Which of a research-and-advisory firm's various services — subscription research, white papers, reprints, teleforums, in-person presentations, and strategic consulting — are subject to New York sales tax when delivered to a customer in New York?

Plain-English summary

PricewaterhouseCoopers asked this question on behalf of a Massachusetts-headquartered research and advisory firm ("Company") that opened a small New York office in 2000. Company sells a bundle of related offerings to clients in banking, securities, insurance, technology, and professional services: a "Continuous Advisory Service" subscription (research notes across subscribed topics, access to an online research library and "web IDs," direct analyst access by phone/email/in-person, conference passes, and teleconferencing access); reprints of previously published research; live "teleforum" teleconference presentations; in-person presentations tailored to a client's chosen topic; custom "white papers"; and strategic management consulting. Charges are separately stated by category on Company's invoices.

The Department worked through each line item using two core distinctions: whether information is "personal or individual" to one client (versus shared with many clients and thus taxable as an information service), and whether a service is even an enumerated taxable category at all under Article 28.

• Continuous Advisory Service subscription: taxable. The research notes and online library are identical content delivered to many subscribing clients — the hallmark of a taxable information service — so the whole subscription bundle is taxable unless its nontaxable pieces (like some of the analyst-access components) are separately billed.
• Reprints: taxable, whether delivered electronically or in hard copy, for the same reason — the underlying content isn't personal or individual to one client.
• White papers: it depends on the content. A white paper genuinely researched and written just for one client, not drawn from or destined for a shared report, escapes tax as a personal/individual consulting deliverable. But a white paper assembled from Company's existing database or prior white papers — content that is or may be reused in reports to other clients — is a taxable information service.
• Teleforums: also split by content. If the presentation is truly personalized consulting for that client, it's not taxable; but general-nature information delivered "by means of telephony" is taxed under the specific telephony/telegraphy information-service provision, § 1105(c)(9), even though the same content delivered on paper would just be a straightforward § 1105(c)(1) information service.
• In-person presentations and strategic management consulting services: not taxable at all — these aren't enumerated taxable services under Article 28.

Two closing rules tie it together: where taxable and nontaxable services are bundled into one undifferentiated charge, the whole thing is taxable unless the nontaxable portion is separately stated, reasonably priced, and could be purchased on its own. And because Company now has a physical office in New York, it's required to register and collect/remit tax on all its taxable New York sales — its prior practice of traveling in from out of state to cover New York clients no longer avoids that registration obligation.

What this means for you

Research, analyst, and advisory firms

Draw a clear content line between "shared/generic" research (taxable information service) and "genuinely client-specific" deliverables (not taxable) — and bill them as genuinely separate, reasonably priced line items if you want the nontaxable portion to survive on its own.

Consulting firms bundling subscriptions with advisory access

A subscription bundle that mixes a taxable information-service core (shared research/database access) with nontaxable add-ons (analyst access, conference passes) is taxable in its entirety unless the nontaxable pieces are separately and reasonably priced — bundling erases the distinction.

Accountants and tax professionals

Note the telephony wrinkle for teleforums: general-nature information delivered live by phone/teleconference is taxed under § 1105(c)(9) specifically because it would be taxable if delivered in printed form under § 1105(c)(1) — the delivery method (telephony) doesn't create new taxability, it just extends the existing information-service tax to a live/oral delivery channel.

Common questions

Q: Is all research content sold by subscription automatically taxable?
A: If it's the same content delivered to multiple subscribing clients, yes — that's the core information-services tax. Content genuinely personalized to one client and not reused elsewhere can escape tax.

Q: Are live conference calls or webinars treated differently from written reports with the same content?
A: They can be — general-nature information delivered live by telephony is taxed under a separate telephony-specific provision (§ 1105(c)(9)), but only because the same content would already be taxable if delivered in printed form.

Q: Does having even a small local office change a company's sales tax obligations?
A: Yes — maintaining any physical place of business in New York (even a two-to-four person office) establishes vendor status requiring registration and collection of tax on taxable New York sales, regardless of how sales were previously handled from out of state.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(8) (vendor definition)
• Tax Law § 1105(c)(1) (information services); § 1105(c)(9) (information/entertainment services via telephony)
• 20 NYCRR § 525.2(a)(3) (destination tax principle)

Prior rulings referenced:

• Economic Cycle Research Institute, Inc., TSB-A-97(42)S
• Crowley Webb & Associates, TSB-A-95(2)S
• Hodgson, Russ, Andrews, Woods and Goodyear, TSB-A-92(31)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2003.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a03_11s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-03(11)S
Sales Tax
March 25, 2003

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S020312F

On March 12, 2002, the Department of Taxation and Finance received a Petition for
Advisory Opinion from PricewaterhouseCoopers LLP, by Linda Velez, 1301 Avenue of Americas,
Room 7W-176, New York, New York 10019.
The issue raised by Petitioner, PricewaterhouseCoopers LLP, is whether services provided
by Company X (hereinafter Company), which include analyst consultation and research services,
are subject to sales and compensating use tax if delivered to a customer in New York.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Company is a research and advisory firm headquartered in Massachusetts. Company's
services include the sale of subscriptions to research information prepared by Company, access to
Company's online research library, presentations, telephone conference calls, white papers that are
provided via hard copy or electronically, and strategic management consulting services. In
providing these services, Company's analysts may travel to client locations throughout the United
States.
Clients benefit from Company research and analysis in several ways. The research
subscription component of its advisory services delivers research online to registered Web users of
client organizations, providing them with ongoing coverage in a wide range of topics. In addition,
clients are encouraged to take advantage of direct access to Company's analysts, whether by
telephone, through e-mail, or in face-to-face meetings, for in-depth discussions on topics covered
in each service's research.
Company opened a small office in New York in August 2000 which currently maintains a
staff of two employees. The maximum number of employees at this location has been four. Prior
to Company opening this office, representatives would travel into the State to cover the New York
territory.
Company’s customers are in various industries, and include banks, securities and investment
firms, insurance companies, technology firms, and professional services firms. Company separately
states its charges on its invoices as follows:
Continuous Advisory Service: Company provides a subscription service that includes
research notes from Company's research catalog in subscribed subject areas; access to
Company's research analysts; "web IDs" to access Company's online research library;
specific inquiries of research analysts; on-site meetings or presentations with analysts; passes
to Company's annual users conference; and access to live teleconferencing events on specific
issues affecting business technology strategies.

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The information provided in the subscription service is provided to multiple clients.
Clients not only receive access to the current research produced during their subscription
period, but they are also entitled to receive the historical catalogue of research produced for
their appropriately subscribed services.
Company delivers a portion of its tangible subscription materials into the State by
common carrier and will also send information electronically via the Internet. Company
began its electronic delivery in 1994 using Lotus Notes and delivery via the Internet in 1996.
For most clients, the preferred method of delivery is via the Internet and the value of a
subscription centers on receiving access to Company's research database rather than
receiving tangible copies of new research analysis. For example, a subscription may include
access for 100 of a client's employees to Company's research database and the client would
receive only a single tangible copy of new research analysis prepared by Company.
Accordingly, for most customers the value of the tangible copies of research analysis
received is minimal compared to the value of receiving access to Company's database.
Reprints: Copies of previously published research notes are sent to customers either
electronically via the Internet, or in hard copy.
Teleforums: Live teleconferencing events are produced featuring presentations by
Company's analysts on specific issues affecting business technology strategies for customers
doing business in financial services. The teleforum lasts 60 minutes and includes a 30-40
minute presentation by Company's analysts and a subsequent question and answer session.
Presentations: In person presentations are made by Company analysts on a topic
determined by the client. Company prepares all the research, conducts the analysis,
assembles any handouts and delivers the presentation. Generally, the presentations are held
at the client's location or at a conference sponsored by the client.
White Papers: Company prepares white papers that offer in depth analysis on
technology, products, or issues and how such items may impact the client. Company
prepares the white papers for a client on a specific topic chosen by the client.
Strategic Management Consulting Services: Offers specific advice and insight
relative to strategic planning including competitive market assessments, best practice
reviews, and technology strategy assessments.
Applicable Law and Regulations
Section 1101(b)(8) of the Tax Law provides, in part:
Vendor. (i) The term "vendor" includes:

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Sales Tax
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(A) A person making sales of tangible personal property or services, the
receipts from which are taxed by this article;
(B) A person maintaining a place of business in the state and making sales,
whether at such place of business or elsewhere, to persons within the state of tangible
personal property or services, the use of which is taxed by this article;
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax
On and after June first, nineteen hundred seventy-one, there is hereby
imposed and there shall be paid a tax of four percent upon:
(a) The receipts from every retail sale of tangible personal property, except
as otherwise provided in this article.
*

*

*

(c) The receipts from every sale, except for resale, of the following services:
(1) The furnishing of information by printed, mimeographed or multigraphed
matter or by duplicating written or printed matter in any other manner, including the
services of collecting, compiling or analyzing information of any kind or nature and
furnishing reports thereof to other persons, but excluding the furnishing 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 . . . .
*

*

*

(9) (i) The furnishing or provision of an entertainment service or of an
information service (but not an information service subject to tax under paragraph
one of this subdivision), which 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 entertainment or information services
provided through 800 or 900 numbers or mass announcement services or interactive
information network services. Provided, however, that in no event (i) shall the
furnishing or provision of an information service be taxed under this paragraph
unless it would otherwise be subject to taxation under paragraph one of this
subdivision if it were furnished by printed, mimeographed or multigraphed matter
or by duplicating written or printed matter in any other manner nor (ii) shall the
provision of cable television service to customers be taxed under this paragraph.

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Sales Tax
March 25, 2003
(ii) Notwithstanding the rate and date set forth in the opening undesignated
paragraph of this section and notwithstanding the opening undesignated paragraph
of this subdivision, on and after September first, nineteen hundred ninety-three, in
addition to any other tax imposed under this section, and in addition to any other tax
or fee imposed under any other provision of law, there is hereby imposed and there
shall be paid an additional tax at the rate of five percent upon the receipts which are
subject to tax under subparagraph (i) of this paragraph on the furnishing or provision
of an entertainment or information service which is received by the customer
exclusively in an aural manner. Such additional tax shall not be imposed by section
eleven hundred seven, eleven hundred eight or eleven hundred nine of this article and
shall not be included among the taxes authorized to be imposed pursuant to the
authority of article twenty-nine of this chapter.
Section 525.2(a)(3) of the Sales and Use Tax Regulations provides:
Except as specifically provided otherwise, the sales tax is a “destination tax.”
The point of delivery or point at which possession is transferred by the vendor to the
purchaser, or the purchaser's designee, controls both the tax incidence and the tax
rate.
Opinion
Company provides a number of different services to its clients. Company’s Continuous
Advisory Service includes a subscription service to Company’s research notes, access to Company’s
on-line research library, and other services such as on-site meetings or presentations with analysts
and access to teleconferences. Providing Company’s clients with a subscription service to
Company’s research notes or on-line research library is a taxable information service described in
Section 1105(c)(1) of the Tax Law. This service provides identical information to all customers.
Such information is not personal or individual in nature and is incorporated into reports furnished
to others. Accordingly, such sales are subject to sales tax pursuant to Section 1105(c)(1) of the Tax
Law if delivered to a customer in New York. Although some of the other services included in the
Continuous Advisory Service may not be enumerated taxable services, the entire charge for the
Continuous Advisory Service is taxable if the charges for the taxable and nontaxable services are
not separately stated. See Economic Cycle Research Institute, Inc., Adv Op Comm T & F, July 23,
1997, TSB-A-97(42)S.
Company prepares white papers that offer in depth analysis on technology, products, or
issues and how such items may impact the client. Company prepares the white papers for a client
on a specific topic chosen by the client. Where the information provided to the customer in a white
paper is in the nature of a consulting service (i.e., the information contained in the white paper has
been researched for the specific client, is personal and individual in nature, and is not or may not
be substantially incorporated into reports furnished to persons other than the client by Petitioner)
then the separately stated charge for the white paper is not subject to sales tax. However, a charge
for a white paper consisting of information and analysis of technology, products and issues selected

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by the client, which is culled from Petitioner’s database or files of previous white papers, or, another
database source, and which is or may be incorporated into reports furnished to others by Petitioner,
is subject to sales tax if delivered to a customer in New York. See Crowley Webb & Associates,
Adv Op Comm T&F, January 11, 1995, TSB-A-95(2)S.
Company’s sale of reprints to its customers, whether the reprints are on hard copy or are
transferred electronically, are sales of information which is not personal or individual in nature and
may be incorporated into reports furnished to others. Accordingly, such sales are subject to sales
and use tax pursuant to Section 1105(c)(1) of the Tax Law if delivered to a customer in New York.
Company conducts teleforums which it describes as live teleconferencing events featuring
presentations by Company's analysts on specific issues affecting business technology strategies for
customers doing business in financial services. Teleforums last 60 minutes and include a 30-40
minute presentation by Company's analysts and a subsequent question and answer session.
Company’s charges for teleforums, where the information presented is in the form of consulting
services, are not subject to sales tax. However, where such information is of a general nature, is
only furnished by telephony or telegraphy, and would be subject to tax under Section 1105(c)(1) of
the Tax Law if furnished in printed form, Company’s charges for client participation in teleforums
will be subject to tax pursuant to Section 1105(c)(9) of the Tax Law if delivered to a customer in
New York.
Company’s charges for in-person presentations and Company’s sale of strategic management
consulting services constitute sales of services not enumerated in Article 28 of the Tax Law.
Accordingly, receipts from the sale of such services are not subject to sales tax.
Where sales of taxable and non-taxable items are bundled in a single transaction, the entire
charge is subject to the tax unless charges for non-taxable items are separately stated on Company’s
bill or invoice, such charges are reasonable in relation to the total charges, and the services may be
purchased separately. See Hodgson, Russ, Andrews, Woods and Goodyear, Adv Op Comm T&F,
April 2, 1992, TSB-A-92(31)S; and Economic Cycle Research Institute, Inc., supra.
Since Company has a physical presence in the State in the form of an office located in the
State, it is required to register for purposes of Article 28 of the Tax Law and to collect and remit
sales and use tax on its taxable sales. See Section 1101(b)(8) of the Tax Law.

DATED: March 25, 2003

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.