New York Advisory Opinion TSB-A-96(13)S: Is a licensed process server's income from serving legal papers, filing court documents, and locating defendants through public records subject to New York's sales tax on detective services?

Plain-English summary

Thomas J. Brennan is licensed by the New York City Department of Consumer Affairs as a process server -- not as a private investigator. His work involves receiving a summons in a court action (such as a marital dispute, eviction, or accident case) and going to the address listed to serve it. If the defendant is no longer there, Brennan talks to neighbors, checks with the post office, consults telephone directories, obtains Department of Motor Vehicles records, and searches internet record databases to find a current address, then attempts service again at any new address found. Once service is complete, Brennan files an "affidavit of service" with the court.

The Department ruled Brennan's receipts are not subject to sales tax. Tax Law § 1105(c)(8) taxes receipts from "protective and detective services," a category that includes alarm/protective systems, detective agencies, armored car services, and guard/patrol/watchman services -- but process serving, going to court to retrieve or file papers, and locating a defendant using telephone-book or public-record information aren't among the services that provision specifically enumerates. The Department reasoned that although Brennan's location activities (talking to neighbors, checking records) resemble the kind of work a detective agency performs, they're steps required to accomplish his actual, non-taxable service -- process serving -- and don't transform the overall service into a taxable detective service. The ruling draws one clear line, though: if Brennan instead hires someone else to search for a defendant on his behalf, that subcontracted search charge TO Brennan would be taxable as a detective service under § 1105(c)(8) -- even while Brennan's own charge to his own client for the process-serving job stays untaxed.

What this means for you

Process servers

Your core fee for serving papers, filing court documents, and locating defendants yourself using public records, directories, or similar tools is not subject to New York sales tax, even if some of that legwork resembles investigative work -- as long as process serving remains the actual service you're providing and billing for.

Process servers who subcontract defendant location work

If you pay a third party (like a licensed investigator) to search for a hard-to-find defendant, that subcontractor's charge to YOU is taxable as a detective service. Your own downstream charge to your client for the overall process-serving job can still be untaxed, but be aware you're paying tax on that specific subcontracted input.

Common questions

Q: Does having a process-serving license (rather than a private investigator's license) matter to the outcome?
A: The ruling notes Brennan's licensing status as background, but the actual legal test turns on what services are specifically enumerated under § 1105(c)(8) -- process serving itself simply isn't on that list, regardless of what license the person doing it holds.

Q: Why does hiring a third-party searcher create tax exposure when doing the search yourself doesn't?
A: Because the third party would be selling Brennan a genuine detective/investigative service (locating a person) as its own distinct taxable transaction under § 1105(c)(8), separate from Brennan's own non-taxable process-serving service to his client -- the tax attaches to that specific enumerated service being purchased, not to Brennan's overall job.

Q: Would extensive skip-tracing or investigative work beyond basic record checks change the analysis?
A: The ruling doesn't address a scenario where location work becomes so extensive it dominates the engagement -- it's limited to Brennan's specific facts, where locating defendants was incidental to delivering process-serving services.

Citations and references

Statutes and regulations:

• Tax Law § 1105(c)(8) (protective and detective services tax)

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_13s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-96 (13)S
Sales Tax
February 28, 1996

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO.S950615A

June 15, 1995, a petition for Advisory Opinion was received from Thomas J. Brennan, P. O.
Box 1147, Seldon, New York 11784.
The issues raised by Petitioner, Thomas J. Brennan, are whether the receipts from process
serving, going to court to retrieve or file papers, and locating a defendant for service using
information contained in a telephone book or public record, are subject to the tax imposed under
section 1105(c)(8) of the Tax Law.
Petitioner presents the following facts.
Petitioner is not a licensed private investigator. Petitioner is licensed by the New York City
Department of Consumer Affairs as a process server. Petitioner may receive a summons to be served
on a defendant in a court action such as a marital dispute, eviction proceeding or an accident.
Petitioner will then go to the address shown on the summons to serve the summons. If the defendant
is no longer there, Petitioner will talk to neighbors or go to the post office to determine if the
defendant moved. Petitioner will also use telephone directories, obtain records from the Department
of Motor Vehicles, and access record databases on the Internet to locate defendants. If there is a new
address on file, Petitioner will go to that address and attempt to serve the summons. If the summons
is served, Petitioner is 'required to file an "affidavit of service" with the proper court.
Section 1105(c) of the Tax Law imposes a tax upon "The receipts from every sale, except
for resale, of the following services:
*

*

*

(8) Protective and detective services, including, but not limited to, all services
provided by or through alarm or protective systems of every nature, including, but not
limited to, protection against burglary, theft, fire, water damage or any malfunction
of industrial processes or any other malfunction of or damage to property or injury
to persons, detective agencies, armored car services and guard, patrol and watchman
services of every nature other than the performance of such services provided by a
port watchman licensed by the waterfront commission of New York harbor, whether
or not tangible personal property is transferred therewith.
While the Tax Law imposes a sales tax upon the receipts from the sale of all tangible
personal property with certain exceptions, only specified services are subject to sales tax. Process
serving, going to court to retrieve or file papers, and locating defendants using information contained
in a telephone book or public record are not among the specified services. Therefore, the services
described by Petitioner are not subject to sales tax. The fact that Petitioner's service may

-2­
TSB-A-96 (13)S
Sales Tax
February 28, 1996

require Petitioner to perform certain activities that are in the nature of detective services will not
change the nature of Petitioner's service which is process serving. Nor will such activities, when
required to deliver process, convert Petitioner's service to one subject to tax. It should be noted,
however, that if Petitioner hires someone to search for a defendant, that charge to Petitioner would
be subject to the tax imposed under section 1105(c)(8) of the Tax Law.

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.