Does a temp agency owe sales tax on charges for supplying office, clerical, and lab personnel to clients?

Plain-English summary

Professional Staff Services, Inc. supplies trained personnel to its customers — office and secretarial work (typing), clerical work (filing, bookkeeping), and lab work of the kind a lab technician or medical assistant does at a physician's office. It asked whether its charges are subject to sales, use, or excise tax.

The Department held the charges are not taxable.

• Sales tax on services is a closed list. Section § 1105(c) taxes only a specific set of enumerated services.
• These services aren't on the list. The office, secretarial, clerical, and laboratory work performed by the petitioner's personnel is not among the enumerated services — and providing personnel to another employer is not enumerated either.
• Result. The petitioner's charges to its customers are not subject to State or local sales or use tax, nor to any other excise tax administered by the State Tax Commission.

What this means for you

New York taxes only specifically listed services — supplying personnel isn't one of them. Unlike tangible goods (taxable unless exempt), a service is taxable only if it appears on the § 1105(c) list. Office, clerical, and lab staffing don't, so those charges aren't taxed.

The work the staff does still matters. Here the personnel performed non-enumerated work (typing, filing, lab tasks). If a staffing arrangement instead delivered an enumerated taxable service, the analysis could differ — the label "staffing" doesn't automatically shield a charge if what's really being sold is a taxable service.

This is the general rule for back-office labor. Clerical, secretarial, and similar administrative services are typically outside the sales-tax base in New York because they aren't enumerated.

Common questions

Q: We run a temp agency placing clerical and lab staff. Do we charge sales tax?
A: On these facts, no. Neither the clerical/lab work nor the service of supplying personnel is an enumerated taxable service under § 1105(c), so your charges aren't subject to sales or use tax.

Q: Why aren't these services taxable when goods generally are?
A: New York taxes services only if they're specifically listed in § 1105(c). Services not on that list — like office, clerical, and lab work — fall outside the sales tax.

Q: Could a staffing charge ever be taxable?
A: If what's actually being provided is an enumerated taxable service, the charge could be taxable. The key is whether the underlying service is on the § 1105(c) list, not the "staffing" label.

Citations and references

Statutes:

• Tax Law § 1105(c) — tax on specifically enumerated services

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1983.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a83_49s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-83(49)S
Sales Tax
December 30, 1983

Taxpayer Services Division
Technical Services Bureau
STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S830726B

On July 26, 1983 a Petition for Advisory Opinion was received from Professional Staff
Services, Inc., c/o Melvyn Ward, Matawan Mall, Rt. 34 & Broad Street, Matawan, New Jersey
07747.
The issue raised is whether the services provided by Petitioner are subject to sales, use or
excise tax.
Petitioner provides trained office, clerical and laboratory personnel to its customers. The
services performed by Petitioner's employees consist of office and secretarial work (typing), clerical
work (filing, bookkeeping, etc.) and lab work of a type performed by a lab technician or medical
assistant at a physician's office.
Section 1105(c) of the Tax Law imposes the State sales tax on the receipts from the sale of
a variety of services. Inasmuch as the office, secretarial, clerical and laboratory services performed
by Petitioner's personnel are not among the services specifically enumerated under Section 1105(c),
and the service of providing personnel to another employer is also not so enumerated, Petitioner's
charges to its customers are not subject to State or local sales or use tax, nor to any other excise tax
administered by the State Tax Commission.

DATED: December 9, 1983

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

s/FRANK J. PUCCIA
Director
Technical Services Bureau

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR