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New Jersey Issues Guidance on Taxability of Information Services



New Jersey decision on Information Services - Blog PostThe New Jersey Department of Taxation issued Publication ANJ–29, which offers new guidance regarding what constitutes a taxable information service. New Jersey sales tax applies to the collection, compilation, or analysis of information, where the purpose of the transaction is the information itself, not a related professional service. Known as “information services,” these transactions commonly include sales of mailing lists, market research reports, and credit reporting services. Sales of information services can also include fees charged for access to information, such as stock quotes or legal research, delivered in any medium, electronic or tangible.

Information services do not include the furnishing of data for the purposes of a larger professional service. For example, a lawyer who gathers personal information about a client during the course of representation is doing so for purposes of legal representation. In this instance, the object of the transaction is not information collection itself. As such, the transaction would not qualify as a taxable information service. Along the same lines, transactions for the sale of data that are personalized, and not incorporated into reports furnished to others, are similarly not taxable information services. Custom market research reports, for example, are created for one client and not for outside distribution, and are therefore not taxable.

For further information, the publication can be found in its entirety on the State of New Jersey Department of the Treasury website.

TECHNICAL INFORMATION CONTACT:

Jeremiah T. Lynch, Principal – Ryan

In accordance with Circular 230 Disclosure

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Mr. Lynch is a frequent speaker on tax topics. He has spoken for the following organizations: American Electronics Association, Association of American Publishers, Council On State Taxation, Georgetown State and Local Tax Conference, Institute for Professionals in Taxation, National Institute on State and Local Taxation, New York University, Institute on State and Local Taxation, Tax Executives Institute.