Does a record label owe sales tax on hairstylist and makeup artist services it hires for CD, video, and DVD cover-art photo shoots?

Plain-English summary

Sony Music Entertainment produces CDs, videos, and DVDs for artists on its in-house labels. As part of designing the cover art for these products, Sony hires hairstylists and makeup artists to style models and artists before photographing them; those photos become part of the finished packaging that Sony sells to retail distributors.

The Department split the answer between state and city tax. New York State only taxes services specifically listed in section 1105(c) of the Tax Law, and hairstylist/makeup services aren't on that list — so no State or local (state-administered) sales tax, and no Metropolitan Commuter Transportation District surcharge, applies, no matter how central that styling is to Sony's commercial creative process. But New York City imposes its own, separately administered local tax reaching "beauty, barbering, hair restoring, manicuring, pedicuring, electrolysis, massage services and similar services" — and hairstylist and makeup services fit squarely within that local list. So if Sony's stylists and makeup artists do the work inside New York City, Sony owes the City's 4 1/8% tax on those purchases regardless of the fact that they're being consumed in a larger creative/production process rather than for personal grooming. If the same services are performed outside city limits, no tax (state or city) applies at all.

The Department also flagged a twist worth remembering: this analysis only holds because the services are performed directly on people (models and artists). If Sony instead paid for hair or makeup work done on a physical prop — say, styling a wig — that would no longer be a "beauty service" under the City's rule at all; it would instead become a taxable State "fabricating" or "processing" service under section 1105(c)(2) or (3), and the wig itself might separately qualify for the production-supply exemption.

What this means for you

Record labels, photo/video production companies, and ad agencies hiring stylists

Expect no New York State sales tax on hairstylist or makeup artist services used in your creative production, but budget for New York City's 4 1/8% local beauty-services tax whenever that work happens inside the five boroughs — the commercial, non-personal purpose of the styling doesn't exempt it from the City's tax.

Businesses styling props rather than people

If your production involves styling an inanimate object (a wig, mannequin, doll, etc.) rather than a live model, that flips the analysis: it becomes a taxable State fabricating/processing service instead of an NYC beauty service, and you should check whether the item being styled separately qualifies for a production exemption.

Accountants and tax professionals

This is a clean illustration of New York's two-tier structure for "beauty"-type services: no State enumerated-services tax reaches them at all, but NYC imposes its own local tax on the identical services under its Administrative Code, entirely independent of the State list.

Common questions

Q: Does New York State tax hairstylist and makeup services purchased for commercial production?
A: No — these services aren't among the enumerated services New York State taxes under section 1105(c) of the Tax Law, regardless of the commercial purpose behind them.

Q: Is there any New York tax on the same services?
A: Yes, if performed inside New York City — the City imposes its own 4 1/8% local tax on beauty, barbering, and similar personal services under its Administrative Code, separate from the State's enumerated-services list.

Q: Does it matter that the styling is part of a creative/production process rather than personal grooming?
A: No — the City's tax applies to the nature of the service (hairstyling, makeup) regardless of why the customer is purchasing it, including for commercial creative purposes like album cover art.

Citations and references

Statutes and rules:

• Tax Law § 1105(c)(2), (3) (producing/fabricating/processing services; installing/repairing services)
• Tax Law § 1105-B (production parts, tools, and supplies exemption)
• Tax Law § 1115(a)(12) (production machinery/equipment exemption)
• Tax Law § 1212-A(a)(2) (NYC's authority to tax beauty/barbering-type services)
• Administrative Code of the City of New York § 11-2002(h) (NYC's local beauty/barbering services tax)

Prior authority relied on:

• Matter of N.B.E. Productions, LTD., TSB-H-85(103)S (commercial hair/makeup services still taxed under NYC's local beauty-services tax)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2004.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a04_14s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-04(14)S
Sales Tax
May 25, 2004

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S030919B

On September 19, 2003, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Sony Music Entertainment Inc., 555 Madison Avenue, 8th Floor, New York,
New York 10022.
The issue raised by Petitioner, Sony Music Entertainment Inc., is whether its purchases of
hairstylist and makeup artist services which are performed as part of the creative process for the
cover art of compact discs, videos, and DVDs it produces for sale are subject to the imposition of
sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioner creates and produces compact discs, videos, and DVDs for various artists on its
in-house labels. As part of the creative process involved in producing the compact discs, videos,
and DVDs, Petitioner hires hairstylists and makeup artists to perform particular hair and makeup
designs on models and artists. After the models and artists have been made-up, their pictures are
taken and the images are incorporated as part of the cover art design. The pictures are used as part
of the packaging and covers of various products such as compact discs, videos, and DVDs that
Petitioner sells to retail distributors.
Applicable law and regulations
Section 1105(c) of the Tax Law imposes tax upon the receipts from every sale, except for
resale, of certain enumerated services, in part, as follows:
*

*

*

(2) Producing, fabricating, processing, printing or imprinting tangible personal
property, performed for a person who directly or indirectly furnishes the tangible personal
property, not purchased by him for resale, upon which services are performed.
(3) Installing tangible personal property ... or maintaining, servicing or repairing
tangible personal property....
Section 1105-B of the Tax Law provides, in part:

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Sales Tax
May 25, 2004

(a) Receipts from the retail sales of parts with a useful life of one year or less, tools
and supplies for use or consumption directly and predominantly in the production of tangible
personal property ... for sale by manufacturing, processing, generating, assembling, refining,
mining or extracting shall be exempt from the tax imposed by subdivision (a) of section
eleven hundred five of this article.
(b) Receipts from every sale of the services of installing, repairing, maintaining or
servicing the tangible personal property described in paragraph twelve of subdivision (a) of
section eleven hundred fifteen of this article, including the parts with a useful life of one year
or less, tools and supplies described in subdivision (a) of this section, to the extent subject
to such tax, shall be exempt from the tax on sales imposed under subdivision (c) of section
eleven hundred five of this article.
Section 1115(a) of the Tax Law provides, in part:
Receipts from the following shall be exempt from the tax on retail sales imposed
under subdivision (a) of section eleven hundred five and the compensating use tax imposed
under section eleven hundred ten:
*

*

*

(12) Machinery or equipment for use or consumption directly and predominantly in
the production of tangible personal property ... for sale, by manufacturing, processing,
generating, assembling, refining, mining or extracting, but not including parts with a useful
life of one year or less or tools or supplies used in connection with such machinery or
equipment....
Section 1212-A(a)of the Tax Law provides, in part:
Any city in this state having a population of one million or more, acting through its
local legislative body, is hereby authorized and empowered to adopt and amend local laws
imposing in any such city:
*

*

*

(2) a tax, at the same uniform rate...on the receipts from every sale of the following
services: beauty, barbering, hair restoring, manicuring, pedicuring, electrolysis, massage
services and similar services, and every sale of services by weight control salons, health
salons, gymnasiums, turkish and sauna bath and similar establishments and every charge for
the use of such facilities....

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TSB-A-04(14)S
Sales Tax
May 25, 2004

Section 11-2002(h) of the Administrative Code of the City of New York imposes sales tax,
in part, on:
Receipts from beauty, barbering, hair restoring, manicuring, pedicuring, electrolysis,
massage services and similar services, and every sale of services by weight control salons,
health salons, gymnasiums, turkish and sauna bath and similar establishments and every
charge for the use of such facilities....
Opinion
Petitioner creates and produces compact discs, videos, and DVDs for artists on its in-house
labels which are then sold to retail distributors. In the course of creating the cover art for the
compact discs, videos and DVDs, Petitioner enlists the services of hairstylists and makeup artists.
Section 1105(c) of the Tax Law imposes New York State sales tax on the receipts from certain
enumerated services. Since services from hairstylists and makeup artists are not included within the
services taxed under section 1105(c) of the Tax Law, these services are not subject to New York
State or local sales and compensating use taxes (including the 1/4 percent tax imposed by section
1109 of the Tax Law in the Metropolitan Commuter Transportation District).
However, the city of New York imposes sales tax at the rate of 4 1/8% on the services of
beauty, barbering, hair restoring, manicuring, pedicuring, electrolysis, massage and similar services.
See section 11-2002(h) of the Administrative Code of the City of New York. The services of
makeup people and hairstylists purchased by Petitioner constitute such services within the meaning
and intent of section 11-2002(h) of the Administrative Code and are, therefore, subject to the 4 1/8%
New York City tax (see Matter of N.B.E. Productions, LTD., Dec St Tx Comm, February 6, 1985,
TSB-H-85(103)S). Notwithstanding that Petitioner contends that the services are consumed in the
creative process described in this Advisory Opinion, they are subject to the New York City tax. If
such services are performed outside New York City they are not subject to tax.
As discussed above, the services of makeup people and hairstylists purchased by Petitioner
are not included within the services taxed under section 1105(c) of the Tax Law. It is noted that if
the services purchased by Petitioner are performed on tangible personal property, such as a wig,
there could be a different result. Such services would not be subject to the tax imposed by New York
City pursuant to section 11-2002(h) of the Administrative Code of the City of New York, but would
be included among the enumerated taxable services under section 1105(c)(2) or (3) of the Tax Law.
The wig might qualify as a production supply item eligible for exemption under section 1105-B(a)
of the Tax Law. Services subject to tax under section 1105(c)(3) that are performed on such tangible

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Sales Tax
May 25, 2004

personal property used or consumed directly and predominantly in the production of property for
sale would also qualify for exemption from sales and use tax. See section 1105-B(b) of the Tax Law.

DATED: May 25, 2004

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.