Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501
(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE
515.0005.800 Design. An individual is hired by firms for ideas in determining how their products should look, feel, and sometimes function. A large part of the operation pertains to appearance and characteristics. The ideas are usually conveyed through sketches, renderings, or drawings. Sometimes a three dimensional study model is used to accurately and fully convey the true final color, finish, texture, feel, or tactile quality of the concept.
Based upon the description of this business, the individual is a commercial artist or designer, not a design consultant providing a service. Although services are almost always necessary in the creation and manufacture of items of tangible personal property which will be sold, the described contract is for the transfer of tangible personal property for consideration rather than a contract for services. 2/13/91.