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 515.0592

(c) ORIGINAL MANUSCRIPTS, PLANS, ETC.

515.0592 Pattern Sizing. A taxpayer entered into an oral agreement with a dress manufacturer to perform pattern sizing work at his home and was paid on the basis of hours of work expended on each particular job. The work (pattern sizing) involved the grading or transferring of an existing pattern into separate paper patterns of larger or smaller sizes. The patterns thus created are utilized by the customer as a guide in the process of manufacturing dresses of the size of the particular pattern.

In this case, it is quite apparent that the customer sought the tangible item, the pattern of various sizes, for use in its dress making business. Therefore, the contracts was for the production and delivery of tangible personal property and, thus, the charges for such are subject to sales tax.

Also, taxpayer would not be considered an employee since the essential elements of an employment relationship were not present, i.e., right to control and direct the details of the employee's work performance. The taxpayer performed the work in his home utilizing a sample pattern provided by the customer. This amounted to no more than general direction as to result desired and is not sufficient to establish that an employment relationship existed. 10/28/75. (Am. 2000–1).