New York State Department of Taxation and Finance
Taxpayer Services Divison TSB-M-97
Technical Services Bureau (1)C Corporation Tax
(1)S Sales Tax
January 24, 1997
IMPORTANT NOTICE
Internet Access Charges Not Subject To Sales Tax
and Telecommunications Excise Tax
Effective on or after February 1, 1997 the Department is implementing the
new Internet policy recommended in its January 1997 report on <i>Improving
New York State's Telecommunications Taxes</i>. Internet Access charges are
considered an unenumerated service not subject to the New York State and
local sales tax. Neither is Internet acces considered a telecomunications
service subject to the Section 186-e telecomunications excise tax.
Internet access is the connection provided to the Internet usually by a
"dial-up" service using a modem or a direct connection. Access is often
referred to as the "on-ramp" to the information super highway. Internet
access charges may also include items such as communications/navigation
software, E-mail privileges, news headlines, and certain website services.
When these services are furnished as part of a combined Internet access
charge, they are deemed incidental to the provision of Internet access and
the charge is not subject to sales tax.
Nexus with the state is not created merely by having a non-New York
Company's advertising appear on a New York server or through a New York
Internet service provider. This applies to both corporate franchise taxes
and the sales and use taxes.
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Chris Candreva -- chris@westnet.com -- (914) 967-7816
WestNet Internet Services of Westchester
http://www.westnet.com/