Are public relations services subject to New York sales or use tax?

Plain-English summary

Alan/Anthony, Inc. provides public relations services to promote clients through the business or general press. A typical engagement includes consulting with client staff on press-release and story concepts, writing plans and recommendations, contacting editors and producers to pitch stories, writing press releases and articles, and photocopying and mailing releases to a list of editors and producers. It asked whether these PR services are taxable.

The Department's answer:

• PR is not an enumerated taxable service. Tax Law § 1105(c) taxes only certain specifically listed services. Public relations is not one of them, so the service is not subject to sales or use tax. This follows Greenstone & Rabasca Advertising Inc., TSB-A-86(35)S, which reached the same result for consulting/PR work — planning budgets, news releases, and publicity campaigns.
• No tax only if no goods change hands. The firm need not collect tax on its charges provided no tangible personal property is transferred to the client or its designees as part of the service.
• The firm pays tax on its own inputs. All purchases the firm makes — for its own account or as an agent for a principal — of materials or taxable services used to perform the PR work are subject to sales tax.
• Bundling caveat. If the PR service cannot be purchased separately from other taxable services the firm provides, the items are treated as one and the entire charge becomes taxable.

What this means for you

Public relations firms and consultants

Your core PR work — pitching stories, writing releases, media outreach, strategy — is not taxable in New York because it isn't on the § 1105(c) list of taxable services. You generally don't collect sales tax on those fees.

Watch what you hand the client

The nontaxable treatment assumes no tangible personal property is transferred to the client. If your deliverable crosses into transferring taxable goods, that piece can change the analysis.

You still pay tax on your supplies

Being a nontaxable service provider doesn't make your purchases tax-free. Materials and taxable services you buy to do the work — whether for yourself or as an agent for the client — are taxable to you.

Invoice PR separately from taxable services

If you also sell taxable services and the PR can't be bought on its own, the state taxes the whole combined charge. Price and invoice PR as a separately purchasable item to keep it nontaxable.

Accountants and tax professionals

This is the classic "enumerated services" rule: § 1105(c) is a closed list, and services outside it (like PR, per Greenstone & Rabasca) are nontaxable, subject to the no-goods-transferred condition, the vendor's own use-tax exposure on inputs, and the standard bundling rule.

Common questions

Q: Are public relations services taxable in New York?
A: No. PR is not one of the enumerated services taxed under § 1105(c), so the charges are not subject to sales or use tax, provided no tangible personal property is transferred to the client.

Q: What if the PR firm gives the client physical materials?
A: The nontaxable treatment depends on no tangible personal property being transferred to the client or its designees. Transferring goods can change the result.

Q: Does the firm pay sales tax on anything?
A: Yes. The firm owes sales tax on its own purchases of materials and taxable services used to perform the work, whether bought for itself or as an agent for a principal.

Q: When could PR charges become taxable?
A: If the PR service can't be purchased separately from other taxable services the firm provides, the entire combined charge is taxable.

Q: Does this apply to advertising agencies too?
A: The Department relied on an advertising-agency opinion (Greenstone & Rabasca) reaching the same result for consulting and public relations work, so the enumerated-services logic is the same.

Citations and references

Statutes and authorities:

• Tax Law § 1105(c) (imposes tax only on specifically enumerated services; public relations is not listed)
• Greenstone & Rabasca Advertising Inc., Adv. Op. St. Tx. Comm., Sept. 9, 1986, TSB-A-86(35)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1992.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a92_55s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-92(55) S
Sales Tax
June 19, 1992

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S920116C

On January 16, 1992, a Petition for Advisory Opinion was received from Alan/Anthony, Inc.,
145 Avenue of the Americas, 2nd Floor, New York, New York 10013.
The issue raised by Petitioner, Alan/Anthony, Inc., is whether the providing of public
relations services as described below are subject to sales and use tax.
Petitioner provides public relations services designed to promote its clients through the
business or the general press. The specific services provided, as indicated in a sample of its typical
public relations agreement, include:
1.

Consultation with client personnel to develop press release and story concepts and
approve plans and submissions to the press.

2.

Writing of plans and recommendations.

3.

Telephone and written contact with editors and producers to determine their interests,
suggest stories, and offer client personnel as sources of quotes and comments.

4.

Writing of press releases and articles for submission to the press.

5.

Xerox reproduction and mailing of press releases to a list of editors and producers
developed by Petitioner.

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 providing public relations 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.
In Greenstone & Rabasca Advertising Inc., Adv Op St Tx Comm, September 9, 1986, TSBA-86(35)S the State Tax Commission opined as follows:
A.

Consulting and public relations services; planning and preparing advertising
budgets, news releases, and publicity campaigns.

-2­
TSB-A-92(55) S
Sales Tax
June 19, 1992
Petitioner is not required to collect tax on its charges to the client, provided
no tangible personal property is transferred to the customer or its designees in
connection with this service. Ail purchases by Petitioner, either for its own account
or as agent for a principal, of material or taxable services to be used in performing
these services are subject to sales tax.
Accordingly, pursuant to Section 1105(c) of the Tax Law and Greenstone & Rabasca
Advertising Inc., supra, the public relations services provided by Petitioner as set forth above are not
subject to sales and use taxes.
It is noted that if the public relation services furnished to its client cannot be purchased
separately from the sale of other taxable services provided by Petitioner, the combination of the
items listed must be considered as one, and the entire charge for all items would be subject to sales
tax.

DATED: June 19, 1992

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

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