Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 100.0037.400


100.0037.400 Transfer of Artwork into Computer's Memory. A graphic artist completes artwork on his computer and copies the artwork onto a digital storage file format such as "zip, syquest, floppy disc (or via internet)." The graphic artist transfers the file to the customer's premises and transfers the file of digital information into the customer's computer memory. The graphic artist then removes the original disk, which remains in his possession at all times. The copied file on the customer's computer would then become the customer's property. The customer may then manufacture tangible, hard copy prints of the file.

Where the graphic artist actually operates the customer's computer equipment to transfer the artwork into the computer's memory and maintains sole control over the customer's computer during this process, there is no transfer of tangible personal property to the customer. Therefore, the graphic artist's charge would not be subject to sales tax. However, if the graphic artist transfers the artwork to the customer in any tangible form such as printed copies or diskettes, tax applies to the charge. 5/14/97.