Are a CLE provider's self-study courses delivered on CDs/DVDs subject to NY sales tax, and what about its sales of CDs, DVDs, and books by themselves?

Plain-English summary

The Petitioner is an accredited continuing legal education (CLE) provider in New York. Besides live seminars, it sells self-study programs that deliver recorded seminar content on CDs/DVDs, plus a CD-ROM of reference materials and an affirmation form. To earn CLE credit, the attorney must "take the course," write down codes that appear throughout the program (proving they watched it), and return the affirmation form to get a certificate of completion. Students may call the presenter with questions. The Petitioner also sells books and reference materials on their own, and sometimes extra affirmations/CD-ROMs.

The Office of Counsel concluded:

• CLE self-study programs = nontaxable educational service. Section 1105(c) taxes only enumerated services, and educational services provided by a school are not on that list. The student's primary objective is to complete a course of study and earn CLE credit -- the same credit a paying live-seminar attendee earns -- and the student can contact the presenter with questions, just like a classroom. So the charge for the CD/DVD course content, the reference CD-ROM, and the affirmation (and additional affirmations/CD-ROMs sold as part of the course) is a charge for an educational service, not for tangible personal property. No tax is due.
• Plain media and books = taxable tangible personal property. Separately, the Petitioner sells CDs, DVDs, CD-ROMs, books, and printed reference materials with no CLE credit attached. Those are corporeal personal property (section 1101(b)(6)) and their retail sale is taxable under section 1105(a). Because the Petitioner is located in New York, it is a vendor that must register, collect tax on taxable sales delivered to New York purchasers, file returns, remit, and keep records.

What this means for you

CLE / professional-education providers

If the customer's real purchase is the course and the credential -- they must complete the program and return an affirmation to earn CLE (or CPE/CE) credit -- the charge is a nontaxable educational service, even though it's delivered on a disc. The physical media riding along (the course CD/DVD, the reference CD-ROM, the affirmation) are part of that educational service.

But selling content as merchandise is taxable

The moment you sell a CD, DVD, book, or reference set as a standalone product with no credit earned, you're selling tangible personal property -- collect sales tax based on where you deliver it in New York.

You still have to register and collect

A New York provider that makes any taxable sales must register for sales tax, collect on the taxable items, and file/remit.

Common questions

Q: Are my self-study CLE courses on CD/DVD taxable?
A: No -- they're a nontaxable educational service because the student takes the course and returns an affirmation to earn CLE credit. The discs are part of that service.

Q: What about selling a DVD or a legal book with no CLE credit?
A: That's a taxable sale of tangible personal property. Collect tax based on where it's delivered in New York.

Q: Do extra affirmations and reference CD-ROMs sold with the course get taxed?
A: No -- when they're part of the CLE course (sold to earn credit), they're part of the nontaxable educational service.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner. Use it as guidance and confirm your own facts.

Citations and references

• Tax Law section 1105(c) (sales tax on enumerated services; educational services not enumerated)
• Tax Law section 1105(a) (sales tax on retail sales of tangible personal property)
• Tax Law section 1101(b)(6) (definition of tangible personal property)
• Tax Law section 1134 (registration; person required to collect tax)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2015.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a15_26s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-15(26)S
Sales Tax
July 10, 2015

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

PETITION NO. S131112A

The Department of Taxation and Finance received a Petition for Advisory Opinion from
REDACTEDREDACTEDREDACTEDREDACTEDREDACTEDREDACTEDREDACTED
(Petitioner). Petitioner asks whether receipts from its sales of continuing legal education (CLE)
self-study programs delivered via compact disks (“CDs”) and digital video disks (“DVDs”) are
subject to State and local sales tax. It also asks whether sales of CDs, DVDs, and other items by
themselves are subject to tax.
We conclude that Petitioner’s receipts from its sales of CLE self-study programs offering
CLE credit delivered via CDs and DVDs are not subject to State and local sales tax if Petitioner
includes its affirmation form for the customer to return to Petitioner upon completing study of
the program materials. However, Petitioner’s receipts from its sales of CDs and DVDs without
CLE credit and from its sales of books and reference materials on a variety of legal subjects are
subject to tax if Petitioner delivers them to customers at locations in this State.
Facts
Petitioner provides Continuing Legal Education ("CLE") courses in the State of New
York. The New York State Continuing Legal Education Board requires attorneys to maintain
their professional competence by continuing their legal education through the period of their
active practice of law. Petitioner and its CLE courses have been accredited by the CLE Board.
Petitioner offers live seminars on a variety of legal topics enabling attorneys ("students")
to earn required CLE credit hours each year. In addition to offering live seminars, Petitioner also
offers CLE credit through self-study programs. The purpose of the self-study programs is to earn
the required CLE credit hours. The self-study seminar content is delivered via CDs or DVDs.
Petitioner’s live seminars are recorded and replicated onto CDs and DVDs for distribution as
self-study seminars. Students wishing to take CLE self-study seminars order self-study seminars
online or by printing Petitioner’s order form and mailing it with the applicable payment to
Petitioner. Petitioner will then mail the self-study seminar content to the student via common
carrier. Generally, the self-study seminar content consists of a CD or DVD containing the course
content, a CD-ROM of the reference materials in pdf format, and the related affirmation form. A
student who wishes to purchase additional affirmations for other attorneys in his or her law firm
may do so at additional cost. The cost for the additional affirmations and additional CD-ROMs
containing the reference materials is a separately stated charge. During the course of the selfstudy seminar, the student is required to write down a series of codes that appear at intervals
throughout the seminar as evidence that the student viewed the entire course content. At the
conclusion of the self-study seminar, the student is required to return the affirmation form,

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TSB-A-15(26)S
Sales Tax
July 10, 2015

certifying completion of the seminar, in order to obtain a CLE certificate of completion from
Petitioner.
Instructors of the live seminars are attorneys who are subject matter experts in their field.
These instructors and other personnel of Petitioner are available to answer questions during live
seminars. Students that take the self-study seminars may contact Petitioner with any questions
regarding the seminar content. Given that the seminar content is highly specialized, Petitioner
will provide the student with the instructor's contact information so the instructor may be
contacted directly with any questions.
In addition to offering live seminars and CLE self-study seminars, Petitioner also sells
books and reference materials on a variety of legal subjects. Orders for books and reference
materials may be placed online, via telephone or may be mailed or faxed in using an order
sheet.
Analysis
Tax Law § 1105(c) imposes sales tax on receipts from sales, other than for resale, of
specific enumerated services. Educational services provided by a school are not among the
specific services taxable under § 1105(c). A school’s transfer of course materials and books to
its students that are included in its charge for the course is considered part of the educational
services provided by the school and the transfer of these items is not subject to sales and use tax.
See TSB-A-06(4)S.
Petitioner’s students’ primary objective in purchasing its self-study materials is to
complete courses of subject matter study and earn CLE credits. When Petitioner sells the selfstudy material, i.e., the CD or DVD, the CD-ROM of reference materials and the affirmation
form, or the additional affirmations and CD-ROMS, it is providing the students with the means
by which they can complete courses of study at home or in the office. In this way, students earn
the same CLE credit for the course as students who pay to attend Petitioner’s live seminars.
Each student is required to “take the course” and complete and return the affirmation that
Petitioner furnished as part of the course in order to earn the CLE credit. Petitioner affords
students the opportunity to call and ask questions of the course presenter, just as students in a
college or school can ask questions of their teachers, and just as students at Petitioner’s live
seminars can do. Therefore, Petitioner is providing an educational service and its charges to its
students who purchase a CLE course with an affirmation for CLE credit are charges for
Petitioner’s educational services and are not charges for the sale of tangible personal property,
i.e., the CD or DVD and CD-ROM. Accordingly, Petitioner is not required to collect tax on its
charges for its CLE courses. See TSB-A-13(1)S, TSB-A-06(6)S, and TSB-A-06(5)S.
Separate and apart from its CLE courses, Petitioner also sells CDs, DVDs, CD-ROMs,
books, and other tangible personal property. State and local sales taxes are imposed on retail
sales of tangible personal property in this State. See Tax Law § 1105(a). Tax Law § 1101(b)(6)
defines “tangible personal property” to mean corporeal personal property of any nature. CDs,
DVDs, CD-ROMs, books, and printed reference materials are corporeal personal property.
Because Petitioner is located in this State and makes sales of such tangible personal property, it
is a vendor and a person required to collect tax. Thus, it must register for sales tax purposes,

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TSB-A-15(26)S
Sales Tax
July 10, 2015

collect tax on taxable sales delivered to purchasers in New York, file returns, remit tax required
to be collected, and keep records. See Tax Law §§ 1101(b)(8), 1131(1), 1132, 1134, 1135, and
1136; 20 NYCRR § 525.2(A)(2) and (3).

DATED: July 10, 2015

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.