Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2017
Sales and Use Tax Annotations
100.0000 ADVERTISING AGENCIES, COMMERCIAL ARTISTS AND DESIGNERS—Regulation 1540
(d) PROPERTY TRANSFERRED OR USED
100.0328 Cutouts. Tax applies to an advertising agency's charge for cutouts. Cutouts are a type of special order merchandise produced to the order of the advertising customer. While possession of the cutout is retained by the advertising agency, it has been concluded that they are used solely for the benefit of the advertising customer and are sold within the meaning of section 6006(f). The utilization of the cutout on behalf of the customer is considered to be comparable to drawings, lettering, special assemblies, etc., produced for clients by advertising agencies in the course of providing advertising services. Such items are classified as sales under Regulation 1540(b). Cutouts are distinguishable from sign copy because cutouts are painted and displayed on reusable panels owned and retained by the advertising agency. 8/11/71.