Are the fees and dues a real-estate multiple listing service charges its member brokers subject to sales tax?

Plain-English summary

Mohawk Valley Listing Service, Inc. is a New York corporation formed by two Herkimer County brokers to run a multiple listing service (MLS) — collecting member brokers' real-estate listings, typing and photographing them, and distributing them to the members. It asked whether the fees and dues it charges those members are taxable.

The Department held:

• Not club dues. A multiple listing service is not a social or athletic club, so the tax on club dues under Tax Law § 1105(f)(2) does not apply. The service exists "purely … for dissemination of information," not for social functions.
• It's a taxable information service. Collecting, compiling, and disseminating the listing information to the members is the furnishing of an information service taxable under § 1105(c)(1). Because the information is substantially incorporated in reports furnished to others (the shared listing books), it is not the exempt "personal or individual" kind.
• Every charge is a taxable receipt. Under the definitions of "receipt" (§ 1101(b)(3)) and "sale" (§ 1101(b)(5)), all of the service's charges are taxable — the $200 initiation fee, the $200 annual dues, the $50 set-up fee, the per-listing and change-of-status fees, the late-listing fees, and the reinstatement fee. The Department relied on Putnam County Multiple Listing Corp. and Rensselaer County Board of Realtors.
• The service's printing purchases are for resale. What the MLS pays a printer to print the listing books is either a sale of tangible personal property (§ 1105(a)) or a printing service (§ 1105(c)(2)); either way it is a purchase for resale and exempt, because the MLS is reselling that information service to its members.

What this means for you

If you run a multiple listing service or a similar information cooperative: Don't treat your "dues" as tax-free just because you're organized like a membership group. If the substance of what members pay for is shared, compiled information, the whole package — initiation fees and annual dues included — is a taxable information service. Collect sales tax on all of it.

Labels don't control. Calling a charge an "initiation fee," "dues," or a "late fee" doesn't change its tax character. When the charges fund a single taxable information service, they're all taxable.

Your own inputs can be bought for resale. Because you resell the information service, what you pay a printer to produce the listing books is a purchase for resale — give the printer a resale certificate rather than paying tax on it.

Common questions

Q: We're a membership organization — aren't our dues exempt?
A: The § 1105(f)(2) dues tax is limited to social and athletic clubs, and a multiple listing service isn't one. But that doesn't make the dues tax-free — they're taxable as part of an information service under § 1105(c)(1).

Q: Is the initiation fee treated differently from the recurring dues?
A: No. Both, along with the set-up, per-listing, change, late, and reinstatement fees, are taxable receipts for the same information service.

Q: Do we pay tax when the printer prints our listing books?
A: No. That's a purchase for resale (you're reselling the information service), so it's exempt — give the printer a resale certificate.

Citations and references

Statutes:

• Tax Law § 1105(c)(1) — tax on furnishing information, including collecting, compiling, or analyzing information and furnishing reports to others; excludes personal/individual information not substantially incorporated in reports to others
• Tax Law § 1105(f)(2) — tax on dues paid to a social or athletic club (held inapplicable)
• Tax Law § 1101(b)(3) — definition of "receipt"
• Tax Law § 1101(b)(5) — definition of "sale, selling or purchase"

Prior determinations cited:

• Putnam County Multiple Listing Corp., Dec. State Tax Comm., July 15, 1983, TSB-H-83(174)S
• Rensselaer County Board of Realtors, Inc., Dec. State Tax Comm., April 23, 1976

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1989.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a89_24s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-89 (24)S
Sales Tax
July 26, 1989

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S890322B

On March 22, 1989, a Petition for Advisory Opinion was received from Mohawk Valley
Listing Service, Inc., P.O. Box 108, Herkimer, New York 13350-0108.
The issue raised is whether certain charges paid by members of the Multiple Listing Service
to the Petitioner, Mohawk Valley Listing Service, Inc. is subject to sales and use tax.
The Mohawk Valley Listing Service, Inc., is a New York State Corporation which was
organized and incorporated by two Herkimer County brokers for the purpose of facilitating and
assisting in the cooperative efforts of all brokers in the area to share listings under a multiple listing
service.
To join the Listing Service, it is necessary for the participating brokers to submit a one-time
initiation fee of $200.00. Also, there are annual dues required to be paid by the participating brokers
of $200.00. The Listing Service is not a social organization which has regular social functions, and
is purely established for dissemination of information.
The services provided by the Mohawk Valley Listing Service, Inc., are as follows:

1. An initial $50.00 set-up fee is charged to any new member joining the Service to set up
   appropriate files for the dissemination of information.
2. For each new listing, $8.00 is charged for typing listing, taking pictures, copying and
   distributing to the 16 members of the Service, and a fee of $7.00 if there is no picture.
3. For any change of status, which is distributed to the members, a fee of $1.00 is charged.
4. There is an obligation to submit all new listings to the Service within a certain period of
   time and should there be a late notice of listing, there is a charge of $3.00 per day to a maximum of
   $60.00 and a charge of $1.00 per day for a late change of status listing to a maximum of $20.00.
5. Any form provided to members are provided at cost with Sales Tax having been paid to
   the printer for the printing of the form.
6. Should any member have been suspended from the Service, there is a fee charged of
   $25.00 for reinstatement of the member to the Service.
7. There is a $1.00 fee charged for the dissemination of information to affiliate members,
   such as appraisers.
   TP-9 (9/88)

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TSB-A-89 (24)S
Sales Tax
July 26, 1989

8. There is an additional charge if there is an omission of information on the information
   listing sheet.
   The above charges are billed directly to the members of the Service.
   Section 1105(f)(2) of the Tax Law imposes a tax upon dues paid to a social or athletic club.
   Multiple listing services are not considered to be social or athletic clubs.
   Section 1105(c)(1) of the Tax Law provides:
   (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, and excluding the
services of advertising or other agents, or other persons acting in a representative
capacity, and information services used by newspapers, radio broadcasters and
television broadcasters in the collection and dissemination of news.
Section 1101(b)(3) of the Tax Law provides:
(3)
Receipt. The amount of the sale price of any property and the charge for any
service taxable under this article, valued in money, whether received in money or
otherwise, including any amount for which credit is allowed by the vendor to the
purchaser, without any deduction for expenses or early payment discounts, but
excluding any credit for tangible personal property accepted in part payment and
intended for resale and excluding the cost of transportation of tangible personal
property sold at retail where such cost is separately stated in the written contract, if
any, and on the bill rendered to the purchaser. For special rules governing
computation of receipts, see section eleven hundred eleven.
Section 1101(b)(5) of the Tax Law provides:
(5)
Sale, selling or purchase. Any transfer of title or possession or both, exchange
or barter, rental, lease or license to use or consume, conditional or otherwise, in any
manner or by any means whatsoever for a consideration, or any agreement therefor,
including the rendering of any service, taxable under this article, for a consideration
or any agreement therefor.
All of Petitioner's charges including the "initiation fee" and the "annual dues" are for the sale
of a taxable information service and therefore are subject to sales tax within the meaning and intent

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TSB-A-89 (24)S
Sales Tax
July 26, 1989

of sections 1101(b)(3) and 1105(c)(1) of the Tax Law. (See: Putnam County Multiple Listing Corp.
Dec State Tax Comm, July 15, 1983, TSB-H-83(174)S; Rensselaer County Board of Realtors, Inc.
Dec State Tax Comm, April 23, 1976.
Charges made by a printer to Petitioner for printing the listing books are sales of either
tangible personal property under §1105(a) of the Tax Law or a charge for printing within the scope
of §1105(c)(2) of the Tax Law. In either instance, the purchase by Petitioner is a purchase for resale
which is exempt from the sales or use tax.

DATED: July 26, 1989

s/FRANK J. PUCCIA
Director
Technical Services Bureau

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