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BTLG Table of Contents > Sales and Use Tax Annotations > A > 100.0000 Advertising Agencies, Commercial Artists And Designers > Annotation 100.0033

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100.0000 Advertising Agencies, Commercial Artists and Designers—Regulation 1540

Annotation 100.0033

(a) In General

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100.0033 Management Fee. An advertising agency entered into a contract to provide advertising materials. It was not designated as an agent of the client. The contract provided that the agency was to pay all bills incurred in the advertising program and the client was to reimburse it monthly for those costs plus the sum of $2800 which was designated as the monthly guaranteed compensation for the term agreement.

The agency was the retailer of the advertising material which it furnished under this contract. The $2800 "guaranteed compensation" was a part of its gross receipts. Therefore, it should be pro-rated between the sales of taxable tangible personal property and non-taxable sales (i.e., printed sales messages) in order to determine the appropriate measure of tax. 4/16/91.