The New York State Department of Taxation and Finance issued an advisory opinion, concluding that a taxpayer’s charges for its online webhosting solution were not subject to sales tax. The customers pay an annual fee for their events (audio and video meetings, conferences, webinars and live presentations) to be hosted and maintained and also for on-demand viewing of the events. The Department concluded that, to the extent that the product facilitates the hosting of events, it is not taxable. The ability to create event pages, build webinar features into events, and control the player/console interface would have been taxable prewritten software, if sold separately. But the features did not cause the entire charge to be taxable because they were provided at no additional charge and were ancillary to the main function of the webcasting and virtual communications product.
