Are a translation company's receipts for document, telephone, and on-site translation subject to sales tax?

Plain-English summary

The petitioner provides translation services: it translates documents (received and returned electronically), plans to offer real-time telephone speech translation (per-minute, customer dials an 800 number; the petitioner doesn't provide the phone link), and sometimes supplies an on-site interpreter. Occasionally it also "dresses up" a translated document (better layout, colors, photos) for a separate charge. It asked whether its receipts are subject to sales/use tax.

The Office of Counsel concluded the translation services are not taxable, but selling an extra hard copy is.

• Translation is a nontaxable professional service. Sales tax reaches tangible personal property (Tax Law 1105(a)) and an enumerated list of services (1105(c)); services not on the list aren't taxed. Translation is a professional service not on the list (Tannenbaum), whether oral, real-time, or delivered electronically.
• Not an information service or telephone service. Translating doesn't furnish an information service (1105(c)(1)/(9)), and because the petitioner doesn't provide the transmission link, it isn't selling taxable telephone service.
• "Dress-up" work isn't taxable. Separate charges for improving a translated document's layout/appearance are also nontaxable.
• Extra hard copies are taxable. If the petitioner gives the customer an additional hard copy (paper, CD-ROM, disk) on top of the electronic translation, that copy is a taxable sale of tangible personal property (1105(a)) when delivered in New York.

What this means for you

Translators and interpreters

Your core work -- written, phone, or in-person translation -- is a nontaxable professional service, and delivering it electronically keeps it that way. Even optional formatting/"dress-up" charges stay nontaxable when they're part of the translation deliverable.

Watch the tangible deliverable

The taxable line is handing over a physical copy as a separate item. Electronic delivery isn't taxed; an additional paper/CD/disk copy delivered in New York is a taxable sale.

Common questions

Q: Is phone or real-time translation taxable?
A: No. It's a professional service, and since you don't provide the telephone transmission link, it's not taxable telephone service either.

Q: We charge separately to reformat/beautify the translation -- is that taxable?
A: No. Separate "dress-up" charges (layout, colors, photos) on a translation aren't taxable.

Q: When do we owe tax?
A: Only when you sell an additional hard copy (paper, CD-ROM, disk) of the translation delivered in New York -- that's a taxable sale of tangible personal property.

Citations and references

• Tax Law section 1105(a) (sales tax on tangible personal property)
• Tax Law section 1105(c) (enumerated taxable services; unlisted services not taxable)
• Tax Law section 1105(c)(1) and 1105(c)(9) (information services)
• Tannenbaum v State Tax Commission, 46 AD2d 400 (professional services not taxable)

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_46s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-09(46)S
Sales Tax
October 9, 2009

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

PETITION NO. S090413B

On April 13, 2009, the Department of Taxation and Finance received a Petition for Advisory
Opinion from name and address redacted. Petitioner asks whether its receipts pertaining to translation work
are subject to sales and use tax. Petitioner’s receipts for providing translation services are not subject to sales
and use tax. However, charges by Petitioner for additional hard copies of a translated document will be
subject to sales tax.
Facts
Petitioner is in the business of providing translation services. One service is the translation of
documents into different languages. Petitioner receives from customers the documents to be translated in an
electronic format by email or by upload software. Petitioner sends the translated version of the document to
its customer electronically. Infrequently, customers will request that Petitioner “dress up” a translated
document, which can include improving the layout of the document, adding colors or photographs to a
document, or making other changes to a translated document so it is more visually appealing. This dress-up
service is provided because a translated document may need to be altered to make translated words more
visually appealing or to make the layout work. Petitioner bills a separate charge for dress up work.
Petitioner plans to offer real time speech translation services for parties communicating by
telephone. Petitioner will charge customers on a per-minute basis to translate what is being said by the
communicating parties. The customer will have to dial a 1-800 telephone number to access this service.
Petitioner will not be providing the transmission link between the parties.
On some occasions, Petitioner is hired to provide a translator at the site of a meeting.
Analysis
Section 1105(a) of the Tax Law imposes tax on “[t]he receipts from every retail sale of tangible
personal property, except as otherwise provided in this article.”
Section 1105(c) of the Tax Law imposes sales tax on all receipts from the sale, except for resale, of
certain specified services. Services which are not specifically described in the statute are not subject to sales
tax.
Petitioner in translating documents is not providing its customers with information services for
purposes of Tax Law sections 1105(c)(1) and 1105(c)(9). Since Petitioner does not provide the transmission
link for telecommunications, it is not selling telephone and telegraph service for purposes of sales tax. In
sum, Petitioner’s translation services are professional services, which are not enumerated services subject to
sales tax under Tax Law §1105(c). Cf. Tannenbaum v State Tax Commission, 46 A.D.2d 400, 362 NYS2d
608 (1975). This is true whether the translation services are oral or real time services, or the translated
version of a document is sent to a customer electronically. Separate charges for performing dress-up work,
as described above, are also not taxable. However, if Petitioner provides a customer with a hard copy

-2-

TSB-A-09(46)S
Sales Tax
October 9, 2009

version of a translated document (e.g., a paper copy, CD ROM, disk) in addition to transmitting the
translation electronically, the hard copy will constitute the sale of tangible personal property for purposes of
sales tax. The sale of the additional hard copy document will be subject to tax under Tax Law §1105(a)
when delivered to a customer in New York.

DATED: October 9, 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.