New York Grants Sales Tax Refund to Online Loan Marketplace

A New York taxpayer, an online loan marketplace, filed a petition against the Department of Revenue for a sales tax refund from the state since its primary function is not as an information services provider. The service provided by the online loan marketplace is connecting and matching prospective borrowers seeking loans with lenders that are seeking qualified borrowers. The fees come from the lender up front. The New York Division of Tax Appeals found that an online loan marketplace was not a taxable information service based on the following: “an information service “has been interpreted to mean ‘the sale of the service of furnishing information by a business whose function it is to collect and disseminate information which is taxable under Tax Law § 1105 (c) (1) and not the mere sale of information.’” Therefore, the taxpayer’s petition was granted. (New York Division of Tax Appeals, DETERMINATION DTA NO. 829714, December 2021)

Posted on January 11, 2022