taxes

Information Services

If you're in the business of gathering and/or maintaining information for others, you may need to collect sales tax.

What is a Taxable Information Service?

Here are examples of taxable information services. This list does not include all information services, but it will give you some guidelines.

Taxable Information Services

• Newsletters.
• Scouting reports and surveys.
• Financial market reports.
• Data retrieval and/or research (stock quotations, court cases or administrative hearings).
• News clipping services, wire reports.
• Multiple listing services.
• Mailing lists.

Nontaxable Services

• Polygraph tests.
• Bank account balances.
• Seminars.
• Information sold to radio or television stations and most newspapers.
• Medical lab tests.
• Information gathered from direct scientific observation of physical phenomena.
• Information furnished by a residential subdivision or condominium homeowners association to its members.
• Furnishing an academic transcript.

Collecting Tax

Collect state sales tax, plus any city, county, transit tax or special purpose district tax on only 80 percent of the amount you bill for your information service. In other words, twenty percent of the sales price of an information service is exempt.

Materials, Supplies and Equipment

You must pay tax on materials, supplies and equipment you use to provide an information service.

Reselling Information Services

You may need to purchase an information service from a third party so that you can resell that information service to your customer. You can give a resale certificate to the third party in lieu of paying tax on an information service sold to your customer. You will then collect tax on 80 percent of the amount charged to your customer for the information service.

Need More Information?

See Rule 3.342, Information Services

94-109
(05/2024)