Is a personalized one-on-one astrological birth chart reading delivered online a taxable information service in New York?

Plain-English summary

A company offers a free astrology app/website (horoscopes, a compatibility calculator, a content library) and sells premium customers live, one-on-one astrological birth chart readings online. An astrologer interprets the positions of the planets at the customer's exact birth moment and answers the customer's questions about career, love, family, and life. It asked whether those paid readings are subject to New York sales tax. The Department said no.

New York taxes information services — "collecting, compiling or analyzing information of any kind … and furnishing reports thereof to other persons" (Tax Law § 1105(c)(1)). Whether something is a taxable information service depends on its primary function — what the customer is really paying for. Here, even though the astrologer conveys information, the customer is paying for guidance, advice, and predictions drawn from the astrologer's expertise in reading the chart — not for the retrieval, compilation, and furnishing of data. The Department found that personalized astrological readings are distinguishable from a taxable information service, so they're not taxable under § 1105(c)(1).

The Department also addressed the telephony information/entertainment tax (Tax Law § 1105(c)(9)). That tax only reaches an information service if it would be taxable under § 1105(c)(1) when delivered in writing — and these readings aren't. Besides, they're delivered over the internet (the company's own website/app), not by telephony, so § 1105(c)(9)(i)–(ii) doesn't apply (Tax Law § 179).

What this means for you

Astrologers, coaches, advisors, and "reading" services

Selling a service where the customer pays for your judgment, advice, predictions, or expertise — even though you communicate information — is generally not a taxable information service in New York. The line is primary function: advice/guidance is different from retrieving and reporting data.

Where it could tip toward taxable

If the offering shifts to compiling and furnishing data/reports (especially standardized output reused for many customers), it can look like a taxable information service under § 1105(c)(1). Highly personalized, expertise-driven delivery is what kept this nontaxable.

Delivery channel matters for the telephony tax

The extra information/entertainment tax under § 1105(c)(9) targets telephony/telegraphy delivery. Internet-delivered services aren't taxed under that provision (Tax Law § 179) — and in any event it only applies if the service would be a taxable § 1105(c)(1) information service in written form.

Common questions

Q: Are astrology readings taxable in New York?
A: In this opinion, no. Personalized one-on-one birth chart readings are not a taxable information service, because the customer is paying for guidance, advice, and predictions based on the astrologer's expertise.

Q: The astrologer gives the customer information — why isn't that an information service?
A: Taxability turns on primary function. Conveying some information isn't enough; the service principally provides expert guidance and predictions, which is distinct from collecting, compiling, and furnishing data reports.

Q: Does it matter that it's delivered online?
A: Yes for the telephony information/entertainment tax. Internet-delivered services aren't taxed under Tax Law § 1105(c)(9) (see Tax Law § 179), and that tax only applies to services taxable as written information services anyway.

Q: Can my business 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)(1) — sales tax on information services (collecting/compiling/analyzing data and furnishing reports)
- Tax Law § 1105(c)(9)(i) — information/entertainment services delivered via telephony/telegraphy
- Tax Law § 1105(c)(9)(ii) — additional 5% tax on aurally received telephony information/entertainment services
- Tax Law § 179 — internet-delivered services are not taxed as telephony

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao.htm
• Opinion: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales/24-23s.htm
• Printer-friendly PDF: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a24-23s.pdf

Original ruling text

Sales Tax
August 2, 2024
Office of Counsel

The Department of Taxation and Finance received a Petition for Advisory Opinion from [ redacted ] (“Petitioner”). Petitioner asks whether its personalized astrological birth chart reading services are subject to New York State sales tax.

We conclude that Petitioner’s sales of its personalized astrological birth chart reading services are not subject to New York State and local sales and use taxes.

Facts

Petitioner provides a free website and application that includes daily and monthly horoscopes, a love and compatibility calculator and a content library.1 The web application also includes daily and monthly horoscopes. Petitioner also provides its “premium” (paying) customers live one-on-one astrological birth chart readings online via its application and website.2 A birth chart contains information about all areas of a customer’s life, including career, love, family and home life. Premium customers receive readings about the planets’ positions at the exact moment of the customer’s birth. Petitioner’s astrologers examine the planets’ positions and interactions with one another to see how the planet alignments shape the customer’s personality, motivations and desires. Premium customers may receive an individual session with an astrologer and may ask specific questions related to their reading. Petitioner states that no two astrological readings are the same and a premium customer pays Petitioner for the astrologer’s time and expertise.

Analysis

Sales tax is imposed on the service of “furnishing . . . 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 . . . .” Receipts from the sale of information services that are personal or individual in nature, and that are not or may not be substantially included in reports given to other persons are exempt from sales tax. See Tax Law § 1105(c)(1). Whether a service qualifies as an information service depends on its primary function, as determined by the nature of the service being sold and on what is being paid for by the purchaser.

Here, Petitioner’s paid services involve providing personalized astrological readings to its customers. Providing astrological readings is clearly distinguishable from a taxable information service of simply retrieving, collecting, compiling and furnishing information. While the astrologers provide information to the premium customers, this service principally involves the giving of guidance, advice, and predictions based upon the astrologer’s expertise in reading a customer’s planetary birth chart. Accordingly, Petitioner’s services do not constitute an information service under Tax Law § 1105(c)(1).

Sales tax is also imposed upon information and entertainment services delivered via telephony and telegraphy or telephone and telegraph service. See Tax Law § 1105(c)(9)(i). Information services delivered via telephony and telegraphy are not subject to tax unless the information service would be subject to the tax imposed by Tax Law § 1105(c)(1) if the information was delivered in written or printed format. Tax Law § 1105(c)(9)(ii) also imposes an additional 5% tax on the receipts from the sale of information and entertainment services delivered via telephony and telegraphy and telephone and telegraph service when the services are received by the customer in an exclusively aural manner. Since Petitioner’s services are not taxable as an information service under Tax Law § 1105(c)(1), such services are also not taxable under Tax Law § 1105(c)(9). In addition, because Petitioner’s services are provided via the internet through its website and mobile application rather than telephony, these services are also not taxable as an information or entertainment service for purposes of Tax Law § 1105(c)(9)(i) and (ii). See Tax Law § 179.

DATED: August 2, 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.

1 Petitioner did not request, and we do not provide, an opinion about whether the free application is subject to sales tax.

2 When Petitioner first submitted its Advisory Opinion request, it stated that its services were provided via a 3rd party vendor application. However, Petitioner has since notified the Department of Taxation and Finance that it no longer uses the 3rd party vendor application to provide its services and, instead, Petitioner provides its services through its own website and a free application.