New York – Advisory Opinion TSB-A-13(39)S: Reports or Samples Delivered Out Of State Not Taxable

SALT Report 3150 – The New York Department of Taxation has issued an Advisory Opinion (TSB-A-13(39)S) in regards to whether a Taxpayer’s “performance of research and development services on behalf of its out-of-state parent, which result in reports or samples being delivered out-of-state, are subject to sales and use tax.”.  The Opinion states New York State Tax Law subsection 1105 where “sales of services are generally not taxable unless the Tax Law specifically enumerates them as taxable”; however, “Tax Law 1105(c)(1) imposes tax on the sale of information services…”.  The report goes on to say that “research and development services in the laboratory sense to develop new products or perfect existing technologies are not taxable as information services even if a report is produced..” but then goes on to conclude that the (Taxpayer) petitioner has not provided sufficient information to make a definitive conclusion as to whether “Petitioner’s (Taxpayer’s) service is an information service or a nontaxable research development service.”

It was the ultimate destination of delivery of the reports or samples that rendered the nontaxable conclusion.  The issue of “information service” versus “research and development” was not documented and therefore did not contribute to the non taxable default of interstate commerce.

For Further Information:                                   

New York Department of Taxation:  Advisory Opinion TSB-A-13(39)S

NY Tax Law Section 1105