New York ~ Sales and Use Tax: Sales of E-Books Not Taxable

A taxpayer’s sales of electronic books (e-books) are not subject to New York sales and use tax because the e-books are not tangible personal property and do not constitute information services. E-books purchased through the taxpayer’s electronic bookstore are delivered electronically via the Internet to customers and are stored on the customer’s personal electronic devices, including tablets and smart-phones. Customers are then able to view and read the e-books on certain electronic devices.

The taxpayer’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, a memorandum issued by the Department of Taxation and Finance (TSB-M-11(5)S) provides that the department’s current position is that electronic publications that meet the memorandum’s definition of an e-book do not constitute information services. (TAXDAY, 2011/04/08, S.29) Here, the taxpayer represents that all of its e-books meet this definition. Based on that representation, the taxpayer’s e-books are not taxable as information services under the department’s current policy.

TSB-A-11(20)S, New York Commissioner of Taxation and Finance, July 8, 2011

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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