New Jersey – Taxability of Information Services

SALT Report 2868 – The New Jersey Division of Taxation released a publication that discusses the application of sales and use tax to information services.  An information services is defined as the “furnishing of information of any kind, which has been collected, compiled, or analyzed by the seller, and provided through any means or method, other than personal or individual information which is not incorporated into reports furnished to other people.  Under New Jersey law, these services are subject to sales and use tax when purchased by New Jersey customers.

Further, any business that charges a fee to access any type of information other than personal or individual information such as, stock quotes, financial, legal research, property values, or marketing trends, through any means is selling a taxable information service, because the true object of the transaction is the information.

However, information services do not include personal or professional services or nonenumerated services in which the service provider collects and reviews information in order to provide the true object of the service.  For example, when an accountant gathers financial information to prepare a tax return, the object of the transaction is the service of preparing the tax return, not the information.

The following are examples of taxable information services:

  • Mailing lists delivered to customers
  • Credit reports sold to individuals and businesses
  • Abstracted information collected from various sources
  • Information stored and sold through a computer database
  • E-Mail alerts
  • Sales tracking
  • Internet user statistics
  • Legislative tracking services
  • Sales lead generators

The publication also provides examples of services that are taxable information services; however, they are not taxable because they provide personal or individual information that is not incorporated into reports furnished to others.

For Further Information

New Jersey Division of Taxation – Publication ANJ–29