Is a service that automatically pulls, compiles, and reports a client's own internet-advertising performance data subject to New York sales tax?

Plain-English summary

The petitioner runs a service for businesses that advertise online. Normally an advertiser has to log into each ad platform separately and pull its own performance reports. The petitioner automates that: with the client's login credentials, it downloads the client's data from each platform, assembles and analyzes it, and delivers it back to that client in a single consolidated database the client queries through a dashboard for a monthly fee.

New York taxes "information services" — collecting, compiling, or analyzing information and furnishing reports. But there's an important carve-out: information that is "personal or individual in nature" and not substantially incorporated into reports furnished to other people is not taxable. The Office of Counsel held this service fits the exclusion. Each client's reports are built solely from that client's own advertising data; they aren't shared with other clients, aren't combined with other clients' data, and aren't drawn from a common public source. So even though it's an information service in form, it's a personal/individual one and not taxable.

The opinion also rejected treating the service as taxable prewritten software: its primary function is compiling the client's ad metrics, and giving the client a dashboard to view and format its own reports doesn't convert it into a software sale.

What this means for you

Analytics, reporting, and dashboard businesses

If you process only the customer's own data and deliver results back to that same customer — without pooling it with other customers' data or pulling from a shared/public repository — your service likely qualifies as a nontaxable personal or individual information service. The dividing line is whether the same information feeds reports for others.

Watch the trap on the other side

The moment you reuse customer data to build benchmarks, industry comparisons, or reports furnished to others (even anonymized or aggregated), you can lose the exclusion and become taxable. Compare the taxable-benchmarking outcome in TSB-A-24(6)S. A dashboard alone doesn't make you taxable software, but a shared data source can make you a taxable information service.

Accountants and tax professionals

Anchor on the "common source / data repository" test from ADP Automotive and Allstate: information drawn from a common, non-confidential source isn't "personal or individual." Here all data is client-specific, so the § 1105(c)(1) exclusion applies, and the primary-function test keeps it out of § 1101(b)(6) prewritten software.

Common questions

Q: Is an advertising-analytics subscription taxable in New York?
A: Not if it compiles only each client's own data and doesn't share or pool it with others. That's a nontaxable personal/individual information service.

Q: Does giving customers a dashboard make it taxable software?
A: No. The primary function is the information service; a dashboard for viewing and formatting the client's own reports doesn't turn it into a sale of prewritten software.

Q: What would make a service like this taxable?
A: Reusing customer data to produce benchmark or comparative reports furnished to other customers — even aggregated or anonymized — generally defeats the personal/individual exclusion.

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 data flows.

Citations and references

Statutes and regulations:
- Tax Law § 1105(c)(1) (information services; personal/individual exclusion)
- Tax Law § 1105(c)(9); § 1105(a); § 1101(b)(6) (prewritten software)

Decisions and guidance cited:
- Matter of ADP Automotive Claims Service Inc. v. Tax Appeals Tribunal, 188 AD2d 245 (1993)
- Allstate Insurance Company v. State Tax Commission, 115 AD2d 831 (3d Dept. 1985), aff'd 67 NY2d 999 (1986)
- TSB-A-16(22)S

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/a20-3s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Counsel

TSB-A-20(3)S
Sales Tax
April 28, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
The Department of Taxation and Finance (“the Department”) received a Petition for Advisory
Opinion from [ REDACTED ] (“Petitioner”). Petitioner asks whether the service it provides to its
customers are subject to sales tax.
We conclude that Petitioner’s service is an information service that is personal or individual in
nature and, therefore, not subject to sales tax.
Facts
Petitioner’s customers are businesses that advertise on the internet. Typically, a business that
advertises on the internet must monitor the effectiveness and performance of its advertising campaigns by
logging in separately to each advertising platform and downloading reports from each platform. Petitioner
automates that process for its customers. Customers provide their login credentials to Petitioner for the
advertising platforms they use. Petitioner downloads the customer’s relevant data, assembles it, analyzes
it and reports it to the client daily in a single consolidated database. The customer pays a monthly
subscription fee to run ad hoc or scheduled reports from the database. Customers use an online dashboard
to select from a menu of services provided by Petitioner and to specify the format of deliverable reports.
The reports provided to each customer are specific to that customer and relate to that customer’s own
advertising campaigns. The reports are not shared with any other customers and do not include
information compiled by Petitioner from other customers or from public sources.
Analysis
The Tax Law imposes sales and use tax on retail sales of tangible personal property, including
prewritten software, and the sale, except for resale, of certain services. See Tax Law §§ 1101(b)(6);
1105(a), (c). Among the services subject to tax is the furnishing of information by printed, mimeographed
or multigraphed matter or by duplicating written or printed matter in any other manner, including the
services of collecting, compiling or analyzing information of any kind or nature and furnishing reports
thereof to other persons. Excluded from the tax on information services are advertising services and the
furnishing of information that is “personal or individual in nature and which is not or may not be
substantially incorporated in reports furnished to other persons.” Tax Law § 1105(c)(1); see also Tax Law
§ 1105(c)(9). Information is not “personal or individual in nature” for purposes of this exclusion if it
comes from a common source or a data repository that itself is not confidential. See Matter of ADP
Automotive Claims Service Inc. v Tax Appeals Tribunal, 188 AD2d 245 (1993), lv. denied, 82 NY2d 655

-2-

TSB-A-20(3)S
Sales Tax
April 28, 2020

(1993); Allstate Insurance Company v. State Tax Commission, 115 AD2d 831 (3d Dept. 1985), affd. 67
N.Y.2d 999 (1986).
Here, Petitioner is providing an information service because it obtains its customer data from
various advertising platforms, compiles and analyzes that data, and presents that data to the customer in a
consolidated database. However, the services provided to each customer are excluded from tax because
the information is personal and individual to each customer and is not incorporated into reports furnished
to other customers. The information obtained by Petitioner from the various advertising platforms is
specific to the individual customer. Moreover, a customer can access only the information specific to its
own advertising campaigns. Reports provided to a customer are specific to that customer’s campaigns
and are not shared with other customers, either directly or in anonymized form. Accordingly, we
conclude that Petitioner’s information service is personal or individual in nature and, thus, not subject to
sales tax. See e.g., TSB-A-16(22)S.
Finally, we conclude Petitioner’s service does not constitute the sale of prewritten computer
software. The primary function of Petitioner’ service is to compile the performance metrics of its
customers’ advertising campaigns from multiple advertising platforms. The provision of access to a
“dashboard” by which a customer can access its information and select the formatting of reports does not
change the nature of the service.
DATED: April 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.