Ezel / Tax Rulings / NY
NY TSB-A-24(1)I,(7)S Income Tax; Sales Tax 2024-07-16

Does a travel planner who organizes group trips for solo female travelers owe New York sales tax on her fee, and is the fee subject to personal income tax?

Short answer: No sales tax, but yes income tax. The Department concluded that a New York resident's fees for travel planning and concierge services (organizing group trips for solo female travelers) are not subject to sales tax, because Tax Law § 1105(c) does not list travel planning or concierge services among the taxable services. However, the receipts are gross income (compensation for services) and are included in her New York adjusted gross income, so they are subject to New York personal income tax under Tax Law § 612(a).
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 New York resident runs a business organizing group travel for solo female travelers — booking hotels, tours, activities, and meals, and acting as the group leader and concierge during each trip. She charges a non-refundable $350 fee for her services (any sales tax on the hotels, tours, and meals is charged separately by those vendors). She asked two questions: is her fee subject to sales tax, and is it subject to income tax? The Department's answers: no sales tax, but yes personal income tax.

On sales tax: New York taxes only the specific services listed in Tax Law § 1105(c). Travel planning and concierge services are not on that list, so her fee is not subject to sales tax.

On income tax: a New York resident's adjusted gross income starts from federal adjusted gross income (Tax Law § 612(a)). Federal gross income means "all income from whatever source derived," including compensation for services such as fees and commissions (Internal Revenue Code §§ 61(a), 62(a)). So her travel-agent fees are gross income, flow into her New York adjusted gross income, and are subject to New York personal income tax.

The takeaway: "not subject to sales tax" is not the same as "tax-free." A service can be entirely outside the sales-tax net and still be ordinary taxable income.

What this means for you

Travel agents, planners, and concierge businesses

Your service fees are generally not subject to New York sales tax, because travel planning and concierge services aren't among the enumerated taxable services in § 1105(c). But that says nothing about income tax — your fees are ordinary business income and are fully taxable on your New York return.

Service providers generally

Use this as a reminder that sales tax and income tax are separate questions. Many services escape sales tax simply because they aren't on the § 1105(c) list, yet every dollar you earn for those services is still income subject to income tax.

Accountants and tax professionals

Sales-tax taxability turns on whether the service is enumerated in § 1105(c); income taxability flows from IRC §§ 61(a)/62(a) into New York AGI via Tax Law § 612(a). Confirm separately-charged third-party costs (hotels, tours, meals) are handled by those vendors, and report the planner's fee as business income.

Common questions

Q: Do travel agents charge sales tax on their fees in New York?
A: In this opinion, no. Travel planning and concierge services are not among the services listed in Tax Law § 1105(c), so the planner's fee is not subject to sales tax.

Q: If there's no sales tax, is the income tax-free?
A: No. The fees are compensation for services and count as gross income, so they are included in New York adjusted gross income and subject to New York personal income tax.

Q: What about the sales tax on the hotels, tours, and meals?
A: Those are charged to each traveler by the hotels, tour companies, and restaurants if tax is owed — they are separate from the planner's own fee.

Q: Can I rely on this opinion?
A: Not as binding. A TSB-A advisory opinion binds the Department only as to the petitioner and the exact facts described. Use it to understand the reasoning, then check your own facts.

Citations and references

New York Tax Law:
- Tax Law § 1105(c) — enumerated services subject to sales tax (does not include travel planning or concierge services)
- Tax Law § 612(a) — New York adjusted gross income of a resident individual

Federal law:
- Internal Revenue Code § 61(a) — gross income includes compensation for services
- Internal Revenue Code § 62(a) — definition of adjusted gross income

Source

Original ruling text

Income Tax
Sales Tax
July 16, 2024
Office of Counsel

The Department of Taxation and Finance received a Petition for Advisory Opinion from [ redacted ] (Petitioner), a New York resident. Petitioner asks whether sales tax is imposed on her receipts from travel planning and concierge services, and if those receipts are subject to income tax. We conclude that sales tax is not imposed on those receipts. However, the receipts are included in Petitioner’s income and are subject to personal income tax.

Facts

Petitioner markets group travel packages to solo female travelers. Petitioner books hotel rooms, tours, activities and meals. During each trip, Petitioner serves as the group leader and concierge. Petitioner charges a non-refundable fee of $350 for her services. If owed, sales tax is charged to each traveler by the hotels, tour companies and restaurants.

Analysis

Tax Law § 1105(c) imposes sales tax on certain services, which do not include travel planning and concierge services. Accordingly, sales tax is not imposed on Petitioner’s receipts for those travel services.

Tax Law § 612(a) provides that the New York adjusted gross income of a resident individual is his or her federal adjusted gross income with any applicable modifications. Federal adjusted gross income is defined as gross income minus certain specific deductions. See Internal Revenue Code § 62(a). Internal Revenue Code § 61(a) provides that gross income means all income from whatever source derived, including (but not limited to): (1) compensation for services, including fees, commissions, fringe benefits, and similar items; and (2) gross income derived from business. Accordingly, Petitioner’s fees for her services as a travel agent are reportable as gross income for federal income tax purposes. Therefore, they are includable in New York adjusted gross income and subject to the New York personal income tax.

DATED: July 16, 2024

Mary Ellen Ladouceur
Principal Attorney

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.