New York issues guidance on software and web-based services

• Hosted Email Service Exemption: A secure hosted exchange email service from an out-of-state provider is not subject to sales tax, as it qualifies as Internet access exempt under the Internet Tax Freedom Act (ITFA).
• Taxable Analytics Services: Sales receipts from a web and mobile analytics service provider are subject to sales tax. The service involves collecting, compiling, and analyzing information, which is considered a taxable information service.
• Compliance Recommendations: Companies should review their Internet and email service contracts to ensure compliance and avoid unnecessary sales tax charges. They should also evaluate digital service offerings to comply with New York’s sales tax on information services.

Source PwC

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