Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501
(e) MISCELLANEOUS ACTIVITIES
(1) Selection of a demographically based list of possible credit candidates.
(2) The firm and the client develop a set of appropriate credit criteria.
(3) A list of potential candidates is sent to the firm by the client.
(4) The firm prepares an individualized computer program and evaluates the names based upon the credit criteria developed in (2) above.
(5) A list of those who meet the criteria is developed.
(6) The list is sent to the client or its designee for use in solicitation. In developing a list, two magnetic tapes are prepared: one with those persons who meet the credit criteria and one which contains the names of the persons who did not meet the credit criteria.
The transfer of the magnetic tape to the client is incidental to the service performed by the firm. Tax applies to the sale of the tape to the firm and the charge to the client is a nontaxable service. This is because the firm extracted information from an existing data base to the special order of its client and did not merely repeatedly sell data base information. 4/20/88; 7/26/94.