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New York: Proposed bills would impose sales tax on digital advertising

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Detailed New York Development

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Identical bills were recently introduced in the New York Assembly and Senate that would impose sales and use tax on digital advertising services, unless such services were purchased for resale.  The bills define “digital advertising services” as “advertisement services on a digital interface, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services which markets or promotes a particular good, service, or political candidate or message.”  The bills do not provide any methodology for sourcing digital advertising services to the state.

A different bill had previously been introduced in the New York Senate that would impose a gross receipts tax on revenues derived from digital advertising services. That bill, which is pending in committee, defines “digital advertising services” as “advertisement services on a digital interface, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services, that use personal information about the people the ads are being served to.” Please contact Judy Cheng at 212-872-3530 for more information on Assembly Bill 10321 and Senate Bill 8166.

This Week's Developments

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Sarah McGahan

Sarah McGahan

Director, State & Local Tax, KPMG US