My client's records-retrieval business gets authorized requesters copies of their own confidential medical records, tax returns, or Social Security statements from the actual custodians -- are those retrieval fees subject to New York sales tax?

Plain-English summary

SMART Business Advisory and Consulting, LLC's client ("RRS") runs a records-retrieval business. Medical practitioners engage RRS to process requests for patient medical records submitted by individuals, law firms, insurance companies, and state agencies ("requesters"). RRS visits the practitioner's office, copies the specifically requested records under the requester's signed HIPAA-compliant authorization, and delivers the copies to the requester, billing the requester using New York's own pricing guidelines for individual requesters (or standard pricing otherwise). RRS is also separately hired directly by individuals (or their representatives) to obtain copies of their own tax returns from the IRS or a state tax department, or their own Social Security statements from the SSA — again using signed authorization forms specific to the individual. RRS charges a mix of fees (a flat request-preparation fee whether or not records are found, a record custodian fee, shipping/handling, a per-page retrieval fee, and other applicable fees like a "no record" statement fee), all separately billed and referenced to the specific individual or case.

The Department held these retrieval fees are not taxable, with one narrow exception. The reasoning has two independent legs:

First, the "personal information" exclusion. New York taxes "the furnishing of information" (Tax Law §1105(c)(1)), but specifically excludes information that's "personal or individual in nature" and not incorporated into reports given to other people. Because RRS is retrieving records specifically identified with, and confidential to, one particular individual (the requester or someone the requester represents) — records that aren't otherwise available from any public source and can only be obtained with that individual's own signed authorization — this falls squarely within the personal-information exclusion, consistent with two prior opinions (Weitz & Luxenberg; Immediate Medical Records). The Department contrasts this with selling general, non-individual-identified statistical information compiled from medical files, or selling information drawn from records that ARE publicly available — both of which would be taxable information services under prior authority (Matter of Hooper Holmes v. Wetzler; State Farm Mutual).

Second, this isn't a taxable "detective service" either. New York taxes protective and detective services under §1105(c)(8), but RRS doesn't investigate anything — it's handed all the information needed to locate specific records, along with the legal authorization to retrieve them, and it's barred from seeking records it isn't specifically authorized to get. That's simple authorized retrieval, not investigative work, so it doesn't cross into the taxable detective-service category (again citing Weitz & Luxenberg).

The one exception: any separately stated charge for making additional copies of records already retrieved is a taxable sale of tangible personal property under §1105(a) — copying paper is copying paper, regardless of how confidential the content is.

What this means for you

Records-retrieval, medical-record-copying, and similar authorized-access services

If your business retrieves specifically-identified confidential records for the individual they belong to (or their authorized representative), using that individual's own signed authorization, your retrieval fees are likely untaxed personal information, not a taxable information service or detective service — as long as you're not investigating anything and aren't compiling or reselling general, non-individual-specific data. But watch your billing structure: a separately stated "extra copies" charge is taxable.

Law firms, insurers, and others who regularly order records on behalf of clients

The tax treatment turns on whether the records are specifically tied to one identified individual (untaxed) versus general/statistical/publicly-available information compiled across many records (taxable). Vet your vendor's billing model against that line.

Accountants and tax professionals

This opinion cleanly separates three categories that often get confused: (1) personal/individual information (untaxed), (2) general or statistical information services (taxable under §1105(c)(1)), and (3) detective/investigative services (taxable under §1105(c)(8)) — useful shorthand for any client in the records-retrieval, background-check, or information-brokerage space.

Common questions

Q: Are fees for retrieving someone's own medical records subject to New York sales tax?
A: No, generally — retrieving specifically-identified confidential records belonging to one individual, under that individual's own authorization, is excluded personal information, not a taxable information service.

Q: What if the retrieval company also does some investigating to track down the records?
A: As long as the company is simply executing an authorized request (it's given the information and authorization needed to locate the records, and can't seek anything beyond that authorization), it isn't performing a taxable detective service. Genuine investigative activity would change the analysis.

Q: Is a charge for extra copies of the retrieved records taxable?
A: Yes — any separately stated charge for producing additional copies is a taxable sale of tangible personal property.

Q: Does this ruling apply to my records-retrieval business?
A: Not automatically. This is an Advisory Opinion binding only on the petitioner and only as to the facts it described. Whether your service involves specifically-identified personal information versus general/statistical data, and whether any investigative work is involved, both matter a great deal.

Citations and references

Statutes:

• Tax Law §1105(c)(1) (tax on furnishing information; exclusion for personal/individual information)
• Tax Law §1105(c)(8) (tax on protective and detective services)

Prior opinions and cases referenced:

• Weitz & Luxenberg, P.C., TSB-A-06(7)S
• Immediate Medical Records, Inc., TSB-A-92(7)S
• Matter of Hooper Holmes v. Wetzler, 152 A.D.2d 871, lv. den. 75 N.Y.2d 706
• State Farm Mutual Automobile Insurance Co., TSB-A-04(29)S

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_52s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Taxpayer Guidance Division

TSB-A-08(52)S
Sales Tax
December 15, 2008

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S071009A

On October 9, 2007, the Department of Taxation and Finance received a Petition for
Advisory Opinion from SMART Business Advisory and Consulting, LLC, 233 Peachtree Street,
NE, Suite 2500, Atlanta, Georgia 30303. Petitioner, SMART Business Advisory and Consulting,
LLC, provided additional information pertaining to the Petition on May 28, 2008.
The issue raised by Petitioner is whether charges by Petitioners’ client for records
retrieval services described below are subject to sales tax.
Petitioner submitted the following facts as the basis for this Advisory Opinion.
Petitioners’ client (hereinafter “RRS”) performs records retrieval services. RRS is
engaged by medical practitioners to process requests for medical records submitted to the
medical practitioners by individuals, law firms, insurance agencies, state agencies, and others
(hereinafter “requesters”).
The requester submits the retrieval requests to the medical practitioner who maintains the
medical records and the medical practitioner contacts RRS to provide the required retrieval
service. RRS visits the medical practitioner’s office to produce copies of the requested medical
records under the authorization of the requester and provides the copies to the requester. The
requester is invoiced for the service by RRS on behalf of the medical practitioner using pricing
guidelines developed and maintained by New York State for individual requesters or other
standard pricing guidelines. The information provided in accordance with each request for a
record consists of protected medical records and other confidential information that is not
available from any publicly accessible source. RRS performs no investigatory services and
merely produces copies of records maintained by the respective medical practitioner.
Not all retrieval services are billable in New York (e.g., qualified persons cannot be
denied access to patient records solely because of inability to pay). To avoid losses in
circumstances where non-billable services become a significant amount of the total, RRS
monitors the medical practitioner sites through Site Coordinators that keep RRS informed as to
the volume of non-billable versus billable pages. Should this number become too great on the
side of non-billable work, RRS addresses this with the medical practitioner and requests that they
retrieve the records themselves or RRS will employ a mechanism to bill the client (i.e., the
medical practitioner) for the retrieval services provided.
In order to provide medical records, RRS is required to follow federal regulations which
specify that medical institutions are prohibited from disclosing a patient’s medical records unless
the requester signs a medical authorization form that complies with the requirements set forth in

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the federal regulations. The medical authorization forms issued and approved by the requester
authorize RRS to provide copies of protected medical information as specified on the form to the
requester including the following:
•
•
•
•
•
•

records relating to any inpatient, outpatient or emergency room treatment;
clinical charts, reports, correspondence, test results, hand-written notes, etc;
copies of all radiology films, mammograms, CT scans, MRIs and bone scans;
any and all pharmacy or prescription information or records;
information related to the patient’s history of alcohol or substance abuse,
psychiatric treatment, HIV/AIDS testing records, etc.; and
copies of all medical bills.

Once the medical authorization form is received by the medical practitioner, RRS will
obtain copies of the records to be provided to the requester.
Additionally, RRS may be engaged by a requester to obtain copies of an individual’s
medical records. The requester may also provide authorization, either directly or through its
legal representative, to RRS to enable RRS to obtain copies of tax returns from the IRS or state
tax departments. In this case, the requester submits a form authorizing the IRS or a state tax
department to release copies of the requester’s (if an individual) tax documents or transcripts of
such documents, or the tax documents or transcripts of the individual represented by the
requester, to RRS. RRS cannot obtain copies of an individual’s tax returns unless the individual
(or spouse, if a joint return was filed) signs this authorization form. Once this form is provided,
RRS requests copies of the filed tax returns from the IRS or state tax department. A similar
authorization form is required in order to allow RRS to obtain a copy of confidential Social
Security Statements from the Social Security Administration.
If RRS is successful in obtaining records from the sources (e.g., medical practitioner’s
facility, IRS, etc.) identified by the requester; copies then are provided to the requester. The
requester is charged a flat record request preparation fee for the preparation of the request by
RRS whether or not RRS actually retrieves any records, a record custodian fee, a shipping and
handling fee, a record retrieved fee based on the number of pages copied by RRS, and, where
applicable, a long distance or contact charge, a correspondence fee, courier charges, and a
pathology or radiology fee based on the number of these documents copied. If no records are
obtained by RRS, the requester is still charged the flat record request preparation fee, applicable
long distance and shipping and handling fees, and a “no record” statement fee by RRS for its
attempt to obtain the records. The requester is separately billed by RRS for each record request.
Each invoice references the particular individual or case to which the requester refers.
Applicable law and regulations
Section 1105 of the Tax Law provides, in part:

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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 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, . . .
*

*

*

(8) Protective and detective services, including, but not limited to, all services
provided by or through alarm or protective systems of every nature, including, but not
limited to, protection against burglary, theft, fire, water damage or any malfunction of
industrial processes or any other malfunction of or damage to property or injury to
persons, detective agencies, armored car services and guard, patrol and watchman
services of every nature other than the performance of such services by a port watchman
licensed by the waterfront commission of New York harbor, whether or not tangible
personal property is transferred in conjunction therewith.
Opinion
Petitioners’ client, RRS, is a record-retrieval service. RRS is contacted by medical
practitioners to process requests for medical records submitted to the medical practitioners by
individuals, law firms, insurance agencies, or state agencies (requesters). The requested records
that are retrieved from the medical practitioners’ files consist of a patient’s protected personal
medical records which are not otherwise available from any publicly accessible source. These
records cannot be released by medical practitioners unless the appropriate release authorizations
have been signed by the requester.
RRS is also hired by individuals or their duly authorized representatives to obtain copies
of the individual’s confidential medical records, tax return information, social security
information, etc. A requester provides authorization directly to RRS (rather than to the custodian
of the records) to enable RRS to obtain copies of the individual’s medical records from the
medical services provider which may have custody of such records, tax returns from the IRS or

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state tax departments, social security information, or other confidential information from other
custodians of such information.
RRS is providing to the requester specifically identified confidential records containing
confidential information pertaining to the requester (if an individual) or the individual
represented by the requester. The fees paid to RSS as described in this Opinion, are not for the
purchase of property or services subject to sales tax under section 1105.
To the extent that RRS is retrieving specifically identified confidential records on behalf
of an individual, which records contain confidential information pertaining to the individual,
RRS’s services are not services subject to sales tax under section 1105(c)(1) of the Tax Law.
See Weitz & Luxenberg, P.C., Adv Op Comm T & F, March 3, 2006, TSB-A-06(7)S; Immediate
Medical Records, Inc., Adv Op Comm T & F, January 31, 1992, TSB-A-92(7)S. RRS can only
get these records by approaching the specific medical institutions where the individual has
obtained medical treatment, or by approaching other institutions maintaining records, and
presenting the appropriate authorization forms signed by the individual whose records are being
sought, or by the individual's representative. If a medical practitioner or other source provides
RRS with copies of specific confidential records at no charge or for an administrative fee, the
service provided by RRS to the requester of retrieving such records is not subject to sales tax
under section 1105(c) of the Tax Law. Similarly, it would appear that an administrative fee
charged by the custodian of the individual's records for retrieval of such documents which are
deposited, filed or maintained by the custodian, whether or not including a certification thereof,
constitutes neither the sale of tangible personal property taxable under section 1105(a) of the Tax
Law nor the sale of a service taxable under section 1105(c) of the Tax Law.
Although the sale of general information, which does not identify specific individuals,
transcribed from files of medical practitioners, or the sale of analyses of statistical or generic (not
requester-specific) information gleaned from medical files might be considered the sale of a
taxable information service under section 1105(c)(1) of the Tax Law, obtaining such statistical
database information is clearly distinguishable from the service of obtaining exact copies of an
identified individual’s confidential records. Likewise, the sale of information derived from
records that are generally available to the public is distinguishable from the present case. The
sale of such public database information would be taxable under section 1105(c)(1) of the Tax
Law. See Matter of Hooper Holmes v Wetzler, 152 AD2d 871, lv den, 75 NY2d 706; State Farm
Mutual Automobile Insurance Co., Adv Op Comm T & F, December 28, 2004, TSB-A-04(29)S.
However, under the facts of this Advisory Opinion, RRS is retrieving copies of confidential
records for the requester that specifically pertain to the requester (if an individual) or the
individual represented by the requester. RSS is not obtaining information that is generally
available to the public. A charge to the requester for merely obtaining copies of confidential
medical records or other confidential records from a medical practitioner or other custodian and
providing those records to the requester is not subject to sales tax.

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It is noted that RRS’s service of retrieving copies of specific, individual records from
medical practitioners and other sources and providing such copies to requesters does not rise to
the level of a protective or detective service as described in section 1105(c)(8) of the Tax Law.
RRS is furnished with all information needed to locate the particular records as well as the
appropriate legal authorizations needed to retrieve such records. RRS is precluded from seeking
records which it is not specifically authorized to retrieve. Therefore, RRS is not performing
detective activities. See Weitz and Luxenburg, LLC, supra.
However, any separately stated or additional charges by RRS for making additional
copies of records constitutes a receipt from the sale of tangible personal property subject to sales
tax under section 1105(a) of the Tax Law.

DATED: December 15, 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.