Is a construction project management consulting service -- coordinating architects, contractors, and schedules as the owner's agent, without doing any construction or design work itself -- subject to New York sales tax?

Plain-English summary

Greenwich Building Consultants (GBC) provides project management consulting for high-end residential, commercial, and hospitality land-development and construction projects, ranging from a one-time analysis report all the way through hands-on management of the entire project team. Acting as the project owner's agent (never contracting directly with architects, contractors, or subcontractors itself), GBC coordinates and schedules the design and construction teams, reviews staffing and quality control, monitors budgets and invoices (forwarding payment recommendations to the owner), and tracks procurement -- all while providing confidential written and verbal status reports. Critically, GBC never buys materials or services on a client's behalf, never sells tangible property to clients, and performs none of the actual design, construction, or interior-decorating work.

New York's sales tax on services only reaches services that the statute specifically lists (an "enumerated services" system) -- it doesn't tax services generally just because they're valuable or professional. The Department found that GBC's consulting, coordination, and oversight role -- including its incidental confidential status reports -- doesn't fit any of the categories Tax Law § 1105(c) lists as taxable. Because GBC isn't performing construction, design, interior decorating, or any other listed service, and isn't buying or selling tangible personal property, its fees fall outside the sales tax entirely.

What this means for you

Construction and development project management consultants

If your role is genuinely limited to coordination, oversight, scheduling, budget monitoring, and reporting -- acting as the owner's agent rather than performing hands-on design or construction work yourself, and not buying/selling materials -- your consulting fees likely fall outside New York's enumerated-services sales tax, following this same reasoning.

Property owners hiring project management consultants

Don't assume every construction-adjacent service provider's invoice carries sales tax. A pure oversight/coordination role, distinct from the design and construction firms actually doing the work, can be a non-taxable service even on a large capital project.

Accountants and tax professionals

This is a useful template for New York's "enumerated services" analysis generally: identify precisely what the taxpayer does (and doesn't do -- especially whether it ever takes title to or transfers tangible personal property), and check that activity against the specific list in § 1105(c) rather than assuming a service tied to a taxable industry (construction) is itself taxable.

Common questions

Q: Does the fact that GBC's work relates to taxable construction/renovation projects make its own consulting fee taxable?
A: No -- the tax question is about GBC's own specific activities (coordination, oversight, reporting), which aren't listed as a taxable enumerated service, regardless of the taxability of the underlying construction work performed by others.

Q: Would the answer change if GBC purchased materials or contracted directly with subcontractors?
A: This ruling doesn't address that scenario -- it's expressly premised on GBC never making purchases or sales of tangible personal property and never contracting directly with project participants.

Q: Are the periodic status reports GBC provides separately taxable as a distinct product?
A: No -- the ruling treats them as incidental to GBC's overall non-taxable consulting service, not a separate taxable deliverable.

Citations and references

Statutes and prior rulings:

• Tax Law § 1105(c) (enumerated taxable services)
• Refuse and Environmental Systems, TSB-A-97(85)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1999.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a99_28s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-99(28)S
Sales Tax
May 19, 1999

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S990126A

On January 26, 1999, the Department of Taxation and Finance received a Petition for
Advisory Opinion from Greenwich Building Consultants, LLC, 254 Mill Street, Greenwich,
Connecticut, 06830.
The issue raised by Petitioner, Greenwich Building Consultants, is whether project
management consulting services are subject to sales tax.
Petitioner submitted the following facts as the basis of this Advisory Opinion.
Petitioner provides project management consulting services to corporations or individuals
in the high end residential, commercial, and hospitality market for land development and building
projects. The breadth of review, reporting, oversight and management can range from initial
planning and design through construction to occupancy of the project. The types of projects include
renovations, additions and new construction for residential or commercial use. The types of services
may include onetime reports of analysis and recommendations, coordination and scheduling of
project participants, or direct management of all contracted parties as the agent for the project owner
("Owner"). Contracts for service normally proceed from extensive analysis and reporting in the pre­
construction state to direct management of design and construction. Petitioner never contracts with
project participants, such as designers, architects or contractors, directly, but as an agent for the
Owner will manage all parties contracted by the Owner. Verbal and written reports are provided to
clients on a variety of issues, including periodic routine project status reports for the life of the
assignment. All reports furnished to a client are confidential and are not furnished to other clients.
Petitioner may contract directly with an Owner, or with a corporation or partnership controlled by
the Owner. At no time are any payments made from Petitioner to any contractors or other project
participants. Petitioner makes no purchases of tangible personal property or services for or on behalf
of its clients or sales of tangible personal property to its clients, and performs none of the design,
construction, interior decorating or other project services.
Petitioner provided a sample contract. Article 2 of the contract, which outlines the scope of
services provided to clients, provides, in part:
ARTICLE 2 - SCOPE OF SERVICES
2.1 Owner’s Agent

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Sales Tax
May 19, 1999

GBC shall be the agent of the Owner with regard to all duties and
responsibilities within the scope of services set forth herein ... GBC shall provide
advice to the Owner as a consultant in the form of regularly scheduled reports and
recommendations, verbal or written, as well to act in place of the Owner in providing
management and direction to the Project Team.
*

*

*

2.3 Coordination and Management of Project Work
2.3.1 GBC shall coordinate the efforts and activities of the entire Project
Team with respect to the Project. To this end as required, GBC shall initiate,
schedule and lead meetings of the Design Team, Construction Manager or
Contractor, and/or any consultant or subcontractor deemed necessary for any such
meeting ... The purposes may include, but are not limited to, general status and
direction, special requirements, construction, scheduling and budgeting and/or to
review the status of design, procurement and/or construction issues.
2.4 Project Schedule
GBC shall provide to the Owner for review on a monthly basis an updated
Project Schedule based upon actual and projected design and construction progress....
2.5 Review of Staffing of Design Team
GBC shall continually review and monitor the Design Team organization to
ensure that personnel employed and approved for the Project are sufficient to meet
the Project schedule and are performing to the satisfaction of GBC and the Owner....
GBC shall monitor the development of all design to monitor compliance with
the Project Control Budget and Schedule....
2.6 Review of Construction Manager and Subcontractor Staffing
GBC shall continually review and monitor the Construction Manager’s or
Contractor’s organization to ensure that personnel employed and Subcontractors
approved for the Project are sufficient to meet the Project Schedule...
2.7 Quality Control

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Sales Tax
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GBC shall monitor construction of the Project on an on-going basis for
quality control procedures ... GBC’s performance of this responsibility may include,
but not be limited to, the following: (1) reviewing all test and inspection reports with
respect to the Project; (2) in company with the Construction Manager, meeting with
Subcontractors and vendors and suppliers to verify that construction materials and
equipment are of the proper type and quality; and (3) inspecting the Project
periodically, in conjunction with the Design Team, to determine whether the quality
of workmanship is in accordance with the Design Documents....
*

*

*

2.9 Construction Cost Control
On a monthly basis:
GBC shall review the Construction Manager’s cost itemization and proposed
payment schedule for that month, including all invoices. GBC shall verify the
appropriateness of each invoice or requested payment based upon the Project Budget,
the Project Schedule and actual progress of construction, and shall approve or
disapprove each individual item. The GBC recommendation shall be forwarded to
the Owner for payment via the Architect for Certification...
GBC shall review the invoices of the Design Team for compliance with
respective budgets and schedule. A GBC recommendation shall be forwarded to the
Owner for payment....
*

*

*

2.11 Procurement of Materials and Labor
GBC shall continually monitor the manner in which Construction Manager
procures construction materials, supplies, equipment and labor for the Project...
*

*

*

2.14 Construction Means and Methods
Except as otherwise specifically provided in this Agreement, GBC shall not
have control over, or be in charge of, and shall not be responsible for construction
means, methods, techniques, sequences or procedures or for safety procedures or
programs implemented by the Construction Manager, any Subcontractor or any other
party retained by the Owner to perform work on the Project... GBC shall not have

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control over or charge of and shall not be responsible for acts or omissions of the
Construction Manager, Subcontractors, the Design Team, their agents and
employees, or any other party performing work or services in connection with the
Project.
Applicable Law
Section 1105(c) of the Tax Law imposes tax upon the receipts from every sale, except for
resale, of certain enumerated services.
Opinion
Petitioner is providing consulting and coordinating services in the management of parties
engaged by the Owner of real property for renovations and construction of such property. Petitioner
is not providing any construction, design, interior decorating or other project services. Petitioner is
not making purchases of tangible personal property for or on behalf of clients or sales of tangible
personal property to clients. Petitioner’s services, as described above, including the incidental
furnishing of confidential project status reports, are not included among the enumerated services
subject to sales tax under Section 1105(c) of the Tax Law. Accordingly, Petitioner is not required
to collect sales tax on charges for its services. (See Refuse and Environmental Systems, Adv Op
Comm of T & F, December 29, 1997, TSB-A-97(85)S).

DATED: May 19, 1999

NOTE:

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

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