Does someone selling a mail-order 'kit' that helps property owners challenge their tax assessments have to collect New York sales tax on it?

Plain-English summary

Linda and Ralph Spaulding prepared a mail-order "Taxbuster kit" to help property owners in the City of Troy contest increases in their tax assessments. The kit contains: an article they wrote ("Fighting Unfair Property Taxes") with three charts to help prove a case; a guide to completing the grievance form; a blank grievance form; and a copy of the book "How to Challenge Your Assessment" (written by the New York State Board of Equalization and Assessment). They asked whether they must collect sales tax on kit sales.

The Department held the whole kit is taxable — for two separate reasons.

• It's tangible personal property. Under Tax Law § 1105(a), the guides, grievance forms, and instructions in the kit are tangible personal property, so selling them is subject to sales tax.
• It's also a taxable information service. Under Tax Law § 1105(c)(1), the Spauldings gathered information about past and present assessment practices in Troy, examined it, and drew their own conclusions, which they packaged in the kit. Because the kit is offered to the general public and is not designed to aid one specified taxpayer, the information is (or may be) furnished to other persons — so it does not fit the exclusion for information that is personal or individual in nature. That makes the collecting, compiling, and analyzing a taxable information service.
• Result. The Spauldings must collect sales tax on the entire selling price of the Taxbuster kit.

What this means for you

Selling a packaged "kit" of forms, guides, and instructions is taxable as tangible goods. Printed materials — even helpful how-to guides and blank forms — are tangible personal property, so their sale is subject to § 1105(a) sales tax.

Compiling and analyzing information for a general audience is a taxable information service. When you collect data, analyze it, draw conclusions, and sell the result to whoever will buy, § 1105(c)(1) reaches it. The exclusion for "personal or individual" information does not apply to a product designed for and marketed to the public.

Being sold to the public is what defeats the exclusion. The § 1105(c)(1) exclusion protects information that is personal or individual and is not (or may not be) substantially incorporated into reports furnished to others. A mass-market kit is the opposite — it is shared by design.

Common questions

Q: I sell a kit of forms and guides that help people challenge their property assessments. Is it taxable?
A: Yes. The printed materials are tangible personal property taxable under § 1105(a), and the compiled/analyzed information is a taxable information service under § 1105(c)(1).

Q: Doesn't the "personal or individual" exclusion cover it?
A: No. That exclusion is for information that is personal or individual in nature and not substantially incorporated into reports furnished to others. A kit offered to the general public — not tailored to one specified taxpayer — does not qualify.

Q: One item in the kit is a government-written book. Does that change the tax?
A: No. The Department looked at the kit as a whole and taxed the entire selling price, both as tangible personal property and as an information service.

Citations and references

Statute and regulation:

• Tax Law § 1105(a) — taxes receipts from retail sales of tangible personal property (the kit's guides, forms, and instructions)
• Tax Law § 1105(c)(1) — taxes furnishing information, including collecting, compiling, or analyzing information and furnishing reports, but excludes information that is personal or individual and not substantially incorporated into reports furnished to others
• 20 NYCRR 527.3 — the Department's information-services regulation

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1988.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a88_6s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-88(6)S
Sales Tax
December 18, 1987

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S870915A

On September 15, 1987, a Petition for Advisory Opinion was received from Linda and Ralph
Spaulding, 764 Seventh Avenue, Troy, New York, 12182.
The issue raised is whether Petitioners are required to collect sales tax on sales of a mail
order kit designed to assist real property owners in challenging tax assessment increases.
Petitioners have prepared a "Taxbuster kit" to assist property owners in the City of Troy in
contesting tax assessments. The kit includes: 1) an article, prepared by Petitioners summarizing the
issues involved, entitled "Fighting Unfair Property Taxes" and three charts for the taxpayer to use
in proving a case; 2) a guide to "Completing Your Grievance Form"; 3) a blank grievance form for
the taxpayer to complete and bring to the Grievance Board, and 4) a copy of the book "How to
Challenge Your Assessment." This book was written by the New York State Board of Equalization
and Assessment.
Section 1105(a) of the Tax Law imposes a tax upon "[t]he receipts from every retail sale of
tangible personal property." The "kit" in question includes guides, grievance forms and their
instructions on how to file a grievance with the City of Troy. These are considered to be tangible
personal property within the meaning of the statute. Accordingly, the sale of these items is subject
to sales tax.
Section 1105(c)(1) of the Tax Law imposes a tax upon "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
into reports furnished to other persons by the person who has collected, compiled or analyzed such
information, (see, 20 NYCRR §527.3).
Petitioners have gathered information about the past and present assessment practices in the
City of Troy. They have examined this information and drawn their own conclusions as to its
meaning. These findings are included within the "kit" to aid the residents of Troy in determining
whether to contest their tax assessment. The fact that these "kits" are offered to the general public
and not designed to aid a specified taxpayer clearly shows that the information is and may be
furnished to other persons and that this service does not fit within the exclusion. Therefore, the
Petitioners' compiling, collecting and analyzing of this information and subsequent sale constitutes
the furnishing of a taxable information service within the meaning of section 1105(c)(1) of the Tax
Law.

RODERICK G. W. CHU, COMMISSIONER
GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR
TP-8 (3/83)

-2­
TSB-A-88(6)S
Sales Tax
December 18, 1987
Accordingly, the Petitioner must collect the appropriate sales tax on the entire selling price
of the "Taxbuster kit."

DATED: December 18, 1987

s/FRANK J. PUCCIA
Director
Technical Services Bureau

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