Our nyc cpa office offers tax tips on sales of webinar and live stream products. New York, these are not subject to New York sales tax, but some additional optional services are subject to state and local sales tax. If through webinar and live stream products, the taxpayer provides its customers a means of making their presentations available for viewing over the Internet, keep in mind two essential aspects to this service. First, the service allows customers to upload presentations to the taxpayer’s website or, in the case of live streams, assists the customer in transmitting the presentations to the website. Second, the taxpayer deploys the necessary technology to allow viewers, using their own telecommunication connection, to securely access that content on its website, regardless of the device the viewer chooses to use (e.g., cellphones, tablets, or computers). These are not taxable services.
The taxpayer’s customers receive additional benefits from the webinar and live stream products at no additional charge. For instance, customers are able to work with an event manager who has expertise in structuring webinars and live streams, along with the services of a moderator who will work with customers’ viewers. Also, the taxpayer handles the registration of the viewers, and provides customers with reports about the viewers. Both products also make prewritten software available to customers’ viewers that allow those viewers to interact with the presenter or other viewers during the presentations. Finally, the taxpayer, as a part of its webinar product, makes a recording of the webinar available for viewing in its online library. Some of these additional aspects of the taxpayer’s live stream and webinar products, if sold separately, would be taxable, such as the access to prewritten software. However, these additional services and software are always offered as part of the taxpayer’s live stream and webinar products at no additional charge. Thus, their tax status is not separable from that of the live stream and webinar products. Because these additional services and software are ancillary to the main function of the taxpayer’s live stream and webinar products, they do not make those products taxable.
In addition, the taxpayer offers various optional services for an additional charge (i.e., online library, e-commerce services for payments, technical support call center, sponsors and advertising, evaluations and continuing education (CE) modules, multi-languages, and closed captions). The evaluations and CE module product is taxable because that product provides a customer’s viewers with access to prewritten software that allows the viewers to demonstrate their attentiveness, take tests, fill out evaluations, and track their CE activity. By giving the viewers the ability to use prewritten software at an additional charge, the taxpayer is making taxable sales of tangible personal property in New York to the extent that the customers’ viewers are using the prewritten software in New York. Similarly, the separate charge for the on-site or online evaluations optional component of the online library product is taxable as prewritten software. Accordingly, the taxpayer must separately state the tax for those products on any invoice or memorandum of sale given to the customers and collect tax based on the proportion of the customers’ viewers who give New York addresses in their CE information. If the taxpayer sells the webinar or live stream product with these optional products and does not break out a separate charge for the optional products, the entire charge is taxable. The taxpayer’s charges for its remaining optional services are not subject to sales and use tax.
If you have questions about sales and use tax in New York State or sales and use tax in New York City, please contact our lower Manhattan CPA firm.