Is a charge for monitoring air for asbestos content during removal, and issuing reports, a taxable information service?

Plain-English summary

George Industries, Inc. hired a consultant, A & A Consulting and Inspection Services, Inc., first to do an engineering study on how best to remove asbestos, and then — during a separate contractor's asbestos-removal work — to take air samples monitoring asbestos content and furnish reports of the results. George Industries asked whether the charge for the air-monitoring-and-reports falls within the information-service exclusion in Tax Law § 1105(c)(1).

The Department held the charge is not taxable.

• Air monitoring isn't an enumerated service — but reporting is an information service. Monitoring air is not itself one of the services taxed under § 1105(c). Because A & A collected, compiled, or analyzed air-quality information and furnished a report, it provided an information service within § 1105(c)(1).
• The personal/individual exclusion applies. Section 1105(c)(1) excludes information that is personal or individual in nature and not (or not able to be) substantially incorporated in reports furnished to others. The reports covered only the asbestos content at George Industries' own location and went only to George Industries — so they meet the exclusion, and the charge is not subject to tax.
• The capital-improvement overlay. Asbestos removal by itself is taxable under § 1105(c)(5), and the monitoring is one aspect of that overall removal service. But where the physical removal is performed as a constituent part of a capital improvement, the removal charge is not taxable — and the monitoring is then accorded the same capital-improvement treatment (Oscar S. Rothaus, TSB-A-89(10)S).
• Professional-engineering advice is outside the tax. To the extent the work is technical advice rendered by a licensed professional engineer — reports and documents that by law only a licensed PE may prepare — it is not a sale of property or an enumerated service and is outside the sales tax (R.H. McDermott Corp., TSB-A-88(22)S; PCA Engineering, Inc., TSB-A-90(4)S).

What this means for you

One-client, one-site reports are usually exempt information

The information-service exclusion turns on whether the report is personal and individual to you and not something the provider can repackage and sell to others. A monitoring or testing report prepared only about your site and delivered only to you typically falls within the § 1105(c)(1) exclusion — unlike a generic data compilation sold to many customers.

Watch how the underlying job is characterized

Because monitoring rides along with the asbestos-removal work, its tax status can also follow the removal. Straight removal is taxable; removal done as part of a capital improvement is not, and the monitoring goes the same way. If your abatement is a constituent part of a capital improvement, keep the documentation that supports that treatment.

Licensed-engineer work is its own exclusion

Genuine professional-engineering advice — the evaluations, specifications, tests, and analyses that only a licensed PE may legally render — is outside the sales tax altogether, even when delivered as a written report. Know which of these grounds your charge rests on.

Common questions

Q: Is air monitoring for asbestos a taxable service?
A: No. It isn't an enumerated § 1105(c) service, and the reporting falls within the § 1105(c)(1) exclusion because the information is personal and individual to your site and not furnished to others.

Q: Does it matter that a different company did the actual asbestos removal?
A: No. The monitoring is treated as one aspect of the overall removal service even if performed by a separate party — but the personal/individual information exclusion still makes George Industries' monitoring charge nontaxable.

Q: What if the asbestos removal is part of a capital improvement?
A: Then the removal is nontaxable, and the monitoring gets the same capital-improvement treatment. And genuine licensed-engineer technical advice is outside the tax regardless.

Citations and references

Statutes and regulations:

• Tax Law § 1105(c)(1) — tax on information services; exclusion for information that is personal or individual in nature and not substantially incorporated in reports furnished to others
• Tax Law § 1105(c)(5) — tax on maintaining, servicing or repairing real property (asbestos removal), as distinguished from a capital improvement

Cited authority:

• Oscar S. Rothaus, Adv Op Comm T & F, March 28, 1989, TSB-A-89(10)S — removal as a constituent part of a capital improvement is not taxable
• R.H. McDermott Corp., Adv Op Comm T & F, March 2, 1988, TSB-A-88(22)S — professional-engineering advice outside the sales tax
• PCA Engineering, Inc., Adv Op Comm T & F, February 15, 1990, TSB-A-90(4)S — professional-engineering advice outside the sales tax
• Opinion of Counsel, 1966 NYTB-2, p. 58 — reports legally renderable only by licensed professional engineers

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1990.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a90_16s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-90 (16)S
Sales Tax
April 16, 1990

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S891005A

On October 5, 1989 a Petition for Advisory Opinion was received from George Industries,
Inc., One Page Street, Endicott, New York 13760.
The issue raised by Petitioner, George Industries, Inc., is whether the charges to it for the
service of monitoring air for asbestos content and the issuing of reports of the findings thereof fall
within the exclusion from tax provided under Section 1105(c)(1) of the Tax Law.
Petitioner entered into a contract with A & A Consulting and Inspection Services, Inc.
(hereinafter referred to as "A & A") to perform an engineering study to determine the best way to
proceed with asbestos removal. Petitioner subsequently entered into a separate contract with an
unrelated third party to perform the removal of the asbestos. A & A also provided the service of
taking air samples for the purpose of monitoring air quality (asbestos content) during the actual
asbestos removal process and furnished Petitioner with reports concerning the results of such
monitoring.
Section 1105(c) of the Tax Law imposes tax upon the receipts from every sale, except for
resale, of certain enumerated services. The service of monitoring air is not one of the services
enumerated under Section 1105(c) of the Tax Law and therefore such service is not subject to sales
or use tax. However, Section 1105(c)(1) of the Tax Law imposes tax upon the receipts from every
sale, except for resale, of the service of "[t]he 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...."
Because A & A collected, compiled or analyzed information concerning air quality at
Petitioner's location and furnished Petitioner a report or reports thereof, A & A is considered to have
provided an information service. However, as the information provided in the reports only pertained
to the asbestos content within the air at Petitioner's location, such information is considered to have
met the requirement of being personal or individual in nature. Moreover, as the report was only
furnished to Petitioner the requirement that the information is not or may not be substantially
incorporated in reports furnished to other persons was also met.
Accordingly, the charges to Petitioner for the air monitoring service and the furnishing of
reports thereof are not subject to New York State and Local Sales or Use Tax pursuant to Section
1105(c)(1) of the Tax Law as such charges are for the sale of information which falls within the
exclusion from tax provided under said Section.
TP-9 (9/88)

-2­
TSB-A-90 (16)S
Sales Tax
April 16, 1990

However the charges for the service of monitoring air for asbestos content and the issuing
of reports of the findings may under some circumstances be subject to sales tax pursuant to Section
1105(c)(5) of the Tax Law.
Section 1105(c)(5) imposes a sales tax upon receipts from the services of "[m]aintaining,
servicing or repairing real property. . .as distinguished from adding to or improving such real
property, property or land, by a capital improvement as such term capital improvement is defined
in paragraph nine of subdivision (b) of section eleven hundred one. . . ."
The service of asbestos removal by itself is a service subject to tax under Section 1105(c)(5)
of the Tax Law. However, when the service of asbestos removal is performed as a constituent part
of a capital improvement the charge for such removal is not subject to sales and use tax. (Oscar S.
Rothaus, Adv Op Comm T & F, March 28, 1989, TSB-A-89(10)S.) It follows that the service of
monitoring air for asbestos content during the removal of the asbestos from the premises and the
issuing of reports of the findings of such monitoring is one aspect of the overall service of asbestos
removal and thus is subject to tax under Section 1105(c)(5) of the Tax Law, even if the monitoring
is done by a party other than the party physically removing the asbestos. However if the physical
removal of the asbestos is performed as a constituent part of a capital improvement, then the
monitoring service will be accorded similar treatment as a capital improvement.
It is further noted that the furnishing of technical advice by a licensed professional engineer
is not deemed to be the sale of tangible personal property or the sale of an enumerated service even
if a written report is furnished as an incident to the engineering service being performed. Such a
professional service is outside the scope of the sales tax.
Accordingly, to the extent that the services rendered for Petitioner constitute the rendering
of technical advice by a licensed professional engineer, the charge for said services is not subject to
sales or use tax. (R.H. McDermott Corp., Adv Op Comm T & F, March 2, 1988, TSB-A-88(22)S;
PCA Engineering, Inc., Adv Op Comm T & F, February 15, 1990, TSB-A-90(4)S.)
It must be emphasized that this opinion as it relates to engineering services is limited to the
tax status of reports and documents (e.g., evaluations, specifications, tests and analysis) which being
based upon the principles of mathematics and the physical sciences, may legally be rendered only
by licensed professional engineers. Opinion of Counsel, 1966 NYTB-2, p. 58.

DATED: April 16, 1990

s/PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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