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I've received consumer subscriptions, and now sending an invoice to a school, for an educational technology piece of software (a web based video game, non-downloadable), and am curious about NYC tax rates on such items.

According to this article by NYC Dept. of Tax,

Prewritten computer software is taxable as tangible personal property, whether it is sold as part of a package or as a separate component, regardless of how the software is conveyed to the purchaser. Therefore, prewritten computer software is taxable whether sold:

on a disk or other physical medium;

by electronic transmission;

or by remote access.

But it goes on to say

Computer Software Services:

Many services related to computer software are exempt. Examples of these services include:

training

consulting

instruction

It would seem my product falls under the "instruction" exemption.

Furthermore, this information by NYC Dept. of Tax includes:

Transactions that are not subject to sales tax

  • ...
  • sales of educational services;

This sales tax map by Avalara, albeit a bit confusing, seems to indicate

  • "Software as a Service": Taxable
  • "Custom Software Delivered on Tangible Personal Property" (I.e., someone plays my educational game website on their laptop): Exempt

So my questions are:

  • Categorization of a web based edu game: Since "Software as a Service" is taxable, and "Custom Software Delivered on Tangible Personal Property" is exempt, what would this software be classified as?
  • Edu. Software exemption: Would an educational game such as this be exempt anyway (i.e., I do not collect taxes on the invoice I send out, and do not pay them at year's end) in NYC?

I would love some clarity.

Thank you

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