Does New York sales tax apply to an expert-network company's subscription charges for one-on-one phone consultations with industry experts, custom written research reports, and invitation-only seminars?

Plain-English summary

An "expert network" consulting company (identified in the petition only as "Company") connects clients — often businesses researching a market, product, or technology — with independent expert consultants (doctors, scientists, engineers, attorneys, business consultants, and similar professionals) who advise from their own personal knowledge and experience, not from any shared database. Company sells three types of services, all only on a subscription basis: (1) one-on-one oral phone consultations (limited or unlimited, use-it-or-lose-it, 15-45 minutes each), (2) custom written research reports answering a unique set of client questions by collecting and distilling several consultants' individual opinions, and (3) invitation-only or client-initiated meetings and seminars where clients meet consultants in small groups.

New York taxes two categories relevant here: "information services" (§ 1105(c)(1), covering the collecting/compiling/analyzing of information and furnishing reports to others) and the telephony/telegraphy equivalent of that same category (§ 1105(c)(9)) — but both explicitly exclude information that is "personal or individual in nature" and not substantially reused in reports to other clients, and § 1105(c)(9) additionally only reaches information that would also be taxable if delivered in printed form. Purely oral, in-person information is separately excluded entirely.

Applying those exclusions, the Department concluded, assuming the reports aren't culled from any common database, that Company's oral consultations and written reports are non-taxable consulting services — closer to the personalized advice given by a law firm or accounting firm than to a taxable information service built from a shared repository (like a stock-market advisory service or product/marketing survey). The invitation-only seminars are likewise untaxed: the information is delivered orally and in person (not by telephony), and attending isn't a taxable "admission to a place of amusement" either, since these are substantive professional discussions, not entertainment.

Two important limits: (1) if Company's written reports were derived from a common database or recycled from previous reports — information that "is or may be substantially incorporated into reports furnished to others" — those reports would become taxable information services; and (2) if the oral consultations conveyed information that would be taxable if furnished in printed form, delivering that same content by phone would trigger tax under § 1105(c)(9) once it's delivered to a New York customer.

What this means for you

Expert-network and consulting businesses

The core distinction is whether your consultants are drawing on personal expertise/judgment for each individual client engagement (nontaxable consulting) versus pulling from and reusing a shared database or template across many clients (taxable information service). Structure and document your service delivery — Usage Policies, confidentiality requirements, no-shared-database practices — to support the nontaxable characterization if that's accurate to how you actually operate.

Businesses running invitation-only professional seminars/events

Substantive small-group professional discussions and presentations aren't taxable "admission to a place of amusement" charges, distinguishing them from entertainment-style events — but keep the informational, expert-driven nature of the event well documented.

Accountants advising research/advisory clients

Watch the "oral vs. written" and "personal vs. reused" distinctions carefully — the same underlying content can be taxable or exempt depending entirely on delivery method (oral/in-person vs. written/telephonic) and whether it's genuinely individualized versus substantially recycled across multiple clients' reports.

Common questions

Q: Are one-on-one phone consultations with experts taxable in New York?
A: Not if the consultant draws on personal knowledge/experience for that specific client rather than a shared database, and the information wouldn't otherwise be taxable if furnished in printed form.

Q: Are custom written research reports taxable?
A: Not if they're genuinely individualized to the client's unique questions and aren't culled from a common database or recycled from prior reports. If they are drawn from a shared repository or reused across clients, they become a taxable information service.

Q: Is charging admission to an invitation-only professional seminar taxable?
A: Not under these facts — the Department found these substantive, informational seminars aren't "admission to a place of amusement" charges.

Q: Does this ruling apply to any consulting or expert-network business?
A: This is a fact-specific Advisory Opinion binding only on the requesting company and its described practices. Whether your own consultations, reports, or events are genuinely individualized (rather than database-driven or recycled) requires its own analysis.

Citations and references

• Tax Law § 1105(a) (imposition of sales tax on retail sales)
• Tax Law § 1105(c)(1) (furnishing of information services; personal/individual exclusion)
• Tax Law § 1105(c)(9) (entertainment/information services via telephony/telegraphy)
• Tax Law § 1105(f)(1) (admission charges to places of amusement)
• 20 NYCRR § 527.3 (sale of information services; oral-only exclusion; resale exclusion)
• Hodgson, Russ, Andrews, Woods and Goodyear, Adv Op Comm T&F, Apr. 2, 1992, TSB-A-92(31)S
• PricewaterhouseCoopers LLP, Adv Op Comm T&F, Mar. 25, 2003, TSB-A-03(11)S
• Underground Facilities Protective Organization, Inc., Adv Op Comm T&F, Dec. 20, 1993, TSB-A-93(63)S
• Hooper Holmes, Inc. v. Wetzler, 152 A.D.2d 871
• Rich Products Corporation v. Chu, 132 A.D.2d 175
• Towne-Oller & Assoc. v. State Tax Comm., 120 A.D.2d 873

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2008.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a08_18s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-08(18)S
Sales Tax
March 24, 2008

Office of Tax Policy Analysis
Taxpayer Guidance Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S050920A

On September 20, 2005, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Richard A. Leavy, Mayer Brown LLP, 1675 Broadway, New York,
New York 10019.
The issues raised by Petitioner, Richard A. Leavy, on behalf of his client, Company, are
as follows:
1.

Whether the New York sales and use tax applies to the sale of oral consultation
services on a subscription basis if a periodic payment entitles the subscriber to a
limited number of oral consultations.

2.

Whether the New York sales and use tax applies to the sale of oral consultation
services on a subscription basis if a periodic payment entitles the subscriber to an
unlimited number of oral consultations.

3.

Whether the New York sales and use tax applies to the sale of services on a
subscription basis if a periodic payment entitles the subscriber to commission a
limited number of custom written research reports.

4.

Whether the New York sales and use tax applies to the sale of admissions to
meetings and seminars on a subscription basis if a periodic payment entitles the
subscriber to participate in a limited number of events.

Petitioner submitted the following facts as the basis for this Advisory Opinion.
Company is a provider of specialized services on virtually any subject. Company uses
highly trained and experienced individuals to consult with and educate its clients. Company
provides services to deliver timely and specific insight on demand that is tailored to the client's
needs. The information provided ranges from background education on a particular topic to an
in-depth technical analysis of a discrete issue or subject.
The services provided by Company consist of delivering expert evaluations, advice,
opinions, and insight to Company's clients on a wide variety of topics. This advice takes many
forms including analyses of business operations, commentary on market strategies, market
evaluations, comparison and contrast of new and existing technologies, and commentary on new
and existing products.

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Company provides its clients with expert insight, opinion, and knowledge from a variety
of perspectives based on the first-hand experience of its consultants. All of Company’s services
are provided by experienced and learned professionals, consultants, and other authorities. These
consultants, who are often medical doctors, research scientists, engineers, attorneys, architects,
or professional business consultants, do not rely on any common database of information to
provide advice to Company's clients. Company's general policy is that its consultants should not
perform any research before responding to a client's inquiries. Company's consultants draw on
their own knowledge and experience to consult with Company's clients. Information is not
archived for later reuse.
Company engages consultants that have varied and diverse educational, industry, and
professional backgrounds to provide advice from whatever perspective the client requests.
Company’s consultations are always put into context by providing the client with the consultant's
(or consultants') educational background and work experience. Company encourages its clients
to make several consultations on each topic raised so that they can construct a "mosaic" of
information that delivers a complete picture of the current wisdom on the subject.
Every client of Company is assigned one or more research managers per practice area
who are responsible for coordinating the delivery of Company's services to the client within that
practice area. The research manager is generally conversant in both the general practice area and
the client's business and is also experienced in the substantive area(s) of specialty selected by the
client. The research manager works with the client to identify its information needs and consults
and advises the client on the most expedient and efficient means of obtaining the information
desired.
The research manager is, in all instances, an employee of Company. Because Company
seeks consultants that are experts in their fields, the consultants are, in virtually all instances,
independent contractors engaged by Company on an as-needed basis. Pursuant to Company’s
Usage Policies, Company’s employees and independent consultants are required to treat clients’
inquiries and any information provided in the course of their inquiry as confidential.
Company provides its services in the form of (i) oral consultations, (ii) custom written
research reports, and (iii) industry and subject matter specific meetings and seminars. Some of
the fields to which the services relate include medical devices, manufacturing processes,
pharmaceutical research and development, computer software design and development,
transportation and logistics, and retail marketing. Company's clients use the information
provided by Company's consultants to further their core business operations or guide their
proprietary investment decisions and strategies.
Oral consultations
The oral consultations provided by Company each consist of a one-on-one telephone
consultation with the client to provide background information, topical updates, and/or answers

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to specific questions. The telephone consultations may take the form of conversational dialogs,
question and answer sessions, tutorials, or some combination of all three. For example:
$ A client interested in the strength of a particular retail brand may contact Company to speak
with merchandising and marketing experts to understand the reasons for the retail brand's
recent success;
$ A client researching a pharmaceutical company and the market for alternatives to that
company's leading product may contact Company to speak with physicians or scientists to
understand the function and effectiveness of those competing products; or
A client researching a specialty chemical manufacturer may contact Company to speak with
leaders in the research, production, and marketing of flame retardant polymer materials to
understand the potential applications of the products produced by the chemical manufacturer.
No written materials are provided to the client by Company in connection with the oral
consultations. However, the name, biography, and contact information of the consultant(s)
selected to work with the client are generally provided to the client by e-mail.
The research manager assigned to the client will address logistical and other issues, such
as prescreening and scheduling, that arise in the provision of these services. Prior to the
occurrence of any oral consultation, the client will contact the assigned research manager, or an
alternate research manager, and describe the subject matter and nature of the information sought.
This pre-consultation communication enables the research manager to identify the appropriate
field of expertise needed for the consultation and identity several consultants that can deliver it to
the client. The research manager typically inquires about the suitability of several consultants
for the project. The research manager then sends the client the names and contact information
for several consultants that are identified as appropriate for the requested oral consultation and
have accepted Company's invitation to consult on the project.
Once the client and the research manager confirm the appropriate consultants for the
project, the research manager provides the client's contact information to the consultants. The
client will select one or more of these consultants to contact for an oral consultation. Each oral
consultation provided by Company typically consists of a 15- to 45-minute substantive
conversation between the client and the consultant.
Company offers oral consultations only on a subscription basis and offers two types of
subscriptions for oral consultations, limited and unlimited. The limited subscription provides the
client with a specified number of oral consultations that must be completed during the relevant
subscription period (e.g., one year). If all of the consultations available under the limited
subscription are not completed during the subscription period, no refund is provided (i.e., use it
or lose it). The unlimited subscription provides the client with an unlimited number of oral
consultations during the relevant subscription period.

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Written research reports
Company’s written research reports provide responses to a series of short questions and
requests for information by the client; there may be as few as 10 or more than 50 questions and
requests for information upon which a written research report is based. The questions are
developed by the client alone or in conjunction with Company's research manager assigned to
the client. For example:
$ A client interested in the quick-service restaurant market may contact Company to obtain a
written research report setting forth the opinions of restaurant owners and industry
consultants on a new menu initiative by a quick-service restaurant chain;
$ A client interested in a new antidepressant drug just released to the market may contact
Company to obtain a written research report setting forth the opinions of practicing
psychiatrists on the new drug; or
$

client interested in the recent merger of two large technology companies may contact
Company to obtain a written research report setting forth the opinions of computer
equipment resellers, integrators, and industry consultants on the anticipated impact of the
business combination.

In all instances, the questions forming the basis for the written research reports are unique
to the client for whom the report is developed. The information obtained in response to the
questions and requests for information is distilled into a research report by the research manager
and delivered to the client electronically. Once prepared, the written research report is
considered confidential to both Company and the client. Written research reports are neither
resold by Company to other clients nor used as the basis for creating a report to be provided for
another client. (In certain very limited instances, Company will edit and redact a written
research report for use as a sample to aid in soliciting new business from new and existing
clients.) Furthermore, the client is generally prohibited from disseminating written research
reports to third parties.
Prior to the preparation of a written research report, the client will contact the assigned
research manager (or an alternate) and describe the subject matter and nature of the knowledge
or experience base sought for the written research report. This consultation enables the research
manager to identify the appropriate field of expertise and the consultants who will provide the
substantive content for the report.
The research manager either works with the client to prepare the questions and requests
for information that will be sent to the consultants, or the research manager edits the questions
and requests for information prepared by the client. The research manager will, on his or her
own or, in some cases, with the client, determine the number and profile of the consultants to be

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used in preparing the written research report. The profile factors of consultants include such
factors as their education, experience, and specific field of expertise.
Once the questions and requests for information and the number and profile of the
consultants are determined, the research manager will send the materials to the consultants who
will respond to the research manager in writing. The responses will be collected, edited, and
used by the research manager to prepare the written research report for the client. In virtually all
instances, the written research report provided by Company is transmitted electronically to the
client.
Company offers written research reports only on a limited subscription basis. The
subscription provides the client with a limited number of written research reports that may be
completed during the relevant subscription period (e.g., one year). No refund is provided to the
client if the maximum number of written research reports allowed during the subscription period
are not commissioned.
Meetings and seminars
The meetings and seminars provided by Company consist of a series of events focused on
an industry or topical area. The meetings and seminars allow clients to learn about industry
issues and developments on an ongoing basis. For example:
$ Company may arrange a luncheon group of leading ophthalmologists to discuss macular
degeneration with clients interested in creating tools for diagnosis and prevention of the
disease;
$ Company may arrange a seminar presented by aeronautical engineers for clients
interested in the competition and innovations of aircraft manufacturers; or
$ Company may arrange a seminar presented by travel industry executives for clients
interested in recent trends in the travel industry.
The meetings and seminars allow Company's clients to meet in person with consultants,
attend presentations by the consultants, and discuss substantive issues in a small group setting
with other clients and the consultants. The meetings and seminars take place regularly at various
locations throughout the country, including New York, and also in international locations. The
meetings and seminars may be initiated by Company or clients. When a meeting or seminar is
initiated by Company, attendance is by invitation. When a meeting or seminar is initiated by a
client, that client may attend alone or have input into the identity of other attendees.
Attendance at the meetings and seminars is strictly limited to keep the groups small and
thereby facilitate discussion among the participants and the consultants, with the goal of
providing the greatest opportunity for learning and information exchange. Occasionally,

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consultants provide written handout materials to participating clients to facilitate discussion or
assist with the presentations at the meetings and seminars.
A research manager will receive and act on client requests for meetings and seminars.
The research manager selects consultants to make presentations at meetings and seminars and
also selects the specific presentation topic, format, and venue and identifies the client invitees.
Company offers meetings and seminars only on a limited subscription basis. The
subscription provides the client with the ability to participate in a limited number of meetings
and seminars during the subscription period (e.g., one year). No refund is provided to the client
if the maximum number of meetings and seminars allowed during the subscription period are not
attended.
Company has offices, clients, research managers, and consultants within and without the
state of New York. In most instances, research managers are located in the same state as the
clients they serve. In most instances, consultants are not located in the same state as the clients.
Applicable law and regulations
Section 1105 of the Tax Law provides, in part:
On and after June first, nineteen hundred seventy-one, there is hereby imposed
and there shall be paid a tax . . . upon:
(a) The receipts from every retail sale of tangible personal property, except as
otherwise provided in this article.
*

*

*

(c) The receipts from every sale, except for resale, of the following services:
(1) The furnishing of information by printed, mimeographed or multi-graphed
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, and excluding meteorological services.
*

*

*

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(9) (i) The furnishing or provision of an entertainment service or of an
information service (but not an information service subject to tax under paragraph one of
this subdivision), which is furnished, provided, or delivered by means of telephony or
telegraphy or telephone or telegraph service (whether intrastate or interstate) of whatever
nature, such as entertainment or information services provided through 800 or 900
numbers or mass announcement services or interactive information network services.
Provided, however, that in no event (i) shall the furnishing or provision of an information
service be taxed under this paragraph unless it would otherwise be subject to taxation
under paragraph one of this subdivision if it were furnished by printed, mimeographed or
multigraphed matter or by duplicating written or printed matter in any other manner nor
(ii) shall the provision of cable television service to customers be taxed under this
paragraph.
(ii) Notwithstanding the rate and date set forth in the opening undesignated
paragraph of this section and notwithstanding the opening undesignated paragraph of this
subdivision, on and after September first, nineteen hundred ninety-three, in addition to
any other tax imposed under this section, and in addition to any other tax or fee imposed
under any other provision of law, there is hereby imposed and there shall be paid an
additional tax at the rate of five percent upon the receipts which are subject to tax under
subparagraph (i) of this paragraph on the furnishing or provision of an entertainment or
information service which is received by the customer exclusively in an aural manner.
Such additional tax shall not be imposed by section eleven hundred seven, eleven
hundred eight or eleven hundred nine of this article and shall not be included among the
taxes authorized to be imposed pursuant to the authority of article twenty-nine of this
chapter.
*

*

*

(f) (1) Any admission charge where such admission charge is in excess of ten
cents to or for the use of any place of amusement in the state, . . .
Section 527.3 of the Sales and Use Tax Regulations provides, in part:
Sale of information services. (a) Imposition. (1) Section 1105(c)(1) of the Tax
Law imposes a tax on the receipts from the service of furnishing information by printed,
mimeographed or multigraphed matter or by duplicating written or printed matter in any
manner such as by tapes, discs, electronic readouts or displays.
(2) The collecting, compiling or analyzing information of any kind or nature and
the furnishing reports thereof to other persons is an information service.
(3) Among the services which are information services are credit reports, tax or
stock market advisory and analysis reports and product and marketing surveys.

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*

*

*

(4) Charges for credit information services, other than those that are transmitted
orally, are subject to tax. The following rules shall apply in determining taxability of
services that include both oral and written reports:
(i) Any fee for a written report is taxable.
(ii) Any fee for an oral report is taxable if the oral report is preliminary to the
written report.
(iii) An annual fee for subscribing to a service is taxable if it entitles the
subscriber to a certain number of free reports, or to reduced charges on reports,
unless the subscriber is entitled only to oral reports.
*

*

*

(b) Exclusions. (1) Sales tax does not apply to receipts from sales of information
services which are for resale as such.
(2) The sales tax does not apply to the receipts from the sale 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.
*

*

*

(3) Sales tax does not apply to receipts from sales of information services which
are only furnished orally. See paragraph (4) of subdivision (a) of this section.
Opinion
Company’s primary function is to provide its clients with the services of highly trained
and experienced individuals that will consult with, inform and offer opinions to Company’s
clients. Such services deliver on-demand timely and specific insight that is tailored to the client's
needs. The information provided ranges from background information on a particular topic to
in-depth technical analysis of a discrete issue or subject.
Company’s services consist of (i) oral consultations, (ii) custom written research reports,
and (iii) industry and subject matter specific meetings and seminars. Company generally offers
these services on a limited subscription basis, which provides the client a specified number of
oral consultations, written research reports, or meetings and seminars during the subscription
period. No refund is provided if the client does not use the maximum number of consultations,

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reports, meetings or seminars allowed during the subscription period. Company also offers a
subscription for an unlimited number of oral consultations.
Section 1105(c)(1) of the Tax Law imposes a sales tax on receipts from the service of
furnishing 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.
Section 1105(c)(9) imposes a sales tax on receipts from the service of furnishing information by
means of telephony or telegraphy or telephone or telegraph service. Information services which
are personal or individual in nature and which are not or may not be substantially incorporated in
reports furnished to other persons are excluded from the sales tax imposed by section 1105(c)(1)
or 1105(c)(9). Charges for information which is solely transmitted orally and in person are also
excluded from sales tax. See section 527.3(b)(3) of the Sales and Use Tax Regulations.
Based on the description of Company’s services in this Opinion, and assuming that
Company’s written research reports are not culled or derived from information from any
common databases by either Company or its consultants, Company’s services of collecting and
analyzing clients’ requests and providing oral consultations by telephone, or written research
reports do not constitute the sale of taxable services. The oral consultation and written reports
furnished to Company’s clients appear to be more akin to nontaxable consulting services as
discussed in Hodgson, Russ, Andrews, Woods and Goodyear, Adv Op Comm T&F, April 2,
1992, TSB-A-92(31)S; PricewaterhouseCoopers LLP, Adv Op Comm T&F, March 25, 2003,
TSB-A-03(11)S, and not like the reports derived from public records or common databases that
were deemed to constitute the provision of taxable information services in Hooper Holmes, Inc.
v Wetzler, 152 AD2d 871, lv denied 75 NY2d 706; Rich Products Corporation v Chu, 132 AD2d
175; Towne-Oller & Assoc. v State Tax Comm., 120 AD2d 873.
Therefore, Company’s
subscription charges for oral consultations and written reports are not subject to sales tax under
section 1105(c)(1) or 1105(c)(9) of the Tax Law. However, charges for written reports that were
derived from a common database or the files of previous written reports, and that consisted of
information which is or may be substantially incorporated into reports furnished to others by
Company or its consultants, would be subject to tax under section 1105(c)(1) if delivered to a
client in New York. Moreover, where the oral consultations are furnished by telephony or
telegraphy, and the information provided through the consultation would be subject to tax under
section 1105(c)(1) of the Tax Law if furnished in printed form, Company's charges for oral
consultations will be subject to tax pursuant to section 1105(c)(9) of the Tax Law if delivered to
a customer in New York. See PricewaterhouseCoopers LLP, supra.
Since the information furnished to clients at Company's meetings and seminars is
provided for a separate subscription charge and the information is transmitted orally rather than
in written reports and in person rather than by telephony or telegraphy, Company's subscription
charges for such meetings and seminars are not subject to sales or use tax under section 1105(c)
of the Tax Law. See section 527.3(b)(3) of the Sales and Use Tax Regulations. Petitioner’s
charges for seminars are not charges for an admission to a place of amusement and are not

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subject to sales tax under section 1105(f)(1) of the Tax Law. See PricewaterhouseCoopers LLP,
supra; Underground Facilities Protective Organization, Inc, Adv Op Comm T&F, December 20,
1993, TSB-A-93(63)S.
Charges for performing nontaxable services will not be subject to sales tax provided that
the services are not sold in conjunction with any taxable services and are not performed for a
customer in conjunction with the sale of tangible personal property. See Virtual Systems Group,
LLC., Adv Op Comm T&F, October 9, 1998, TSB-A-98(71)S; Arteffects, Inc., Adv Op Comm
T&F, February 21, 1996, TSB-A-96 (10)S; Alan/Anthony, Inc. Adv Op Comm T&F, June 19,
1992, TSB-A-92(51)S.

DATED: March 24, 2008

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Taxpayer Guidance Division

An Advisory Opinion is issued at the request of a person or entity. It is
limited to the facts set forth therein and is binding on the Department only
with respect to the person or entity to whom it is issued and only if the
person or entity fully and accurately describes all relevant facts. An
Advisory Opinion is based on the law, regulations, and Department
policies in effect as of the date the Opinion is issued or for the specific
time period at issue in the Opinion.