May 3, 1990
TO: TAX COMMITTEE NO. 9-90
RE: PROPOSED NEW YORK SALES TAX ON SERVICES
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As you know, the New York State legislature is currently
considering revenue raising measures as part of its annual budget
process. The attached bill would extend the current state sales
tax of 4% (plus an additional amount of up to 4% at the option of
localities) to certain services. Specifically, the bill would
extend the tax to "performing business, marketing, opinion, or
other economic . . . studies, research, analysis, or data
compilation, including: business economic research, business
research, economic research, financial research . . . [and]
market research . . . ."
We have been informed that the legislature does not intend
to apply this tax to either investment advisory fees paid by
funds or advisory fees paid by other private clients. The
language is unclear, however. Consequently, the Institute will
seek clarification that investment advisory fees are not included
within the scope of the above language.
We will keep you informed of developments.
David J. Mangefrida, Jr.
Assistant General Counsel
Attachment