On June 26, 2019, the New York Court of Appeals held that a price comparison service was taxable as an information service because the information was not personal or individual in nature, which would exclude the service from sales tax.

The taxpayer operated a chain of grocery stores. As part of its pricing strategy, the taxpayer engaged a company to monitor competitors’ prices. The taxpayer selected the products and specific competitors’ locations to be investigated. The provider would then create a confidential report based on the pricing data collected. Under New York law, information services are subject to sales tax unless the information is personal or individual in nature. Here, the Court held that the pricing information and reports could not be personal or individual in nature because such information was derived from a non-confidential and widely-accessible source – the shelves of the taxpayer’s competitors. As such, the pricing service was a taxable information service.

Significantly, the Court confirmed its single rule for construing exemptions, deductions and exclusions, “each of which operates to negate the taxpayer’s obligation to pay the otherwise applicable tax.” Under this rule, exclusions are interpreted the same as exemptions and deductions and trigger a presumption in favor of taxation. In a concurrence, one justice commented on the practical impact of this rule: “in New York, the taxpayer always loses.” Wegmans Food Markets, Inc. v. Tax App. Trib., No. 56 (N.Y. June 26, 2019).