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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
S
515.0000 Service Enterprises Generally—Regulation 1501
Annotation 515.0001.875
(a) In General—Service Distinguished from Sale
515.0001.875 Automated Drafting Services. A company develops for its customer a complete symbology for piping and instrumentation diagrams for nuclear power plants. The resulting drawings are produced by a computer automated layout program. Furthermore, in the case of producing logic diagrams, the company inputs logic equations. The interrelationship of the elements and the use of its programs produce finished logic diagram drawings.
From the above description, the company is providing more than an automated drafting service. The customer is seeking actual engineering designs, computations, and specifications. The company exercises independent professional judgment in dictating the ideas and designs which are expressed in the drawings furnished to the customer. Therefore, the company is providing a nontaxable service in the case cited above and it is the consumer of the tangible personal property which it utilizes in rendering such services. To the extent that the company performs only automated drafting services, it is making sales of tangible personal property and item sales are subject to the tax. 4/16/75.