Are a consulting firm's visual-impact studies and reports for environmental-review (NYSEQRA) applications subject to New York sales tax?

Plain-English summary

An accountant petitioned on behalf of a consulting firm ("Company A") that helps developers and cellular communications companies satisfy the visual-impact requirements of New York's State Environmental Quality Review Act (NYSEQRA) and similar out-of-state laws. Company A's process is elaborate: it researches the site, flies helium balloons at the height of a proposed tower, photographs the balloons from dozens of vantage points within a multi-mile radius, and then uses computer modeling and photo-editing software to produce photo-realistic renderings showing exactly how the finished structure would look from each vantage point. It delivers these renderings, plus a written report, to the client for use in presentations to the environmental review agency, and Company A's staff attend those meetings to present the findings and answer questions. Company A asked whether its fees are taxable, in all four combinations of the project site and report-delivery location being inside or outside New York.

The Department found that Company A's core service -- researching, photographing, modeling, and reporting on a project's visual impact, plus presenting the findings at the review agency -- isn't a service specifically listed as taxable under New York's sales tax, regardless of where the site sits or where the finished report is delivered; New York's sales tax only reaches services the statute specifically enumerates, and nothing in Company A's core work fits any of those categories. This tracked an earlier ruling involving aerial photogrammetry, which similarly held that surveying/engineering-style analysis and reporting escapes tax even though the same business might also sell tangible items like photographs or maps. That's the one place tax can apply here: if Company A ever sells photographs or maps on their own -- not bundled into a full report and NYSEQRA presentation, such as a client's separate order for extra copies -- that's an ordinary sale of tangible personal property, taxable if delivered to the customer in New York (following the destination-tax rule), regardless of where the underlying site is.

What this means for you

Environmental consultants, visual-impact analysts, and similar site-study firms

A comprehensive analysis-and-report service (even one involving photography, computer modeling, and rendered visuals) generally escapes sales tax as an unenumerated service, as long as what you're delivering is genuinely a report and findings, not a standalone sale of photographs or maps.

Firms occasionally selling standalone photographs, maps, or renderings

If a client orders extra copies of your photographs or maps separately from your report and analysis service, that specific transaction is a taxable sale of tangible personal property -- tax applies based on where that item is delivered, not where the underlying project site is located.

Accountants and tax professionals

This ruling extends the aerial-photogrammetry precedent (TSB-A-87(26.1)S) to a newer visual-impact-study business model built around helium balloons and digital photo compositing -- useful for any environmental, engineering, or land-use consulting client whose deliverables mix a nontaxable analytical service with occasional taxable sales of tangible outputs.

Common questions

Q: Does the location of the project site or where reports are delivered affect whether a visual-impact study is taxed?
A: No -- Company A's core report-and-presentation service isn't taxable in any of the four site/delivery-location combinations, since it isn't a specifically enumerated taxable service at all.

Q: Is selling extra copies of photographs or maps ever taxable, even for a nontaxable consulting service?
A: Yes -- a standalone sale of photographs or maps (not bundled with the full report and presentation) is a taxable sale of tangible personal property if delivered to the customer in New York.

Q: Does it matter that the firm's principals aren't licensed engineers or land surveyors?
A: Not for this ruling's outcome -- the analysis turned on the service not being a specifically enumerated taxable service at all, regardless of licensing status.

Q: Does this ruling apply to my consulting firm's site-study or reporting services?
A: Not automatically. An Advisory Opinion binds the Department only for the taxpayer and facts it was issued to, and it can't be relied on by anyone else. Your own services and deliverables would need their own analysis.

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1997.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a97_60s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-97(60)S
Sales Tax

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE

ADVISORY OPINION

PETITION NO.S970425A

On April 25, 1997, the Department of Taxation and Finance received a
Petition for Advisory Opinion from Morton L. Coren, P.C., 638 Meadow Court,
Westbury, NY 11590-5925.
The issue raised by Petitioner, Morton L. Coren, P.C., is whether the
services provided by its client in meeting the visual impact requirements of the
New York State Environmental Quality Review Act (hereinafter "NYSEQRA") are
subject to State and local sales and use taxes where:
1.

Sites are located in New York State and reports are delivered
within New York State.

2.

Sites are located in New York State and reports are delivered
outside of New York State.

3.

Sites are located outside of New York State and reports are
delivered within New York State.

4.

Sites are located outside of New York State and reports are
delivered outside of New York State.

Petitioner submits the following facts as the basis for this Advisory
Opinion.
Petitioner's client (hereinafter "Company A") assists planning board
applicants in meeting the visual impact requirements of NYSEQRA and similar laws
in other states. Specifically, NYSEQRA requires that the lead environmental
review agency determine the "impairment" of any proposed project upon the area's
"aesthetic resources." New York State has developed criteria for the initial
environmental review, requiring an applicant to supply information as to the
project's visibility during various seasons from a wide variety of viewing
points, such as State and Federal parks, designated open areas, public roads, and
so forth.
Company A's principals have developed the expertise needed to meet the
NYSEQRA visual impact requirements. One principal is an attorney who has been
admitted to practice law in New York State, and has undergone NYSEQRA review for
his own subdivision project. The other principal has been constructing homes and
roads (including NYSEQRA review), and has been working with computers for more
than 10 years. Both principals have engineering experience developed in the
field on their own projects and in consulting on other projects, but are not
licensed land surveyors or engineers under the Education Law.

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Company A's clients have been primarily, but not exclusively, cellular
communications companies.
They will usually contact Company A after the
particulars of a site have been determined (i.e., feasibility for intended use;
feasibility of other sites; contingent lease for the site, etc.). Company A is
provided with engineering drawings of the structure and a locator map.
Prior to the commencement of field work, Company A obtains road and
topographical maps of the site and surrounding area that are prepared by the
U. S. Geological Survey, for a radius of 3 miles. All obvious NYSEQRA points are
noted. A pre-fieldwork site visit is made to gain familiarity with the area.
Company A's client, its attorneys and engineers, are also consulted for
information concerning possible points of visual interest.
Company A arrives at the site and deploys three 3-foot diameter helium
weather balloons at a height generally 20% higher than the proposed tower, or
structure. One person remains on-site and uses surveying instruments to measure
any shift in height and position of the balloons.
The field work consists of traveling down every public road within a 2 ½
(and sometimes as much as 5) mile radius of the site, stopping to photograph the
site from a number of predetermined points of potential visual impact.
Additional points are added in the field, as the suspended helium balloons are
viewed from various locations. Vegetation, site, and map irregularities are
considered. Print and slide photographs are taken. The balloons' position is
confirmed using radio phones to contact the individual located at the proposed
site of the structure.
The film is developed and scanned into a computer. The site and each point
is located on a contour map, using position information provided by the
consulting engineer.
Engineering software is used to create a model of the
actual proposed structure, using the dimensions and drawings furnished by the
construction engineer.
A computer program is used to photo-realistically render the tower as seen
from each of the selected points, maintaining the perspective, the points and the
structure as a computer file.
The software utilizes this information to
reference the tower and point locations, thus maintaining their relative
position. Each point, including the structure site, is adjusted for its correct
elevation. The software is set at each point's coordinates and photographs of
the model tower are prepared on the computer. The coordinates allow the computer
to prepare renderings of the tower to its correct scale, and which show its
position for each point.
The computer renderings are made to exactly reproduce the appearance of the
tower as it will appear. Finally, the photo-realistically rendered tower is
inserted into the digitized site photos Company A has taken and converted into
digitized photographs.

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The output, generally 8"x 10" digitized photos, are then delivered to
Company A's client, either mounted on foam board or in dossier format, as a
visual aid presentation to the NYSEQRA review agency, along with their report of
methodology. Company A's services include attendance at a meeting before the
review agency, to make the presentation and answer questions from the agency and
the public.
Company A offers a second service that is based, in part, upon the services
previously described. It will review topographical and aerial photography maps
to note those areas whose views of the balloons may be blocked by either
vegetation or by topography, for a 2 ½ mile radius from the site.
This
information is confirmed in the field by viewing the suspended balloons from all
public roads, and wherever other access can be obtained.
This information is then evaluated by the computer. An imaginary line is
drawn from the site to a designated point. That line will show any intervening
topography.
Field notes, used in conjunction with the aerial photos, will
indicate whether this line-of-sight is blocked by any intervening trees or
similar vegetation. This data is then transposed upon a road map with the site
at dead center, and concentric circles radiating from the site indicating 1 mile,
2 mile and 2 ½ mile distances. Contrasting colors are then assigned to indicate
those areas on the map whose view of the completed construction would be blocked
by vegetation and/or topography.
Company A's client is presented with a poster-sized mounted road map and
a more detailed report. Company A's services include attendance at a meeting
before the NYSEQRA review agency, to make the presentation and answer questions
from the agency and the public.
Applicable Tax Law and Regulations
Section 1105(a) of the Tax Law imposes a sales tax upon "[t]he receipts
from every retail sale of tangible personal property, except as otherwise
provided in the article."
Section 1105(c) of the Tax Law imposes tax upon the receipts from every
sale, except for resale, of certain enumerated services.
Section 525.2(a)(3) of the Sales and Use Tax Regulations provides that
"[t]he sales tax is a 'destination tax', that is, the point of delivery or the
point at which possession is transferred by the vendor to the purchaser or
designee controls both the tax incident and the tax rate."
Opinion
In Lockwood Support Services, Inc., Adv Op Comm T&F, July 29, 1988,
TSB-A-87(26.1)S, pertaining to a petitioner engaged in the business of aerial
photogrammetry which obtained information about physical objects and the
environment through the process of recording, measuring and interpreting aerial
photographic images and patterns of electromagnetic radiant energy and other
phenomena and provided its client with its findings, it was concluded that when
the petitioner acted in the capacity of a licensed land surveyor pursuant to

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Section 7203 of the Education Law or in the capacity of a licensed professional
engineer pursuant to Section 7201 of the Education Law, such services were
outside the scope of the sales tax. The opinion did conclude that to the extent
the petitioner was making sales of tangible personal property, such sales of
tangible personal property would be subject to sales and use tax. Examples of
this would be aerial photographs or maps.
In the instant case, Company A, to assist its clients in meeting NYSEQRA
visual impact requirements, photographs and maps the visual impact its client's
proposed structure will have upon a certain area's aesthetic resources. After
obtaining topographical maps of the site and surrounding area of the proposed
structure, Company A deploys a helium weather balloon and photographs such
balloon from various points within a 2 ½ mile radius of the site to determine the
visual impact of the structure. The film is then developed and scanned into a
computer. Company A then constructs a model of the actual proposed structure,
using the dimensions and drawings furnished by the construction engineer. A
computer program is then used to photo-realistically render the structure as seen
from various selected points.
The photo-realistically rendered structure is
inserted into digitized photos Company A has taken and converted into digitized
photographs, which are delivered to Company A's client as part of Company A's
report and for use as visual aids in presentations to the NYSEQRA review agency.
In addition, as a separate service, Company A using the information it obtained
to prepare the digitized photographs, may prepare maps and a more detailed
report.
As part of its services, Company A attends meetings of the NYSEQRA
review agency to make the presentation before the review agency and the public.
The principals of Company A are not licensed surveyors or engineers under the
Education Law.
Company A in providing reports and digitized photos to be used as visual
aids for presentation to the NYSEQRA review agency is providing a nontaxable
service which is not among the enumerated services subject to tax under Section
1105(c) of the Tax Law. This is so, regardless of the site location and the
delivery point of the reports.
However, to the extent that Company A makes sales of tangible personal
property, such sales may be subject to sales and use tax. Examples of this would
be photographs and maps sold to clients without reports of findings and
presentations before NYSEQRA, or separate orders by clients for extra copies of
photographs and maps. Pursuant to Section 525.2(a)(3) of the Sales and Use Tax
Regulations, if Company A is making such sales of photographs and maps which will
be delivered within New York State, then such sales will be subject to sales tax
regardless of the site location.

DATED: September 29, 1997

NOTE:

/s/
John W. Bartlett
Deputy Director
Technical Services Bureau

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