On March 8, 2019, the New York Department of Taxation and Finance released an Advisory Opinion ruling that an online marketplace operator that facilitates taxable software sales is a “vendor” liable to collect sales tax. The Department relied on a rarely-used portion of the definition of “vendor,” which states that “when in the opinion of the commissioner it is necessary for the efficient administration of [the sales tax law] to treat any salesman, representative, peddler or canvasser as the agent of the vendor . . . the commissioner may, in his discretion, treat such agent as the vendor jointly responsible . . . for the collection and payment of the tax.” According to the Department, treating a software marketplace operator as a vendor will improve the efficiency of sales tax administration because the software marketplace operator “is in a better position” than a seller of software on the marketplace to collect the tax. The Department further stated in a footnote that a 1999 Advisory Opinion — which ruled that an online marketplace operator facilitating sales of tangible goods was not a “vendor” for New York sales tax purposes — was inconsistent with the new Advisory Opinion and therefore should no longer be followed.

Advisory Opinion, TSB A 19(1)S (N.Y.S. Dep’t of Taxation & Fin., Mar. 7, 2019, released March 8, 2019