NY TSB-A-20(38)S Sales Tax 2020-07-28

Is a service that lets each customer log in and run reports on its own vehicle-maintenance data a taxable information service in New York?

Short answer: No. The service is a non-taxable information service. Although furnishing information is generally taxable, New York excludes information that is personal or individual in nature and not substantially incorporated into reports furnished to others. Because each customer can access and run reports on only its own vehicles' maintenance data, and that data isn't sold or shared with anyone else, the service falls within the exclusion and is not subject to sales tax.

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

A company maintains fleets of vehicles and keeps detailed maintenance records for each customer. For a separate monthly per-vehicle fee, it lets a customer log into a website to access its own data and run reports — for example, how many oil changes were done in January, or how often a specific vehicle came in. A customer can only see its own vehicles; it can't reach other customers' data, and the company doesn't sell the maintenance information to third parties. The company asked whether this database service is taxable.

The Office of Counsel concluded it is not taxable. New York taxes "information services" — collecting, compiling, or analyzing information and furnishing reports — but excludes information that is personal or individual in nature and is not substantially incorporated into reports furnished to other people. The database here is an information service (it compiles and organizes data), but because each customer gets reports drawn only from its own data, and that data isn't folded into reports given to others, it fits squarely within the personal-or-individual exclusion in Tax Law § 1105(c)(1).

What this means for you

SaaS, data, and reporting providers

The dividing line for taxable information services is whether the output is customer-specific and siloed (excluded) versus drawn from a shared/common database that feeds reports to many customers (taxable). Keeping each customer's data walled off and only reporting it back to that customer points to non-taxable treatment.

Fleet, telematics, and recordkeeping services

A portal that just lets a customer query and report on its own records is generally a non-taxable personal/individual information service — not a taxable database subscription.

Accountants and tax professionals

Document that the information furnished is personal or individual and not substantially incorporated into reports to others (the § 1105(c)(1) exclusion, applied as in TSB-A-10(20)S). Shared-pool or benchmarking products that mix customers' data change the analysis.

Common questions

Q: Isn't selling access to a database always taxable?
A: No. Furnishing information is taxable, but information that is personal or individual to the customer — and not put into reports for others — is excluded.

Q: What made this service non-taxable?
A: Each customer could only see and report on its own vehicles' data, and the company didn't share or sell that data to anyone else.

Q: What would make it taxable?
A: If the reports drew on a common database and that information were substantially incorporated into reports furnished to other customers.

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 § 1105(c)(1) (tax on information services; exclusion for information personal or individual in nature)
TSB-A-10(20)S (information service includes compiling and organizing customer information)

Source

Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales-ao-2020.htm
Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a20-38s.pdf

Original ruling text

New York State Department of Taxation and Finance
Office of Counsel

TSB-A-20(38)S
Sales Tax
July 28, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
The Department of Taxation and Finance received a Petition for Advisory Opinion from
[ REDACTED ] (hereinafter “Petitioner”). Petitioner asks whether its service of allowing
customers to access its database and run reports of the customers’ data is subject to sales tax.
We conclude that Petitioner’s database service is an information service that is personal
and individual in nature and, therefore, is not subject to sales tax.
Facts
Petitioner enters into agreements with customers to maintain their fleets of vehicles.
Petitioner also maintains data on all maintenance performed for its customers, including the
vehicle involved, the date of maintenance, and the type of maintenance provided.
For a separate monthly charge per vehicle, Petitioner allows customers access to the data
it compiles. If a customer agrees to pay this fee, it can log onto a website to access the data and
run reports regarding the maintenance performed on its vehicles. For example, a customer can
run a report showing how many oil changes were performed in January or how many times a
specific vehicle was in for maintenance over a period of time. The customer can generate a
report only for its own vehicles. It cannot access other customers’ data. Petitioner also does not
sell its customers’ maintenance information to third parties.
Analysis
The Tax Law imposes sales tax on the receipts from every sale, except for resale, of the
service of furnishing information, including collecting, compiling or analyzing information and
furnishing reports thereof to other persons, except the furnishing of information “which is
personal or individual in nature and which is or may not be substantially incorporated into
reports furnished to other persons … . ” Tax Law § 1105(c)(1).
Petitioner’s database service is an information service because it includes compiling and
organizing customer information. See TSB-A-10(20)S. Petitioner allows customers to run reports
on the repair and maintenance history for a specific vehicle. However, because Petitioner
compiles and organizes information about a customer’s own vehicles and each customer’s

-2-

TSB-A-20(38)S
Sales Tax
July 28, 2020

information is provided only to that customer, Petitioner’s information service is personal or
individual in nature, and therefore, is not subject to tax. See Tax Law § 1105(c)(1).
DATED: July 28, 2020

/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.