Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
100.0000 ADVERTISING AGENCIES, COMMERCIAL ARTISTS AND DESIGNERS—Regulation 1540
(b) DELINEATORS AND DESIGNERS
100.0071 Comprehensive Pencil Layouts—Independent Contractor. A commercial artist prepares comprehensive pencil layouts for a telephone company's yellow pages. The artist creates penciled work sketches using paper, borders, and other fabrication materials provided by the telephone company. The artist provides her own pencils and also some supplies used on the layouts. The artist prepares the artwork at her residence and works at her convenience as long as the assigned work is completed by a stated deadline. No invoicing occurs. The work is priced by unit, and pricing is based on layout size and the estimated time required to complete a rough layout. All prices are determined by the telephone company and the artist can accept or reject any work assignment.
Under these facts, the artist is self employed and not an employee. The artist has exclusive discretion to self determine her day to day business activity and practices, and her ability to accept or decline projects. Both the artist and telephone company are free to terminate their relationship at the end of each contract.
Because the artist is an independent contractor and not an employee of the telephone company, her transactions constitute sales of tangible personal property and the amount received is taxable gross receipts. 5/22/91.