January 20, 2022

Advisory Opinion Says, "E-Books Exempt from New York Sales Tax"

On Forbes.com, Peter Reilly briefly discusses the end of Borders and provides the full text of the New York Advisory Opinion that was published about three weeks ago about eBooks being tax exempt in New York State.

From the Opinion:

The Department of Taxation and Finance received a Petition for Advisory Opinion from [name redacted]. Petitioner asks whether its sales of e-books are subject to sales and use tax. We conclude that they are not.

Direct to Complete Forbes.com Article and Advisory Opinion

The full text of the advisory opinion is also available direct from the New York State Department of Taxation and Finance  (PDF; 2 pages)

You’ll also read that the petitioner was a California company [Apple???] who, “stores a digitized catalog of electronic books (“e-books”) available for sale to customers inside and outside New York through its on-line bookstore.”

The Analysis Begins:

The Tax Law imposes sales and use tax on tangible personal property, including prewritten software, and certain enumerated services, including information services (Tax Law § 1105[a], [c]).

Petitioner’s e-books are not tangible and do not include any prewritten computer software. Accordingly, they do not constitute tangible personal property. As to whether the e-books constitute taxable information services, TSB-M-11(5)S provides that the Tax Department’s current position is that electronic publications that meet the memorandum’s definition of an e-book do not constitute information services.

About Gary Price

Gary Price (gprice@mediasourceinc.com) is a librarian, writer, consultant, and frequent conference speaker based in the Washington D.C. metro area. Before launching INFOdocket, Price and Shirl Kennedy were the founders and senior editors at ResourceShelf and DocuTicker for 10 years. From 2006-2009 he was Director of Online Information Services at Ask.com, and is currently a contributing editor at Search Engine Land.