Is a matchmaking/dating service, where a customer pays for an interview and is then mailed a match's name and phone number based on comparison with other interviewees' records, subject to New York sales tax?

Subject

Is whether his client's dating service will be subject to sales tax.

What this means for you

An accountant asked on behalf of a client planning a dating service business: a prospective customer comes in for a person-to-person interview and pays the fee at that time; the interviewer/consultant then compares the customer's information against other interviewees' records and mails the customer just a name and phone number of a potential match -- nothing else is provided.

New York taxes "information services" -- collecting, compiling, or analyzing information of any kind and furnishing reports of it to other people -- though it excludes information that's purely personal/individual and not shared across customers. Here, the business is actively COMPARING one customer's information against a pool of OTHER interviewees' records to generate the match, and then furnishing that comparison's result (a name and phone number) back to the customer. Because the service inherently involves cross-referencing multiple people's collected information (not just returning something purely personal to one person, with no data from others involved), the Department treats this as a taxable information service, following an identical 1991 precedent on a similar matching business, rather than treating it as excluded personal information.

Q&A

Q: We run a matchmaking/dating service where we interview clients, compare their info against other members' profiles, and send back a match's contact details -- is our fee taxable?
A: Yes, per this opinion -- because the service collects, compares, and analyzes multiple interviewees' information to generate the match, it's a taxable information service under Tax Law § 1105(c)(1), not an exempt purely-personal-information service.

Q: Would it matter if we only interviewed the customer and gave back a report based solely on their own information, without comparing it to anyone else's?
A: This opinion doesn't address that scenario directly, but the information-services tax's own personal-information exclusion (for data that isn't shared or compared with other customers' records) suggests a service that never cross-references other people's information could be analyzed differently -- though that's not what's described in this fact pattern.

Q: Does it matter that the customer only receives a bare name and phone number, not a full detailed profile or report?
A: No, per this opinion -- even a minimal deliverable (a name and phone number) still counts as "furnishing" the result of a collect/compile/analyze process to the customer, which is enough to be a taxable information service.

Citations

• Tax Law § 1105(c)(1) -- imposes tax on information services (collecting, compiling, or analyzing information and furnishing reports), excluding purely personal/individual information not substantially incorporated into reports furnished to others.
• 20 NYCRR § 527.3(a) -- defines information services as the collection, compiling, or analyzing of information and furnishing of reports to other persons.
• People Resources, Adv. Op. Comm. T&F, March 18, 1991, TSB-A-91(28)S -- prior opinion holding a similar matching/referral service taxable as an information service; followed here.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1994.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a94_7s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-94 (7)S
Sales Tax
February 8, 1994

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S931007A

On October 7, 1993 a Petition for Advisory Opinion was received from Thomas M. Schmitz
C.P.A., 740 Union Street, Schenectady, New York 12305.
The issue raised by Petitioner, Thomas M. Schmitz C.P.A., is whether his client's dating
service will be subject to sales tax.
Petitioner's client's anticipated service is as follows:
1.)

The potential customer will come in for a person to person interview.

2.)

The customer will pay the fee at the time of the interview.

3.)

The interviewer/consultant will perform matches with the records of other
interviewees and will mail the customer a name and telephone number of a
potential date. The customer will receive nothing else.

Section 1105(c)(1) of the Tax Law imposes a sales tax upon the receipts from every sale,
except for resale of the following:
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, but excluding the furnishing of
information which is personal or individual in nature and which is not or may not be
substantially incorporated in reports furnished to other persons. (Emphasis supplied)
Section 527.3 of the Sales and Use Tax Regulations provides, in part, as follows:
(a)

Imposition

(1)
Section 1105(c)(1) of the Tax Law imposes a tax on the receipts from the
service of furnishing information by printed, mimeographed or multigraphed matter
or by duplicating written or printed matter in any manner such as by tapes, discs,
electronic readouts or displays.
(2)
The collection, compiling or analyzing information of any kind or nature and
the furnishing reports thereof to other persons is an information service. (Emphasis
supplied)

-2­
TSB-A-94 (7)S
Sales Tax
February 8, 1994
Petitioner's client collects and compiles information, analyzes such matter, and furnishes
names and telephone numbers of potential dates to its customers. Accordingly, Petitioner's client is
providing an information service subject to sales tax pursuant to Section 1105(c)(1) of the Tax Law
and Section 527.3(a) of the Sales and Use Tax Regulations. Therefore, receipts paid to Petitioner's
client for the services it performs are subject to sales tax. People Resources, Adv Op Comm T&F,
March 18, 1991, TSB-A-91(28)S.

DATED: February 8, 1994

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.