Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
120.0000 AUTOMATIC DATA PROCESSING SERVICES AND EQUIPMENT—Regulation 1502
(a) IN GENERAL
120.0105 Design of Circuit Board. A designer of printed circuit boards uses computer and computer aided design ("CAD") software to design the layout of electronic components on a printed circuit board ("PCB") from drawings provided by its customers. Information from the drawings and other reference materials is entered on the type, size and electronic characteristics of the circuit components onto the CAD software data base.
The software program is used to manipulate the data to generate the optimum design for the PCB. When completed, the design information is transferred to the customer:
(1) via a computer modem over telephone lines or in the form of computer data on a tape cartridge or floppy disk, and
(2) in the form of fabrication and assembly drawings on vellum.
The designer issues an invoice for the design and a separate charge for photoplots. No separate charge is made for tape cartridges, floppy disks or vellum. Given this information, tax does not apply to:
(1) charges for tangible representations of the design except where the drawings are suitable for use as camera-ready art, and
(2) the transfer of information by modem as this is not the transfer of tangible personal property.
However, tax does apply to:
(1) the sale of manufacturing aids used in the production of the PCB such as photoplots, and
(2) the sale of photoplots whether the designer develops the design or the customer develops the design even if the customer were to provide the material the designer uses to create the photoplots. 8/30/93.