Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
100.0000 ADVERTISING AGENCIES, COMMERCIAL ARTISTS AND DESIGNERS—Regulation 1540
(a) IN GENERAL
100.0038 Charges to Agencies. Except in the case of a "loaned employee," freelance artists, copy writers, production supervisors, art directors, etc., who are hired by agencies to supplement the agencies' own staff are regarded as retailers of tangible personal property which they fabricate unless the agency sells the property prior to making any use of it.
"Employee" generally means a person who is on the payroll of the agency. A "loaned" person may be regarded as an "employee" if (1) the person is an employee of a lender, (2) the borrower/customer provides the tools, equipment, raw materials, and premises at which the work is done, (3) the charge is an hourly rate, (4) the borrower has other persons who are clearly employees performing similar work or a person who is capable of giving meaningful direction to the loaned employee beyond describing the result desired, and (5) the borrower, not the lender, must supervise the loaned employee. 5/5/94.