Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
120.0000 AUTOMATIC DATA PROCESSING SERVICES AND EQUIPMENT—Regulation 1502
(b) PROCESSING CUSTOMER-FURNISHED INFORMATION
120.2000 Magnetic Storage Media Transferred. When a word processing service records a customer's manuscript on customer-supplied data processing media or taxpayer-supplied data processing media, tax applies to the charge when the data processing media is transferred to the customer. If the word processing service also transfers a reading copy (printed copy) of the manuscript along with the media and the customer is charged a lump-sum price, tax applies to 50% of the amount charged which represents the charge for the media.
The encoding of the manuscript on data processing media is similar in concept to the keyboarding services involved in the case of Intellidata, Inc. v. State Board of Equalization, 139 Cal.App.3d 594. While the typing of a manuscript is a service, the furnishing of the encoded media is the sale of tangible personal property. Since an equal amount of effort had gone into the two objects of the contract, a 50% apportionment is appropriate. 8/26/86.