20 NYCRR § 4-3.1

Definitions

Official textus-ny/regstax.ny.gov11 subsections

For purposes of this Subpart, the following terms shall have the meanings indicated below.

# (a)

Consumer means an individual or entity whose location is where the business customer derives value from the digital product or digital service provided by the corporation.

# (b)

Customer means the party who enters into a transaction with the corporation for the purchase of, rental of, license to use, or remote access to a digital product from the corporation. A customer can be either an individual customer or a business customer. In any instance in which the corporation, acting in good faith, cannot reasonably determine whether the customer is an individual customer, the corporation must treat the customer as a business customer.

# (1)

Individual customer means a customer who enters into a transaction with the corporation for the purchase of, rental of, license to use, or remote access to a digital product or digital service for personal use, and not for a business purpose.

# (2)

Business customer means a customer that is not an individual customer, including, but not limited to, a sole proprietor, S corporation, limited liability company, limited partnership, limited liability partnership, general partnership, corporation, non-profit organization, trust, the U.S. Government, any foreign, state, or local government, or any agency or instrumentality of such government.

# (c)

Digital product means any property of whatever nature delivered, furnished, provided, or given access to through the use of wire, cable, fiber-optic, laser, microwave, radio wave, satellite or similar successor media, or any combination thereof (hereinafter referred to as digitally delivered). Digital product includes, but is not limited to, an audio work, audiovisual work, visual work, electronic book or literary work, graphic work, electronic database, game, information or entertainment service, website, or digital application that is digitally delivered (unless digital delivery is incidental to the sale of a license to distribute, broadcast, or right to sublicense the work to third parties for other than personal use). In addition, digital product includes computer software by whatever means delivered, including physical media. Further, digital product includes the storage of any property that constitutes a digital product.

# (d)

Digital service means a service not otherwise addressed in section 210-A(1) – (3) or (5) – (9). It does not include a service related to an asset described in section 210-A(5). A digital service must be:

# (1)

directly related to the creation, testing, modification, enhancement, and maintenance of a product that must be digital in nature with no comparable non-digital form, regardless of the means of transmission or level of human interaction; or

# (2)

that has been fully automated, uses one or more software applications in providing the service, and is delivered via the means listed in the first sentence of the definition of digital product in subdivision (c) of this section. However, this does not include services where the service provider:
(i) includes an element of human interaction as part of the service, unless incidental; or
(ii) offers alternative services or optional features that include human interaction and provide similar functionality to the automated service.

# (e)

Intermediary transaction means a transaction where the business customer derives value from a digital product or digital service at the location of the consumer rather than the location of the business customer itself. Such a transaction is sourced using the rules for intermediary transactions in section 4-3.8 of this Subpart. Intermediary transactions do not include digital products or digital services sourced under the special rules in section 4-3.3 of this Subpart.
(1) To be considered an intermediary transaction, the digital product or digital service, pursuant to the explicit or implicit terms of a contract or other agreement between the corporation and business customer, must meet the requirements of subparagraph (i), (ii) or (iii) of this paragraph:
(i) it must be provided by the corporation, at the direction of the business customer, directly to the consumer;
(ii) it must be sold by the corporation to the business customer, who then passes on the digital product or digital service to the consumer and either:
(a) the corporation actively maintains or interacts with the digital product or digital service after the consumer receives it from the business customer; or
(b) the corporation must be obligated to perform a substantial portion of the digital service after the digital product or other property that the service relates to is delivered by the business customer to the consumer; or
(iii) it must be made readily available by the corporation (e.g., through a website) at the request of the business customer to be accessed by the consumer and the corporation actively maintains or interacts with the digital product or digital service after the consumer receives or accesses it from the business customer.

# (f)

Location where a contract is managed by the customer means the primary location at which an employee or other representative of a customer serves as the person with responsibility for monitoring or managing the day-to-day execution of the contract of sale, rental, license to use, or granting of remote access with the corporation.

Source: official source document (DTF adopted rule text, December 2023 corporate reform)

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