Are fees an S corporation collects for an ordained minister's services (weddings, funerals, sermons, counseling) subject to NY sales tax?

Plain-English summary

The petitioner is an ordained minister who charges fees -- collected through her S corporation -- for conducting religious services, sermons and topical public speaking, weddings, blessings, funerals, and spiritual counseling. She also runs a free public blog of sermons. She asked whether the corporation must collect sales tax on these fees.

The Office of Counsel concluded no:

• Only listed services are taxable. Sales tax applies only to the services specifically enumerated in Tax Law 1105(c) (information services, services to real or tangible personal property, etc.). Ministerial services are not on that list, so the corporation doesn't collect sales tax on them.
• The free blog isn't taxable. The sermons posted publicly aren't an information service under 1105(c)(1), and in any event aren't taxable because they're provided free, not sold (TSB-M-10(7)S).
• Future 501(c)(3) status. If the IRS approves the petitioner's 501(c)(3) application, she may also qualify for New York sales-tax exempt-organization status -- but that requires a separate application (Form ST-119.2) with the IRS determination letter and required documentation.

What this means for you

Clergy, officiants, and counselors

Charging for weddings, funerals, sermons, or spiritual counseling doesn't make you a sales-tax vendor -- these aren't enumerated taxable services in New York. Running the income through an S corporation doesn't change that.

Free content stays free of tax

Posting sermons or other material for free isn't a taxable sale. Tax can only attach to a charge for an enumerated service.

Common questions

Q: I bill my ministerial work through a corporation -- does that trigger sales tax?
A: No. The entity collecting the fee doesn't matter; the services themselves aren't enumerated as taxable, so no sales tax is due.

Q: Is my free sermon blog an information service?
A: No -- and even if it were, it's provided without charge, so there's nothing to tax.

Q: If I get 501(c)(3) status, am I automatically exempt in New York?
A: No. You must separately apply with Form ST-119.2 and include your IRS determination letter.

Citations and references

• Tax Law section 1105(c) (sales tax on enumerated services)
• Tax Law section 1105(c)(1) (information services)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2013.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a13_40s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-13(40)S
Sales Tax
October 25, 2013

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

PETITION NO. S130625C

The Department of Taxation and Finance received a Petition for Advisory Opinion from
name and address redacted. Petitioner asks whether fees received in relation to services she
performs as an ordained minister and sole stockholder of a subchapter S corporation are subject
to sales tax.
We conclude that, because the ministerial-related services are not listed in the Tax Law
as taxable services, Petitioner’s corporation does not have to collect sales tax on its charges for
those services.
Facts
Petitioner is an ordained minister providing the following services for monetary fees:
conducting religious services, offering sermons and topical public speaking, and performing
weddings, blessings, funerals and spiritual counseling. Petitioner is the sole stockholder of a
sub-chapter S corporation, which receives the monetary fees for Petitioner’s services.
Petitioner also actively runs an online website that hosts a blog featuring sermons and
other topical discussions related to Petitioner’s beliefs. The blog is accessible to the public and is
available free of charge.
Furthermore, Petitioner states that she intends to apply for Internal Revenue Code (IRC)
§501(c)(3) tax-exemption status.
Analysis
Tax Law § 1105(c)(1)-(10) imposes sales tax on the receipts from sales derived from
certain specified services, such as information services, services to real and tangible personal
property, etc. See Tax Law §1105(c); Publication 750, A Guide to Sales Tax in New York State
(June 2013).
The services provided by Petitioner in her capacity as an ordained minister do not fall
under any of the specific services subject to sales tax. Furthermore, the sermons and topical
discussions posted on a blog for public consumption do not fall within the “information services”
subject to tax under §1105(c)(1), and would not be taxable in any event because they are not
sold, but rather are provided without charge. See TSB-M-10(7)S.

-2-

TSB-A-13(40)S
Sales Tax
October 25, 2013

With regard to Petitioner’s intent to apply for IRC §501(c)(3) tax-exempt status, if
Petitioner’s application is approved by the IRS, she may also qualify for sales tax exempt
organization status for New York State. A separate application (Form ST-119.2, Application for
an Exempt Organization Certificate) must be submitted with both the required documentation
listed in the instructions and a copy of the §501(c)(3) determination letter from the IRS.

DATED: October 25, 2013

NOTE:

/S/
DEBORAH R. LIEBMAN
Deputy 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. The information provided in this
document does not cover every situation and is not intended to replace the law or
change its meaning.