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Business Taxes Law Guide—Revision 2024

Sales and Use Tax Annotations


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S


515.0000 Service Enterprises Generally—Regulation 1501

Annotation 515.0005.900

(a) In General—Service Distinguished from Sale


515.0005.900 Design of Case. A firm contracted to design and engineer a case to hold collectibles. It charged $500 for "concept configuration," $975 for "component engineering," and $25 for blueprints. Concept configuration involved evaluating the problem, gathering data, and solving problems imposed by constraints such as size, appearance, cost, and manufacturability. "Concept engineering" involves selecting materials, discussions with toolmakers, calculations, and the production of blueprints to allow transmittal of design.

The contract is a service contract. Tax applies only to the charge for duplicate blueprints. 6/21/91.