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New York: Electronically Delivered Images Not Taxable


Are receipts from sales of electronically delivered design images subject to sales tax in the state of New York? No they are not, according to an advisory opinion issued by the New York State Department of Taxation and Finance. (TSB-A-12(23)S).

This is an interesting ruling. Tax Law in New York imposes sales tax on receipts from "every retail sale of tangible personal property… " barring specific exemptions and exclusions. (Tax Law § 1105(a); 20 NYCRR § 526.6(a) ). Tangible personal property in New York does include artistic items, "such as sketches, paintings, photographs, moving picture films, and recordings." (Tax Law § 1101(b)(6); 20 NYCRR § 526.8(a)).

The reason sales tax is not imposed on the sale of the electronically transmitted design images in TSB-A-12(23)S is because of how they are delivered: electronically only, as PDF files. There is no tangible format, no hard copy.

In New York, if there is a tangible format as well as an electronically transmitted image, the receipts are subject to sales tax.  (TSB-A-97(48)S).

Not only does not printing an image help save the planet, it also saves money on taxes in New York.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.