New Jersey: Taxing Information Services
- Sales Tax News
- Aug 22, 2013 | Gail Cole
Sales of information in New Jersey are subject to sales and use tax.
As explained in a New Jersey Department of the Treasury, any business that "charges a fee for access to any type of information other than personal or individual information… through any means…is selling an information service, because the true object of that transaction is the information itself. As such, these transactions are subject to tax."
Information services are the furnishing of information of any kind that has been "collected, compiled, or analyzed by the seller." Sales and use tax applies no matter how the information is transmitted, via hard copy report or electronic database or smoke signals.
The notice reminds that the information must be the "true object" of the sales transaction in order for it to be taxable. Services that use personal information or other information in the context of another service are not subject to sales tax. The following example is provided: if a lawyer collects personal information in order to draw up a will, the will is the true object of the transaction and the lawyer's service is not taxable.
Taxable information services in New Jersey include:
- Abstracted information for new construction projects;
- Credit reports;
- Computer databases;
- E-mail alerts;
- Internet user statistics;
- Legislative tracking services;
- Mailing lists; and
- Sales tracking and sales lead generators.
Non-taxable information services in New Jersey include:
- Custom market research reports;
- News clipping services;
- Purchases and sales data; and
- Website information.
Non-taxable services based on information (but not considered information services) include:
- Accident reconstruction services;
- Attorney services;
- Consulting services;
- Court stenography services;
- Criminal background checks;
- Environmental testing services;
- Payroll processing services;
- Real estate appraisal services; and
- Title searches (some aspects of title searches may be taxable).
Get Free Tax Rate Tables