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This Ruling has been obsoleted in part by AN 94(3)

Ruling 89-246


In your letter you state that X Group, Inc. and X Consulting Services [hereinafter jointly referred to as "X"] serve their clients as consultants in real property development, creating development opportunities and providing a wide range of development services. The services typically begin with a feasibility study of a project, with X analyzing the market conditions, determining available sources of financing, and researching and analyzing various constraints on a proposed project, such as zoning limitations, property encumbrances, availability of utilities and the likelihood of community acceptance.

If a project is deemed feasible, X then offers services entailing detailed investigatory work into the project, such as area demographics and market research, site evaluation, permit requirements, budget estimates and location of financing. Finally, upon a commitment to do a project, X's services can extend to assistance in the planning and zoning process, coordination of the project design, preconstruction marketing, construction management, final coordination of financing and the location of and negotiation with prospective tenants of the project.

The services that X provides to its clients, as set forth above, are not taxable architectural or building engineering services nor are they taxable services to commercial real property.


November 29, 1989