Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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S

515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501

Annotation 515.0013.850

(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE

515.0013.850 Sale of Educational Programming to Schools. A nonprofit corporation sells educational programming services to school districts. These services feature science and language art curriculum which are broadcast nationwide via satellite with an interactive communications network linking students and teachers. The company charges a lump-sum school site annual license fee of $2,500 per curriculum. Also included with the site license fee are curriculum support available through 800 telephone numbers, one set of student magazines (30 magazines per set), one teacher resource guide, one basic science kit and/or literature starter set, and one video tape regarding parental involvement in education.

In this situation, there appears to be substantial value in instruction provided through the language, science, and professional development broadcast video series. Therefore, tax does not apply to the portion of the company's charge attributable to the broadcast services and curriculum support available through an 800 telephone number. However, sales tax does apply to the fair retail selling price of the student magazines, the teacher resource guide, the science kit or literature starter set, and the videotape. (See Annotation 295.0140.) 3/18/96.