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
515.0032 Copies of Original Report. A consulting firm in the broad field encompassing the development and management of natural resources contracts with clients to provide a written report detailing the results of its technical findings. In many contracts, the firm is required to supply clients with additional copies of the original report. The firm has been paying sales tax reimbursement to the printer.
Consulting firms are generally engaged in a service enterprise and are the consumers of the property which they use incidentally in rendering this service. This is so even though the property is transferred to their clients in the form of a written report. However, when these firms supply additional copies of the reports, they are regarded as the retailer of these additional reports. Accordingly, the firm should take out a seller's permit and collect tax measured by the selling price of the reports that are delivered and used in California. Of course, the retailer can, in such a case, issue a resale certificate to the printer for the charge the printer makes for the additional copies. It should be noted that the resale certificate only covers the actual cost of printing the extra copies and not any charges made for setting type, etc., which is attributable to the original printed report. 3/21/73.