News From the SALT Minds-Oct 4, 2013

Summary. The State of New Jersey's Division of Taxation has issued guidance on when the retail sale of information services is subject to sales & use taxation.
 

Background.  New Jersey subjects to sales & use tax the retail sale of information services received by New Jersey customers.  The Division of Taxation has released ANJ-29, which provides guidance on which information services are subject to sales & use tax. In general, the customers of businesses that charge a fee to access any kind of information by any means can be subjected to this tax. How the information is accessed does not matter. For example, fees to access stock quotes, financial or legal research, property values, or marketing trends are subject to this tax. Information services do not include personal, professional, or other types of nonenumerated services where the service providers collect or review information to provide the purchaser with a service. For example, accountants gathering financial information to prepare tax returns, lawyers gathering personal information to prepare a will, or architects gathering information to design a building are exempt from this tax.  The following chart summarizes the examples in Publication ANJ-29:

 


Taxable Information Services


Excluded Information Services


Information-based Services Not Subject to Tax


Mailing Lists


Purchase and Sales Data


Multiple Listing Service


Credit Reports


Custom Market Research Reports


Real Estate Appraisal


Abstracted Information


Website Information


Criminal Background Checks


Computer Databases


News Clipping Service


Consulting Services


Email Alerts

 

 

Legal Services 


Sales Tracking

 


Environmental Testing Services


Internet User Statistics

 

 

Payroll Process Service


Legislative Tracking Services

 

 

Court Stenography Services


Sales Lead Generation

 

 

Accident Reconstruction Services

   


Title Searches

   

 

Certificate Preparation 

   


Educational Seminars, Classes, or Courses

 

Prager's Take. This guidance provides much-needed clarity to an evolving issue. ANJ-29 draws a distinction between purchasing information and purchasing custom services based on information. In general, purchasing market data is subject to tax, unless the marketing data has been customized for the purchaser. Similarly, purchasing pre-packaged legal research is subject to tax, but purchasing legal advice written for a particular client is not. Please contact us at Prager-Metis if you have any question.