consulting service. Since consulting services almost inevitably involve the gathering and providing of information relevant to the consultation, the issue arises in almost every case. The recent Tribunal decision in Dynamic Logic, DTA No. 828619 (Jan. 20, 2022) provides another example of the difficulties in analyzing these transactions.

Dynamic Logic provided various services to its clients that measure the effectiveness of their advertisements, as well as advice and recommendations to improve their effectiveness. It used various methods and technology to survey 600-800 consumers who have or have not seen a particular ad (often by placing so-called “cookies” on the device of the selected consumers that can measure when or if ads have been viewed). Dynamic then divided the consumers into two groups: one group that had been exposed to the ad in question, and a second group—the control group that had not.

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