Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
100.0000 ADVERTISING AGENCIES, COMMERCIAL ARTISTS AND DESIGNERS—Regulation 1540
(c) PRELIMINARY AND FINISHED ART
100.0250 Where Preliminary Art Is Found Taxable. Company contracts to write, design and print a brochure for the State of California. Charges made to the state include "preliminary art."
Tax applies to the total sale price of the printed brochures with no deduction for the charge for preliminary art. "Preliminary Art" is taxable because it is not required to be prepared before entering into the contract or before obtaining approval of the finished art. Sales and Use Tax Regulation 1540(a)(11). 10/21/91. (Am. 2005–2).