[SinglePic not found]Supposedly to be in line with recent judicial case law, the New York State Department of Taxation and Finance has reversed its previous position and now declares that the sale of Title Abstracts are subject to sales tax in New York. This new ruling will take effect September 1, 2010. The memorandum issued by the Department reads in pertinent part:
Abstracts of title
Previous correspondence from the Tax Department indicated that sales of abstracts of title were not subject to sales tax. To better reflect controlling judicial case law, the Tax Department has changed this policy. Therefore, beginning on September 1, 2010, the sale of an abstract of title to real property is the sale of a taxable information service. This includes the sale of an abstract of title to either a prospective purchaser of real property or to an attorney representing a prospective purchaser. But, opinions of title offered by an attorney are considered legal services and are not subject to tax. Therefore, the sale of an abstract of title to an attorney for use in conjunction with rendering an opinion of title or providing other legal services is a retail sale subject to sales tax as described herein. Treating the sale of an abstract of title as the sale of a taxable information service is a change to the Tax Department’s previous policy on sales of abstracts of title. Any statements issued by the Tax Department regarding its previous policy with respect to abstracts of title are revoked and can no longer be relied upon.
It is still unclear as to what parts of a title abstract are subject to the sales tax and the New York State Land Title Association is in contact with the New York State Department of Taxation and Finance to obtain guidance and clarification on the matter.
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