We license IT and business-skills e-learning courseware, a searchable reference library, an optional mentoring add-on, and live instructor-led virtual classroom sessions — which of these are subject to New York sales tax, and how do we source tax when our customers' employees are spread across multiple states?

Plain-English summary

SkillSoft, headquartered in New Hampshire with no New York location, licenses a large e-learning library — over 1,600 IT courses and 2,200+ business-skills courses — to businesses under a Master License Agreement. Customers pay a license fee for a set term and number of authorized users, who each get login credentials to access courses hosted on SkillSoft's own servers via Extranet Hosting. The agreement expressly denies customers any ownership rights, forbids reverse engineering, and lets customers make CD-ROM backup copies (deleted at contract end). SkillSoft also offers course customization (combining topics across courses, importing a customer's own proprietary content), a Mentoring Service (expert Q&A), a searchable Referenceware® reference-documentation library, and Virtual Classroom sessions — live, interactive training led by real instructors (business authors, subject experts, CEOs) with chat, polling, audio, and desktop sharing.

The Department addressed five separate questions:

1. Are the e-learning courses taxable? Yes, as a sale of prewritten computer software. Even though customers never receive a downloaded copy (access is purely through SkillSoft's hosted platform), gaining login access is a constructive transfer of possession under the same rule applied throughout 2009 opinions — the customer gains the right to use, control, or direct the software's use, which is what matters, not whether code physically changes hands. Because the software is designed for sale to more than one customer, it's "prewritten," even where course-customization lets a customer combine or import content — combining prewritten modules doesn't make the result "custom" software. The optional Mentoring Service (expert Q&A) doesn't change this: it isn't enough on its own to convert the whole product into an untaxed educational service. However, reasonable, separately stated charges for custom course-modification work remain exempt.

2-3. How is tax sourced when a customer's users are spread across states, and what documentation is needed? Tax follows the location of the licensed users actually using the software, not SkillSoft's own location or server location. Where users are both in and out of New York, SkillSoft must allocate and collect tax only on the New York-attributable portion. Because there's no physical "shipment" to point to (unlike a bill of lading for tangible goods), the Department accepted the customer's own monthly usage report — which the license agreement already requires, including specific street addresses for New York locations — as sufficient documentation for the allocation, absent fraud or SkillSoft's knowledge that the report is false.

4. Is Referenceware® taxable? Yes, as a taxable information service. Referenceware content is drawn from general sources and made equally available to any subscriber — it's not "personal or individual" information tied to one customer, so it doesn't qualify for the information-service exclusion, and receipts are taxable when delivered to New York.

5. Are the live Virtual Classroom sessions taxable? No. Because these are genuinely instructor-led training sessions (not just automated software), they're an educational service, which isn't among New York's enumerated taxable services — reasonable, separately stated charges for this training stay untaxed.

What this means for you

E-learning and corporate training platforms

The dividing line the Department applies again and again: automated, software-driven courseware (even with an optional expert-Q&A add-on) is taxable prewritten software, while genuinely live, instructor-led sessions are an untaxed educational service. If your product mixes both, keep them as distinct, separately priced offerings, and be ready to document which portion of a bundled offering is which.

Multi-state SaaS/software licensors

When there's no physical shipment to document non-New-York use, a customer-furnished usage report (specifying exact locations, including street addresses for New York) can serve as your allocation documentation — build that reporting requirement into your license agreement, as SkillSoft did, rather than trying to invent documentation after the fact.

Reference/documentation library providers

A searchable content library drawn from general sources and equally available to all subscribers is a taxable information service — it doesn't matter that the content might be technical or specialized; what matters is whether it's personal/individual to one customer versus generally available.

Accountants and tax professionals

This opinion is one of the most comprehensive 2009 templates for a multi-product e-learning/SaaS bundle — five separate rulings in one opinion (software license; allocation methodology and documentation; information service; live-training exclusion) — worth using as a full checklist for any client running a similarly bundled offering.

Common questions

Q: We let customers combine or customize course content — does that make our software "custom" and exempt?
A: No. Combining or importing content into otherwise prewritten software doesn't convert the result into exempt custom software; only a reasonable, separately stated charge specifically for the custom-modification work itself is exempt.

Q: We don't have a bill of lading to prove our software was used outside New York — how do we document allocation?
A: A customer-provided usage report specifying the exact locations (with street addresses for New York locations) where the software was used can serve as acceptable documentation, as long as you don't know or have reason to know the report is false.

Q: Our reference library content is technical/specialized — doesn't that make it "personal" information?
A: No — "personal or individual" for this exclusion means information tied specifically to one customer, not generally available to others. If the same content is accessible to any subscriber, it's a taxable information service regardless of how technical it is.

Q: We offer live, instructor-led sessions in addition to our automated courses — are those taxed the same way?
A: No. Genuinely live, instructor-led training (not just software with an occasional expert-chat feature) is an educational service, not an enumerated taxable service, so reasonable separately stated charges for it are untaxed.

Q: Can any e-learning company rely on this exact opinion?
A: No. An advisory opinion binds the Department only as to the taxpayer who requested it and the facts described. Each product component here was analyzed on its own specific facts, and a different company's mix of automated versus live content could come out differently.

Citations and references

Statutes and regulations:

• Tax Law §1101(b)(5), (6), (14) (definition of sale; prewritten software as tangible personal property)
• Tax Law §1105(a), (c)(1), (c)(9) (tax on tangible personal property; information services)
• Tax Law §1115(o) (exemption for separately stated custom software modification/service charges)
• Tax Law §1116(a) (sales to exempt entities not taxable)
• 20 NYCRR §526.7(a), (b), (c)(1), (e), (e)(4) (definitions; constructive possession)
• TSB-M-93(3)S (prewritten software and related services)

Cited cases and opinions:

• Matter of Twin Coast Newspapers, Inc. v State Tax Commn, 101 AD2d 977 (general-source information not personal/individual)
• Matter of Towne-Oller and Associates, Inc. v State Tax Commn., 120 AD2d 873
• Tower Innovative Learning Solutions, Inc., TSB-A-06(5)S (reference-library feature taxable as information service)

Source

• Landing page: NY Sales Tax Advisory Opinions, 2009
• Original opinion: TSB-A-09(3)S

Original ruling text

New York State Department of Taxation and Finance

TSB-A-09(3)S
Sales Tax
January 29, 2009

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

PETITION NO. S070626B

On June 26, 2007, the Department of Taxation and Finance received a Petition for
Advisory Opinion from SkillSoft Corporation, 107 Northeastern Blvd., Nashua, NH 03062.
Petitioner, SkillSoft Corporation, furnished additional information with respect to the Petition on
January 3, 2008.
The issues raised by Petitioner are:

1. Whether Petitioner’s online computer-based training materials (“products”) provided to
   customers in New York are subject to New York State sales tax.
2. Whether Petitioner’s products used by customer’s employees from locations outside
   New York State are subject to New York State sales tax.
3. Whether there would be an appropriate method of allocation, and if so, what
   documentation should be maintained by Petitioner for products accessed by customers’
   employees who are located outside New York State.
4. Whether Petitioner’s Referenceware® product, as described below, is subject to New
   York State sales tax.
5. Whether Petitioner’s video-based training programs, as described below, are subject to
   New York State sales tax.
   Petitioner submitted the following facts as the basis for this Advisory Opinion.
   Petitioner’s corporate headquarters are located in Nashua, New Hampshire. Petitioner
   has no business location in the state of New York. Petitioner is a provider of e-learning content
   and technology products for business and information technology (IT) professionals. Petitioner’s
   IT skills courses give end-users the ability to gain the technical knowledge needed to perform
   their jobs and prepare for IT professional certifications. Petitioner provides more than 1,600
   course titles encompassing software development, operating systems, and server technologies.
   Petitioner’s IT courses also provide preparation for more than 75 current IT professional
   certification exams, although the exams are not included as part of Petitioner’s courses.
   Petitioner’s IT courses feature visual design, interactivity, and reinforcement of learning transfer
   via frequent practice questions, simulations, mentored (Mentoring Service) and self-assessed
   exercises. Mentoring Service enables a user to ask questions relating to specific IT courses or
   the general subject matter of those courses and receive responses from experts in the field of
   information technology.

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Petitioner’s business skills courses focus on the skills and knowledge that are relevant to
various general competencies and functional responsibilities in a business organization setting.
Petitioner provides more than 2,200 course titles and simulations encompassing professional
effectiveness, management/leadership, project management, business strategy/operations,
finance, and human resources. The business skills courses feature visual design, interactivity,
reinforcement of learning transfer via case studies and role play exercises, and online job and
learning aids.
In addition to the above referenced products, Petitioner offers a core of unabridged
Referenceware® documentation that provides online subscribers with the ability to perform
searches and pinpoint information needed for on-the-job performance support and problem
solving. Referenceware® is delivered via a Web-based platform that enables subscribers to
search, browse, and read.
In some cases Petitioner may also provide both live and asynchronous video-based
training that includes interactive programs (Virtual Classroom) with CEOs and thought leaders.
Petitioner does this by providing interactive and live training sessions with business authors,
experts, and CEOs. Virtual Classroom may deliver a class to a live virtual audience, interacting
with participants through chat, polling, audio, desktop sharing, and quizzes.
Petitioner’s product offers a Web-based training module platform that develops and
markets a library of technological based education products. The Web-based platform is
provided by means of Extranet Hosting Services. This is a method of delivering access to
courses whereby Petitioner hosts the course on its server and customers obtain access to the
courses on Petitioner’s servers through an Internet connection. In addition to the delivery of
courses, a proprietary Web-based e-learning application software platform is provided through
Extranet Hosting Services. This application is designed to improve the processes for business
learning as well as to track, launch, and report usage of Petitioner’s courseware delivered to
customers. Petitioner also offers course customization allowing the customer to combine topics
from more than one course and to import a customer’s proprietary information into its course.
Petitioner’s products are made available to customers through a Master License
Agreement (“the Agreement”). Terms of the Agreement provide the following pertinent details:

1. License terms provide for the granting to customers of a nonexclusive,
   nontransferable library license (without rights to sublicense), for a set license
   term, to use and to allow the applicable authorized audience to access and use
   Petitioner’s products/courseware (as described in the business description) for
   internal training purposes only. Authorized audience means the number of
   customer employees and affiliate employees (“licensed users”) for which the
   customer has designated and paid the required license fees. Authorized
   audience members are assigned log-in identifications to access Petitioner’s
   products.

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2. All of Petitioner’s products are the property of Petitioner and/or its third party
   publishers and/or licensors and are protected by copyright and other laws
   relating to proprietary rights. The terms of the agreement do not convey any
   ownership rights of any kind in or to Petitioner’s property to Petitioner’s
   customers. Petitioner and its publishers and licensors have and retain all right,
   title and interest in and to Petitioner’s property.
3. Customers may make copies of Petitioner’s products licensed by the customer in
   CD-ROM format for deployment and backup purposes as reasonably necessary,
   provided that customers reproduce all copyright and other proprietary notices.
   Upon expiration or termination of the Agreement or any exchange or update of
   Petitioner’s products, customers must delete any copies of Petitioner’s products
   from its computers or servers and destroy all hard copies of the same.
4. Customers may not: (a) publish, display, distribute, sell, sublicense, transfer,
   rent, lease, broadcast, loan, disclose or otherwise make available Petitioner’s
   property, or any part thereof, to any third party; (b) reverse engineer,
   disassemble or otherwise attempt to derive source code from Petitioner’s
   product; (c) modify, translate, adapt, alter or create derivative works based on
   Petitioner’s product or any part thereof; (d) remove any proprietary notice
   labels, or trademarks or service marks from Petitioner’s property; (e) merge
   Petitioner’s property, or any component thereof, with another program; (f) have
   any right to any source code for Petitioner’s product; (g) permit any party not
   specifically licensed herein to use Petitioner’s property; (h) use download
   functionality enhancement tools for purposes contrary to those authorized in the
   Agreement.
5. The Agreement term may consist of a one year term, with provisions for renewal
   at expiration, or a multi-year license term. Either the customer or Petitioner may
   terminate the Agreement by written notice to the other party if either party
   commits a material breach which it fails to cure within thirty days of written
   notice of such breach or which by its nature cannot be cured within the thirty
   day period.
6. Customers agree to maintain during the license term and for one year after
   termination of the Agreement, records of all use and copying of Petitioner’s
   product and assignment of all log-in identifications used to access Petitioner’s
   product if distributed by the customer.
7. If Petitioner’s products licensed pursuant to the Agreement are deployed outside
   of Petitioner’s learner management systems, the customer agrees to submit a
   monthly report to Petitioner at the end of each calendar month (monthly usage
   report).

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Sales Tax
January 29, 2009
Petitioner is registered to collect and remit sales tax in New York State.
Applicable law and regulations
Section 1101(b) of the Tax Law provides, in part:
When used in this article for the purposes of the taxes imposed by subdivisions(a),
(b), (c) and (d) of section eleven hundred five and by section eleven hundred ten, the
following terms shall mean:
*

*

*

(5) Sale, selling or purchase. Any transfer of title or possession or both, exchange
or barter, rental, lease or license to use or consume (including, with respect to computer
software, merely the right to reproduce), 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. (Emphasis added)
(6) Tangible personal property. Corporeal personal property of any nature. . .
.Such term shall also include pre-written computer software, whether sold as part of a
package, as a separate component, or otherwise, and regardless of the medium by means
of which such software is conveyed to a purchaser. . . .
*

*

*

(14) Pre-written computer software. Computer software (including pre-written
upgrades thereof) which is not software designed and developed by the author or other
creator to the specifications of a specific purchaser. The combining of two or more prewritten computer software programs or pre-written portions thereof does not cause the
combination to be other than pre-written computer software. Pre-written software also
includes software designed and developed by the author or other creator to the
specifications of a specific purchaser when it is sold to a person other than such
purchaser. Where a person modifies or enhances computer software of which such
person is not the author or creator, such person shall be deemed to be the author or
creator only of such person's modifications or enhancements. Pre-written software or a
pre-written portion thereof that is modified or enhanced to any degree, where such
modification or enhancement is designed and developed to the specifications of a specific
purchaser, remains pre-written software; provided, however, that where there is a
reasonable, separately stated charge or an invoice or other statement of the price given to
the purchaser for such modification or enhancement, such modification or enhancement
shall not constitute pre-written computer software.

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TSB-A-09(3)S
Sales Tax
January 29, 2009
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax. 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, . . .
*

*

*

(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 . . . matter or by
duplicating written or printed matter in any other manner. . . .
Section 1115(o) of the Tax Law provides:
Services otherwise taxable under subdivision (c) of section eleven hundred five or
under section eleven hundred ten shall be exempt from tax under this article where
performed on computer software of any nature; provided, however, that where such
services are provided to a customer in conjunction with the sale of tangible personal
property any charge for such services shall be exempt only when such charge is
reasonable and separately stated on an invoice or other statement of the price given the
purchaser.
Section 526.7 of the Sales and Use Tax Regulations provides, in part:

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Sales Tax
January 29, 2009
(a) Definition. (1) The words sale, selling or purchase mean any transaction in
which there is a transfer of title or possession, or both, of tangible personal property for a
consideration.
(2) Among the transactions included in the words sale, selling or purchase are
exchanges, barters, rentals, leases or licenses to use or consume tangible personal
property.
*

*

*

(b) Consideration. The term consideration includes monetary consideration,
exchange, barter, the rendering of any service, or any agreement therefor. Monetary
consideration includes assumption of liabilities, fees, rentals, royalties or any other
charge that a purchaser, lessee or licensee is required to pay.
(c) Rentals, leases, licenses to use. (1) The terms rental, lease and license to use
refer to all transactions in which there is a transfer for a consideration of possession of
tangible personal property without a transfer of title to the property. Whether a
transaction is a “sale” or a “rental, lease or license to use” shall be determined in
accordance with the provisions of the agreement. . . .
*

*

*

(e) Transfer of possession. (1) Except as otherwise provided in paragraph (3) of
this subdivision, a sale is taxable at the place where the tangible personal property or
service is delivered, or the point at which possession is transferred by the vendor to the
purchaser or his designee.
*

*

*

(4) Transfer of possession with respect to a rental, lease or license to use, means
that one of the following attributes of property ownership has been transferred:
(i) custody or possession of the tangible personal property, actual
or constructive;
(ii) the right to custody or possession of the tangible personal
property;
(iii) the right to use, or control or direct the use of,
tangible personal property.

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TSB-A-09(3)S
Sales Tax
January 29, 2009
Technical Services Bureau Memorandum, State and Local Sales and Compensating Use
Taxes Imposed on Certain Sales of Computer Software, TSB-M-93(3)S, March 1, 1993,
pertaining to the taxability of computer software and certain related services provides, in part:
Effective September 1, 1991, State and local sales and compensating use taxes are
imposed on the sale or use of prewritten computer software and certain related services.
*

*

*

Prewritten computer software is any computer software that is not designed and
developed by the author or other creator to the specifications of a specific purchaser.
The sale of prewritten software includes any transfer of title or possession, any
exchange, barter, rental, lease or license to use, including merely the right to reproduce,
for consideration. . . .
*

*

*

Prewritten software is subject to tax whether sold as part of a package or
separately. Software created by combining two or more prewritten programs or portions
of prewritten programs is still prewritten software subject to tax. The medium by which
the software is transferred to the purchaser has no effect on the software's taxability.
Thus, prewritten software is taxable whether sold, for example, on a disk, tape or by
electronic transmission over telephone lines.
Prewritten software, even though modified or enhanced to the specifications of a
specific purchaser, remains prewritten software subject to tax. However, if a charge for
the custom modification or enhancement is reasonable and separately stated on the
invoice or billing statement, then the separately stated charge for the custom modification
or enhancement is not subject to tax.
*

*

*

Services taxable under section 1105(c) of the Tax Law are exempt from tax under
section 1115(o) of the Tax Law where performed on any computer software. However,
where such services to be performed on software are sold in conjunction with the sale of
tangible personal property, such as prewritten software, the charge for such services is
exempt only if it is reasonable and separately stated on the invoice or billing statement
given to the customer.
*

*

*

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TSB-A-09(3)S
Sales Tax
January 29, 2009
Programming and systems analysis are also exempt services. However, where
these services are rendered in conjunction with the sale of prewritten software, the charge
for the service is exempt from tax only when the charge for the service is reasonable and
separately stated on the invoice or billing statement given to the customer.
Opinion
Issue 1
Petitioner’s Web-based training module provided by means of Extranet Hosting Services
provides e-learning content and technology products for business and information technology
professionals. Pursuant to a Master Lease Agreement (Agreement) for a set license fee and term,
a customer may access Petitioner’s products on Petitioner’s server via the Internet. Petitioner’s
application is designed to improve the processes for business learning as well as to track, launch
and report usage of Petitioner’s courses delivered to customers.
Prewritten computer software is included within the definition of tangible personal
property, “regardless of the medium by means of which such software is conveyed to a
purchaser.” Section 1101(b)(6) of the Tax Law. The sale of prewritten computer software is
subject to tax as the sale of tangible personal property. See sections 1101(b)(6) and 1105(a) of
the Tax Law. Sale is defined as “Any transfer of title or possession or both, exchange or barter,
rental, lease or license to use or consume (including, with respect to computer software, merely
the right to reproduce), conditional or otherwise, in any manner or by any means whatsoever for
a consideration, or any agreement therefor.” Section 1101(b)(5) of the Tax Law. Section
526.7(e) of the Sales and Use Tax Regulations provides generally that “a sale is taxable at the
place where the tangible personal property or service is delivered, or the point at which
possession is transferred by the vendor to the purchaser or his designee.” Section 526.7(e)(4) of
the Sales and Use Tax Regulations further provides that, with respect to a “license to use,” a
transfer of possession has occurred if there is a transfer of actual or constructive possession, or if
there has been a transfer of “the right to use, or control or direct the use of, tangible personal
property.” The location of the code embodying the software is irrelevant, because the software
can be used just as effectively by the customer even though the customer never receives the code
on a tangible medium or by download.
The accessing of Petitioner’s software by Petitioner’s customers constitutes a transfer of
possession of the software, because the customer gains constructive possession of the software,
and gains the “right to use, or control or direct the use of” the software. Petitioner provides
training materials and the ability to track the customer’s use of the materials. All tasks relating
to the use of the training materials and tracking are provided through the customer’s use of
Petitioner’s software modules. This is true even if no “copy” of the software is transferred to the
customer. Accordingly, the license fee received by Petitioner in this instance for the use of its
Web-based training module by a customer in New York is subject to State and local sales tax,
provided that the training module is prewritten software.

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Prewritten software is software that is not designed and developed by the author or other
creator to the specifications of a specific purchaser. See section 1101(b)(14) of the Tax Law.
Since Petitioner's software products in this case are designed for sale to more than one customer,
Petitioner's software is prewritten software. Therefore, Petitioner's sales of licenses to use its
software are subject to sales and use tax under section 1105(a) of the Tax Law. The lease or
license of such prewritten software will not be subject to tax if the purchaser is an exempt entity
under section 1116(a) of the Tax Law.
While certain of Petitioner’s e-learning courses give students the option to contact experts
in the field (Mentoring Service), this access to technical information does not appear sufficient to
transform Petitioner’s sale of software into the provision of an educational service.
Petitioner also offers course customization services which allow the customer to combine
topics from more than one course as well as import the customer’s proprietary information into
the course. The combining of two or more prewritten software programs or prewritten portions
of such programs does not cause the combination to be other than prewritten software. See
section 1101(b)(14) of the Tax Law. Petitioner’s receipts, therefore, for the prewritten course
modules remain subject to sales tax. However, Petitioner’s charges to customers for providing
custom course development, presumably include Petitioner’s cost to modify its prewritten
software. Where there is a reasonable, separately stated charge for custom modification of the
modules, such modification would not constitute prewritten software and would not be subject to
tax when performed for and sold to the customer who initially requested and purchased such
modification. See section 1101(b)(14) of the Tax Law and Technical Services Bureau
Memorandum, State and Local Sales and Compensating Use Taxes Imposed on Certain Sales of
Computer Software, March 1, 1993, TSB-M-93(3)S.
Issues 2,3
The situs of the sale of software for purposes of determining the proper incidence of tax
is the location associated with the license to use (i.e., the location of the customer’s employees
that use the software). If the customer’s employees that use the software are located both in and
out of New York State, Petitioner should collect tax based on the portion of the receipt
attributable to the employee users located in New York. The portion of Petitioner’s receipts
from licensing its software, attributable to licenses used by the purchaser outside New York, are
not subject to New York State and local sales and use taxes. The determination of the proper
local tax rate and jurisdiction for a sale of software is also based on the location associated with
the license to use the software.
A seller’s bill of lading or other shipping document that shows the out of state delivery of
goods and services is usually considered sufficient documentation of the nontaxablity of the
sales. In the present case it appears Petitioner’s Agreement requires the customer to maintain
records of the use of Petitioner's software and assignments of all log-in identifications used to
access the software, and to submit a monthly usage report. Petitioner may require the customer

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January 29, 2009
to report all of the customer locations where the software is used. These reports are relevant
evidence in regard to the question of how Petitioner should allocate its receipts for the sale of its
software between in-state and out-of-state sales. Such a report by the customer providing
Petitioner the specific locations where the customer uses the software would, absent a showing
of fraud or knowledge on the part of Petitioner that the contents of the report are untrue, form an
acceptable basis for Petitioner to allocate its charges for the use of its software between
New York use and out-of-state uses. The report must contain a statement by the customer
specifying the locations including street addresses for any New York locations. The report
should acknowledge that it is being furnished for the purpose of allowing Petitioner to determine
the appropriate amount of New York State and local sales and use taxes imposed and to be
collected from the customer.
Issue 4
Petitioner offers a core of unabridged Referenceware® documentation that provides
online subscribers the ability to perform searches to pinpoint information needed for on-the-job
performance support and problem solving. Referenceware® is delivered via a Web-based
platform that enables subscribers to browse, read and search with an Internet connection.
Section 1105(c)(1) of the Tax Law imposes sales tax on the furnishing of information by printed,
mimeographed matter or by duplicating written or printed matter in any other manner, including
collecting, compiling or analyzing information of any kind or nature and furnishing reports
thereof to other persons. Section 1105(c)(9) of the Tax Law imposes sales tax on the furnishing
of information by means of telephony and telegraphy. However, tax is not due on the receipts
from the sale of information that is personal and individual in nature and is not or may not be
substantially incorporated into reports furnished to others.
Where the data provided in Petitioner’s digitized collections (Referenceware®) is
gleaned from general sources, and data that is available to any one customer is available to
others, the information is not personal or individual and does not qualify for the exclusion in
section 1105(c)(1) of the Tax Law. See Matter of Twin Coast Newspapers, Inc. v State Tax
Commn, 101 AD2d 977, appeal dismissed 64 NY2d 874; Matter of Towne-Oller and Associates,
Inc. v State Tax Commn., 120 AD2d 873. Accordingly, it appears that receipts from
Petitioner’s sales of Referenceware® over the Internet are subject to sales tax when delivered to
locations within New York State. See Tower Innovative Learning Solutions, Inc., Adv Op
Comm T&F, February 2, 2006, TSB-A-06(5)S.
Issue 5
In some instances Petitioner provides both live and asynchronous video-based training
that includes a Virtual Classroom with interactive and live training sessions delivered by
business authors, experts and CEOs to a live virtual audience, interacting with participants
through chat, polling, audio, desktop sharing, and quizzes. Under these circumstances it appears
that Petitioner may be providing a training class led by an instructor. Such training services are

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Sales Tax
January 29, 2009
considered to be educational services, and are not included among the enumerated services
subject to sales and use tax under section 1105(c) of the Tax Law. Reasonable separately stated
charges for such an educational service are not subject to sales tax.

DATED: January 29, 2009

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.