Laws, Regulations and Annotations


Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations

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120.0000 Automatic Data Processing Services and Equipment—Regulation 1502

Annotation 120.0055

(a) In General

120.0055 Computer Tutorials or Promotional Programs. A taxpayer prepares educational or promotional tutorials on electronic media for operation on a computer. No other tangible personal property is transferred. The taxpayer contracts for the "graphic art" to be included in the tutorial. The "graphic art" may include the production of preliminary art, finished art, consultation and research, supervision, motion picture production, photography and videotaping.

The charges to the taxpayer for the graphic art are subject to tax. The graphic artist may avail itself to the exclusion for preliminary art provided the criteria in Regulation 1540 are followed.

A motion picture is not "graphic art" as contemplated by Regulation 1540. A transfer of a "qualified motion picture" to the person for use in producing a computer program, is not subject to tax; rather the person producing the "qualified motion picture" is the consumer. 1/27/92.