Does a sole proprietor offering CPR and first-aid instruction need a sales-tax Certificate of Authority?

Plain-English summary

An individual planning to open a sole-proprietor CPR and first-aid instruction business asked whether he needs a sales-tax Certificate of Authority (and/or an assumed-name "d/b/a" certificate). His business will offer in-person CPR and first-aid training to the public; the class price includes a training manual, which he may also offer for sale on its own.

The Office of Counsel concluded:

• In-person CPR/first-aid training is not a taxable service. It is not among the enumerated services subject to sales tax.
• Manual included free with the class: If the manual comes with the training at no additional charge, it is treated as an integral component of the nontaxable training service, not a separate sale of tangible personal property (citing TSB-A-16(6)S). So the instructor would not need a Certificate of Authority. But he must pay sales tax when he buys those manuals and cannot claim the resale exemption (20 NYCRR 526.6(c)(7)).
• Manuals sold separately: If he charges separately for manuals, or sells them to people who do not attend the training, he is selling taxable tangible personal property. Then he must apply for a Certificate of Authority at least 20 days before commencing business, collect sales tax, file returns and remit. He may buy manuals intended for resale tax-free by giving the vendor a properly completed Form ST-120 Resale Certificate — but if a resale-purchased manual is later given to a student for free (or otherwise used), he owes use tax at the time of that use (20 NYCRR 531.3(a)(2)).
• Assumed-name ("d/b/a") certificate: Whether one is required is outside the Tax Department's authority — he should contact the Department of State.

What this means for you

Instructors and other service providers

Providing a nontaxable service generally does not require a Certificate of Authority. The question is whether you also sell taxable goods or services. If a printed item (manual, handout, materials) is bundled into the service at no separate charge, it usually rides along as part of the nontaxable service — but you, the provider, pay tax on buying it.

The line is "separately charged / sold to non-students"

The moment you price the manual separately or sell it to someone who is not buying the class, you are a vendor of tangible personal property: register, collect, file and remit. At that point you can buy inventory for resale tax-free with Form ST-120 — but owe use tax on any copies you end up giving away or using yourself.

Wrong agency for the d/b/a question

The Tax Department will not opine on assumed-name certificates. Direct "do I need a d/b/a?" questions to the Department of State.

Common questions

Q: If I give the manual away with the class, do I need to register for sales tax?
A: No — the manual is part of the nontaxable training. But you must pay sales tax when you purchase the manuals, with no resale exemption.

Q: When do I need a Certificate of Authority?
A: When you sell the manuals separately, or sell them to people who do not take your class — that is a taxable sale of property. Apply at least 20 days before you start.

Q: Can I buy the manuals tax-free for resale?
A: Only the copies you actually intend to resell, using Form ST-120. If you later give a resale-purchased copy to a student for free, you owe use tax on it.

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 1132 (persons required to collect sales tax; Certificate of Authority)
• Tax Law section 1105(a) (sales tax on retail sales of tangible personal property)
• Tax Law section 1105(c) (enumerated taxable services)
• 20 NYCRR 526.6(c)(7) (no resale exemption where property is used, not resold)
• 20 NYCRR 531.3(a)(2) (use tax on resale-purchased property later given away)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2016.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a16_23s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-16(23)S
Sales Tax
July 8, 2016

Office of Counsel

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S150617A

The Department of Taxation and Finance received a Petition for Advisory Opinion from
REDACTEDREDACTEDREDACTEDREDACTED (“Petitioner”). Petitioner asks whether his
business of CPR instruction requires either an assumed name certificate and/or a Certificate of
Authority to collect New York State and local sales taxes.
We conclude that Petitioner is required to obtain a Certificate of Authority if he will be
selling tangible personal property or services subject to New York State and local sales taxes.
Facts
Petitioner intends to open a business as a sole proprietor under an assumed business
name, and asks whether he must obtain a “doing business as” or a sales tax Certificate of
Authority, or both. Petitioner’s business will consist of in-person instruction in cardiopulmonary resuscitation (“CPR”) and first aid to members of the general public. The charge for
the training will also include a training manual. The training manual may also be separately
offered for sale.
Analysis
Preliminarily, it is not within the scope of the Department’s authority or expertise to
opine about whether an assumed name certificate (commonly known as a “doing business as” or
d/b/a) is needed for a particular business. Petitioner may want to contact the Department of State
for information on assumed name certificates.
Petitioner must obtain a sales tax Certificate of Authority if he intends to sell any taxable
tangible personal property or taxable services. As relevant here, Tax Law § 1132 defines a
person required to collect sales tax as “every vendor of tangible personal property or services.”
Every person required to collect sales tax must file a Certificate of Registration with the
Commissioner at least 20 days prior to commencing business or opening a new place of business.
The provision of in-person CPR and first-aid training is not among the services subject to sales
tax. If Petitioner provides a training manual with the training for no additional charge, the
training manual would be considered to be an integral component of the broader service and
Petitioner would not be considered to be selling tangible personal property subject to sales tax.
See TSB-A-16(6)S. Accordingly, because Petitioner would not be selling tangible personal
property or services subject to sales tax, he would not be required to obtain a Certificate of
Authority. However, he would be required to pay sales tax on his purchase of the training
manuals and could not claim the resale exemption. See 20 NYCRR § 526.6(c)(7).
.

-2-

TSB-A-16(23)S
Sales Tax
July 8, 2016

If Petitioner separately charges for the training manuals, or sells the training manuals to
persons who do not attend the in-person training, Petitioner would be selling tangible personal
property subject to sales tax. Under these circumstances, Petitioner would be required to apply
for a Certificate of Authority at least 20 days prior to commencing business. Furthermore,
Petitioner would be required to collect sales tax from his customers on sales of the training
manuals, file periodic sales tax returns and remit the tax on his sales to the Department.
Petitioner also would be able to claim the resale exclusion for purchases of any training manuals
that he intends to sell separately to his customers. Petitioner should timely provide the vendor of
the training manuals a properly completed Form ST-120 Resale Certificate in order to purchase
the training manuals exempt from sales tax. If Petitioner purchases training manuals for resale
that are later provided to students of his training class without charge, or makes another taxable
use of the training manuals, Petitioner must pay sales tax at the time of such use and remit it to
the Department with the sales tax return covering the period in which the taxable use occurred.
See 20 NYCRR § 531.3(a)(2).

DATED: July 8, 2016

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

NOTE:

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.