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BTLG Table of Contents > Sales and Use Tax Annotations > A > 100.0000 Advertising Agencies, Commercial Artists And Designers > Annotation 100.0304

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A

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100.0000 Advertising Agencies, Commercial Artists and Designers—Regulation 1540

Annotation 100.0304

(d) Property Transferred or Used

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100.0304 Artwork. When an ad agency develops artwork for a client that will be used in reproducing the image on the packaging of software which is to be resold, the sale of the artwork is subject to sales tax. (Regulation 1540(a)(7).)

On the other hand, when the ad agency only prepares the artwork for its own use and contracts with the client only to sell the packaging, the total charge for the sale of the packaging to the client is exempt as a sale of a nonreturnable container. (Regulation 1589(b)(1)(A).) 5/27/93. (Am. 2005–2).