The New York Department of Taxation and Finance (NYDTF) recently released an advisory option related to the taxability which concluded that the sales of personalized astrological birth chart reading services are not subject to New York State and local sales and use taxes.
The petitioner requesting this advice provides daily and monthly horoscopes and a content library through a website and app, as well as premium options for live individual birth chart readings containing information about areas of the client’s life including love, career, and family. The astrologers analyze the positions and interactions of planets at the time of the client’s birth to see how this shapes personality, motivation, and desires. The petitioner argues that no two readings are the same and that the premium customers are paying for the time and expertise of the astrologers.
In analyzing this question, the NYDTF considered if the astrological readings would be considered an information service under NY Tax Law § 1105(c)(1), or if it was considered a taxable information or entertainment service delivered by telephone under NY Tax Law § 1105(c)(9). First, the NYDTF held that the petitioner’s service does not constitute a taxable information service under NY Tax Law § 1105(c)(1). Astrologial readings, they noted, are “clearly distinguishable” from the simple retrieving, collecting, compiling, and furnishing information that constitutes a taxable information service. Once the Department ruled the charts were not an information service under New York Tax Law § 1105(c)(1), they determined that they also would not be subject to the tax on information services delivered by phone described in NY Tax Law § 1105(c)(9)(i) because the service must be taxable if provided in written form, which this was not. Further, the petitioner’s services are provided by internet on the website or mobile application rather than by phone, which additionally excludes these services from the tax in NY Tax Law § 1105(c)(9)(i) and (ii).
Many factors were considered in this advisory opinion, but the basic underlying questions relate to what the clients are buying and how. In this case, the taxpayer was collecting and delivering information to clients, however, the services provided were broader and more customized than New York’s definition of information services. Also, since state law specifically states taxable services as being provided by telephone, the fact that this business provides services online or by an app means they do not meet the requirements to be taxable. When selling into any state, taxpayers need to be aware of exactly what their clients are buying from them and how the clients are receiving any associated items or services with the awareness that changes in the business model may affect taxability, and that each state may classify the sale items or services differently. (Advisory Opinion TSB-A-24(23)S, New York Commissioner of Taxation and Finance, dated August 2, 2024, Ladouceur, Mary Ellen, Principal Attorney writing for Office of Counsel)