Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2016
Sales and Use Tax Annotations
295.0000 GROSS RECEIPTS
(f) COSTS AND EXPENSES
295.1360 Label Designs. If an artist contracts to make and deliver a particular label, all costs of production are part of taxable gross receipts, regardless of how many labels are made and discarded before the one exactly meeting specifications is produced. On the other hand, if, before contracting to deliver a specific label and before customer becomes obligated to accept a particular item, a number of samples are produced for display and selection purposes, such charges are not taxable.
Upon entering into a contract for the production of the label selected by the customer all costs thereafter incurred in such production are not deductible from gross receipts paid or payable for such label. 6/10/53.