New York Advisory Opinion TSB-A-96(12)S: Are receipts from massage services performed by a licensed massage therapist -- whether as a sole practitioner, employee, or officer/stockholder of a corporation -- subject to New York State or New York City sales tax?

Plain-English summary

Whitestone Services, Inc.'s client provides massage services and is licensed to practice massage by the State Education Department under Title VIII of the Education Law -- a graduate of the Swedish Institute's registered program -- but is not a licensed nurse, osteopath, physiotherapist, chiropractor, podiatrist, or other licensed medical professional. Petitioner asked whether receipts from these massage services are subject to sales tax, whether the practitioner works as a sole practitioner, as a corporation's employee, or as a corporation's employee/stockholder/officer.

The Department ruled the receipts are not subject to New York State sales tax, or to local sales taxes imposed by localities outside New York City, because Tax Law § 1105(c)'s list of enumerated taxable services doesn't include massage services (citing the Department's own prior Carapan, Inc. and Walter R. Zernis opinions). New York City, though, taxes massage services under its own separate authority: Tax Law § 1212-A(a)(2) authorizes, and NYC Administrative Code § 11-2002(h) imposes, a local tax on massage services -- but both provisions exclude services rendered by a physician, osteopath, nurse, physiotherapist, chiropractor, podiatrist, optometrist, ophthalmic dispenser, or "a person performing similar services" licensed under Title VIII. The Department reasoned that even though the client is licensed under Title VIII, massage therapy isn't medical in nature the way the services of those listed professionals are, so the client isn't providing "similar services" within the meaning of the exclusion. Accordingly, the massage receipts ARE subject to New York City's local sales tax -- and this holds true whether the client operates as a sole practitioner or as an employee, stockholder, or officer of a corporation.

What this means for you

Licensed massage therapists practicing in New York City

Expect your massage-service receipts to be subject to NYC's local sales tax, even though you're a licensed professional under Title VIII of the Education Law -- massage therapy doesn't fall within the medical-services exclusion that protects doctors, nurses, chiropractors, and similar licensed medical professionals from that tax.

Massage therapists practicing outside New York City

Your receipts aren't subject to New York State sales tax, and (per this ruling's reasoning) shouldn't be subject to other localities' sales tax either, since massage services aren't among the state's enumerated taxable services -- NYC's local massage tax is a distinct, city-specific tax that doesn't apply elsewhere in the state.

Businesses employing massage therapists

Your business form -- sole proprietorship versus operating through a corporation, and whether the therapist is an employee, stockholder, or officer -- doesn't change whether NYC's local massage tax applies; the ruling explicitly states the tax attaches "whether the client is a sole practitioner, or an employee, stockholder or officer of a corporation."

Common questions

Q: Why are massage services taxed in NYC but not statewide?
A: Because NYC has its own separate local taxing authority under Tax Law § 1212-A that reaches certain services (including massage) the State itself doesn't tax under § 1105(c) -- this is a city-specific add-on tax, not a state tax collected only within city limits.

Q: Would the answer change if the massage therapist also held one of the excluded medical licenses (e.g., as a licensed physiotherapist)?
A: Yes, based on the statute's plain text -- services rendered by a physician, osteopath, nurse, physiotherapist, chiropractor, podiatrist, optometrist, or ophthalmic dispenser are expressly excluded from the NYC massage tax, so a practitioner who also holds one of those licenses and is providing services within that scope would likely fall outside the tax.

Q: Does licensure under Title VIII of the Education Law automatically exempt a service from the NYC tax?
A: No -- the ruling makes clear that Title VIII licensure alone isn't enough; the exclusion requires providing services that are genuinely medical in nature, similar to the specifically listed professions, not merely holding a Title VIII license in some other regulated field like massage.

Citations and references

Statutes and regulations:

• Tax Law § 1212-A(a)(2) (NYC local tax on massage/other enumerated services)
• Tax Law § 1105(c) (state enumerated services tax)
• New York City Administrative Code § 11-2002(h) (NYC massage services tax)

Prior rulings and cases referenced:

• Carapan, Inc., Advisory Opinion, Commissioner of Taxation and Finance, June 21, 1993, TSB-A-93(40)S
• Walter R. Zernis, L.M.T., DBA Bodycare, Advisory Opinion, Commissioner of Taxation and Finance, September 19, 1994, TSB-A-94(44)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1996.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a96_12s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-96 (12)S
Sales Tax
February 28, 1996

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S950928A

On September 28, 1995, a Petition for Advisory opinion was received from Whitestone
Services, Inc., 20-13 149 Street, Whitestone, New York 11357.
The issue raised by Petitioner is whether receipts from massage services performed by an
individual, either as a sole practitioner, as an employee of a corporation or employee/ stockholder/
officer of a corporation, are subject to the New York City or New York State sales tax.
Petitioner makes the following submission of facts. Petitioner's client provides massage
services and is licensed to practice massage by the State Education Department under Title VIII of
the Education Law. This individual is a graduate of a school of massage (the Swedish Institute), with
a program registered with the New York State Education Department. The individual is not a
licensed nurse, osteopath, physiotherapist, chiropractor, podiatrist, or other licensed medical
professional.
Section 1212-A(a)(2) of the Tax Law authorizes, and Section 11-2002(h) of the New York
City Administrative Code imposes, a tax on the receipts from every sale of “... massage services ...
; but excluding services rendered by a physician, osteopath, ... nurse, physiotherapist, chiropractor,
podiatrist, optometrist, ophthalmic dispenser or a person performing similar services licensed under
title VIII of the education law . . . ." (Emphasis added)
Section 1105(c) of the Tax Law imposes New York State sales tax on the receipts from the
sale of certain enumerated services. Massage services are not included within the services
enumerated under Section 1105(c) of the Tax Law. Receipts from the sale of massage services,
therefore, are not subject to the New York State sales tax, or to local sales taxes imposed by
localities outside New York City. Carapan, Inc., Adv Op comm T&F, June 21, 1993, TSB-A­
93(40)S; Walter R. Zernis, L.M.T.,DBA Bodvcare, Adv Op Comm T&F, September 19, 1994, TSBA-94(44)(S).
The massage services provided by Petitioner's client are, however, subject to the tax imposed
by New York City pursuant to the authority of Section 1212-A(a)(2) of the Tax Law. Even though
Petitioner's client is engaged in the profession of massage and is licensed under Title VIII of the
Education Law, the services that he or she provides are not medical in nature as are the services
provided by the categories of professionals listed in Section 1212-A of the Tax Law and Section

-2­
TSB-A-96 (12)S
Sales Tax
February 28, 1996

11-2002(h) of the New York City Administrative Code. Therefore, Petitioner's client is not providing
"similar services" as intended by these sections. Accordingly, receipts from sales of the client's
services are subject to the New York City sales tax. Carapan. Inc., Walter R. Zernis, supra. This is
true whether the client is a sole practitioner, or an employee, stockholder or officer of a corporation.

Dated: February 28, 1996

/s/
DORIS S. BAUMAN
Director
Technical Services Bureau

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