Sales and Compensating Use Tax – New York State’s Department of Taxation and Finance has issued a Memorandum dated July 19, 2010 captioned “Sales and Compensating Use Tax Treatment of Certain Information Services”. According to the Memorandum, “[a]s a general rule, furnishing information created or generated from a common database, or information that is widely accessible, is a taxable information service”. The following are among the services listed in the Memorandum as being taxable information services for which sales tax must be collected, commencing September 1, 2010:
•“public records furnished (electronically or in paper format) by a private entity, such as a document retrieval service (examples include real property deeds…however, public records sold by a governmental entity, such as a county clerk, are not subject to tax…) as an “information service”
•“real property information databases…”
The Memorandum specifically deals with abstracts of title:
“..beginning on September 1, 2010, the sale of an abstract of title to real property is the sale of taxable information services. This includes the sale of an abstract of title to either a prospective purchaser of real property or to an attorney representing a prospective purchaser. However, opinions of title offered by an attorney are considered legal services and are not subject to tax. Therefore, the sale of an abstract of title to an attorney for use in conjunction with rendering an opinion of title or providing other legal services is a retail sale subject to sales tax as described herein.”
TSB-M-10(7)S is posted on the Department’s web site at
http://www.tax.state.ny.us/pdf/memos/sales/m10_7s.pdf