Laws, Regulations and Annotations


Business Taxes Law Guide – Revision 2023

Sales and Use Tax Annotations

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120.0000 Automatic Data Processing Services and Equipment—Regulation 1502

Annotation 120.0023

(a) In General

120.0023 Computer Assisted Design (CAD) Services. A customer supplies drawings, blueprints, sketches, and written descriptions and, in return, receives a disk produced by the use of CAD software. The information on that disk is expressed mathematically rather than graphically. This constitutes the type of nontaxable service described in Regulation 1502(d)(5)(A) because the person furnishing the disk was required to manually edit, check, and/or otherwise prepare composite drawings, detail drawing, or layered drawings from the information supplied by the customer. The results are fundamentally different from copying, optical scanning, or blueprinting manual. Since the customer receives the information in the form of mathematical data, the customer can manipulate that data through the use of its own computer programs. The service remains nontaxable even if a pen plotted drawing was supplied together with the CAD data on the disk. 12/20/88.