SALT Report 1801 – The New York Commissioner of Taxation issued a technical advisory regarding the sales and use tax obligations of a Taxpayer who creates images for submission to the U.S. Patent Office as part of a patent application, for courtroom presentations during trials and hearings, and for presentation at mediation and arbitrations. All of the Taxpayer’s designs are delivered to his customers electronically, usually in the form of a PDF file attached to an email.
The Commissioner determined that because the Taxpayer provides all of his drawings to his customers by electronic means they are not considered tangible personal property as defined in Tax Law section 1101(b)(6). Therefore, any receipts that result from the Taxpayer’s drawings are not subject to sales tax.
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