NY TSB-A-09(40)S Sales Tax 2009-08-12

Are a publisher's payments to freelance editors who compile e-newsletter content subject to sales tax?

Short answer: Yes. The independent-contractor editors compile and aggregate content from multiple trade publications and write headlines and summaries -- that's a taxable information service under Tax Law 1105(c)(1). The personal-or-individual exclusion doesn't apply, because the content is drawn from publicly available information on the internet rather than information personal to the publisher, and writing short summaries of that public content doesn't change the result. So the publisher's fees to the editors are taxable.

Disclaimer: This is an official New York State Department of Taxation and Finance Advisory Opinion (TSB-A), issued by the Office of Counsel at a taxpayer's request. It is limited to the facts set forth in it and binds the Department only with respect to the petitioner to whom it was issued, and only if that petitioner fully and accurately described all relevant facts; another taxpayer cannot rely on it. It reflects the law, regulations, and Department policy in effect when issued and may since have changed. Taxpayer-identifying details are redacted. New York State and local sales taxes are administered centrally by the Department. This summary is informational only and is not legal or tax advice. Consult a licensed New York tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

The petitioner is an internet company serving engineering/technical communities. It publishes free e-newsletters (delivered by email and on its site) on topics like sensors, coatings, and construction. Editors -- some of them independent contractors -- compile content by searching and aggregating articles from the electronic versions of multiple trade publications, then write a headline and a short paragraph linking to the original source. A group editor reviews and approves the content, and the publisher pays each editor a fee per newsletter. It asked whether those payments to the editors are subject to sales tax.

The Office of Counsel concluded the payments are taxable.

Compiling content is a taxable information service. Collecting, compiling, and analyzing information and furnishing it is a taxable information service under Tax Law 1105(c)(1) (20 NYCRR 527.3(b)(2), Example 4). The editors are doing exactly that.
The personal/individual exclusion doesn't apply. That exclusion covers information personal or individual to the customer that isn't substantially incorporated into reports for others. Here the content is drawn from publicly available internet sources -- widely accessible, single-source information isn't "personal" (Equifax). And the editors summarizing that public content doesn't move it into the exclusion (Waste Resource Associates).
Result: the publisher's fees to the editors are taxable.

What this means for you

Publishers and content aggregators

When you pay someone to gather and compile material from outside sources into a newsletter, digest, or report, you're generally buying a taxable information service -- even if the final product is free to readers, and even if it links back to originals. The taxable event is the compilation service you purchase, not the newsletter's subscription price.

Freelance editors, curators, and researchers

Aggregating publicly available articles and writing summaries/headlines is a taxable information service. Pulling from public internet sources doesn't make it "personal or individual," and summarizing doesn't exempt it. Expect these services to carry sales tax.

Common questions

Q: The newsletters are free and the content is public -- why is this taxable?
A: The taxable item is the editors' compilation service you pay for, not the newsletter. Compiling information is a taxable information service even when the underlying content is public and the newsletter is free.

Q: Doesn't the personal/individual exclusion apply?
A: No. The content comes from publicly available internet sources (widely accessible, not personal), and writing summaries of it doesn't qualify for the exclusion.

Citations and references

Tax Law section 1105(c)(1) (information services; personal/individual exclusion)
20 NYCRR 527.3(b)(2) Example 4 (compiling information = information service)
Matter of Equifax Services, Tax Appeals Tribunal (widely accessible single-source info not personal)
TSB-A-93(48)S (Waste Resource Associates; summaries don't escape information-service tax)

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2009.htm
Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a09_40s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-09(40)S
Sales Tax
August 12, 2009

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S090518A

Petitioner name redacted, asks whether its payments to independent contractors who prepare its
“e- newsletters” are subject to sales tax. We conclude that the charges are taxable because the independent
contractors are performing an information service for Petitioner.
Facts
Petitioner is an internet company that provides specialized search capabilities and information to the
engineering, manufacturing and related technical and scientific communities. Petitioner publishes various
“e-newsletters” that are delivered by e-mail to users of its website who have subscribed to them. The
e-newsletters are also available on Petitioner’s website. There is no subscription fee to receive the
e-newsletters. The e-newsletters, which contain advertising, are designed to appeal to the engineering,
technical, and industrial communities and focus on various product categories. Typical titles are “MEM's
Technology,” “Sensors & Switches,” “Building & Construction,” and “Coatings & Surface Engineering.”
Petitioner owns the copyrights for the e-newsletters.
Each e-newsletter follows a similar format. Newsletter formats generally include “Industry Trends
& Events,” content areas specific to the individual title (for example, the April 14, 2009 issue of “Sensors &
Switches” had articles on “Level Transmitters, Electric and Electromagnetic Sensors, and Switches and
Solenoids”), “Careers & Commentary,” “Diversions,” and a selected blog topic of the month entitled “Share
Your Thoughts.”
An editor is responsible for preparing each e-newsletter. Some of the editors are independent
contractors. The editor selects content that would allow a reader employed in the industry to do his or her job
more effectively by keeping abreast of industry trends, new technologies, and new products. Petitioner’s
editorial guidelines include eight or nine rules regarding the editor’s selection of content. The editors are
instructed to search for and aggregate content from the electronic versions of trade publications from
multiple publishers. Once the content is selected, the editor writes a headline and a short, five- to six-line
paragraph, which, according to Petitioner’s editorial guidelines, “serves as * * * an introduction to the
‘owning/original’ source of content to be linked to.”
A Group Editor reviews and approves the content submitted to Petitioner by the independent
contractor/editor, requests revisions, if needed, and approves finalized e-newsletter content for publication.
Petitioner pays the editor a fee for each e-newsletter that the editor prepares.
Analysis
Tax Law section 1105(c)(1) imposes sales and use tax on the service of “[t]he furnishing of
information by printed, mimeographed or multigraphed matter or by duplicating written or printed matter in
any other manner, including the services of collecting, compiling or analyzing information of any kind or
nature and furnishing reports thereof to other persons.” That section excludes from tax the sale of
“information which is personal or individual in nature and which is not or may not be substantially

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TSB-A-09(40)S
Sales Tax
August 12, 2009

incorporated in reports furnished to other persons.” Here, in preparing the e-newsletters, the independent
contractors working as editors are compiling information from the electronic versions of multiple trade
publications. This compilation constitutes an information service under Tax Law section 1105(c)(1) (Sales
Tax Reg. section 527.3[b][2][Example 4]). The personal and individual exclusion is not applicable because
the articles are drawn from publicly available information on the internet (Id.; Matter of the Petitions of
Equifax Services, Inc, Tax Appeals Tribunal, July 21, 1988 [“The fact that the information was so widely
accessible and derived from a single source precluded the service from being within the personal or
individual exclusion”]). The editors’ summaries of the content found on the Internet do not suffice to
exclude the service from the tax on information service (Waste Resource Associates, Inc., Advisory Opinion,
TSB-A-93(48)S, September 1, 1993).

DATED: August 12, 2009

NOTE:

/S/
Jonathan Pessen
Director of Advisory Opinions
Office of Counsel

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.