Title Abstracts and Public Documents Now Taxable
Joseph Lipari and Debra Silverman Herman
New York Law Journal September 17, 2010
The TSBM explains that to better reflect controlling judicial case law, the tax department is reversing its prior correspondence that indicated that sales of abstracts of title (condensed history of title to a particular piece of real estate) were not subject to sales tax. Therefore, on or after Sept. 1, 2010, sales of an abstract of title to either a prospective purchaser of real property or to an attorney who uses the abstract in connection with an opinion of title are taxable information services.
Notably, the TSBM concluded that a title search conducted by an attorney is exempt as the provision of legal services. While abstracts of title do reflect raw data, and therefore represent the type of information the sales tax law intended to be taxed as an information service, they are often used to prepare policies of title insurance. Difficult issues arise when the sale of the abstract is in connection with the sale of title insurance, since insurance is not subject to sales tax.
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