Idaho Administrative Code › Title IDAPA 35 - Tax Commission, State › Rule 35.01.02 - IDAHO SALES AND USE TAX ADMINISTRATIVE RULES › Section 35.01.02.055 - PERSONS ENGAGED IN ADVERTISING

Current through August 31, 2023
Sections
				63-3612,
				63-3613,
				63-3621,
				63-3622, Idaho Code
01.
In General
. Advertising
			 agencies, television stations, radio stations, graphic artists, and other
			 persons engaged in advertising may be engaged in either the rendering of
			 professional services or the sale of tangible personal property or both. When
			 such persons are engaged in the sale of tangible personal property, they are
			 retailers and are required to collect and remit sales tax on the property sold.
			 When such persons are engaged in the rendering of professional services, no
			 sales tax applies to the service. Whether the sale is a sale of professional
			 services or of tangible personal property is determined by the object of the
			 transaction, i.e., is the object sought by the buyer the service per se or the
			 tangible personal property produced by the service. Determining whether the
			 sale is a sale of professional services or of tangible personal property is a
			 question of fact is determined in view of all the facts and circumstances of
			 each transaction. (3-31-22)
02.
Advertising Agency as Agent of Client or as Non-Agent
. An agent is
			 one who represents another, called the principal, in dealings with third
			 persons. Advertising agencies may act as agents on behalf of their clients in
			 dealing with third persons or they may act on their own behalf. To the extent
			 advertising agencies act as agents of their clients in acquiring tangible
			 personal property, they are neither buyers of the property with respect to the
			 supplier nor sellers of the property with respect to their principals. To the
			 extent advertising agencies act on their own behalf in acquiring tangible
			 personal property they are buyers of the property with respect to the supplier.
			 Generally, they are sellers of any of the property so acquired which they
			 deliver to, or cause to be delivered to, their clients or to third parties for
			 the benefit of their client. They are also sellers of any of the property which
			 they retain but title to which they transfer to their client. (3-31-22)
a. Items acquired from outside sources. All
			 acquisitions by advertising agencies of tangible personal property are
			 purchases by the agencies on their own behalf for resale or use unless the
			 agency clearly establishes with respect to any acquisition that is acting as
			 agent for its client. (3-31-22)
b.
			 To establish that an acquisition was made as agent for its client the agency is
			 required to: (3-31-22)
i. Clearly disclose to
			 the supplier the name of the client for whom the agency is acting as agent;
			 (3-31-22)
ii. Obtain, prior to the
			 acquisition, and retain written evidence of agent status with the clients; and
			 (3-31-22)
iii. Clearly state on the
			 billing to its client that it is acting as agent for its client and that tax
			 has been paid to the supplier or use tax has been accrued by the agency on
			 behalf of the client. (3-31-22)
c. The agency fee billed to the client,
			 whether or not separately stated, is not taxable. The agency, in its records,
			 is required to retain evidence of the payment of the tax. The agency may make
			 no use of the property for its own account, such as charging the item to the
			 account of more than one client. An advertising agency purchasing tangible
			 personal property as an agent on behalf of its client may not issue a resale
			 certificate, as provided by Rule
			 128 of these rules, to the
			 supplier. It will be presumed that an advertising agency who issues a resale
			 certificate to its supplier is purchasing the tangible personal property on its
			 own behalf for resale and is not acting as an agent for its client.
			 (3-31-22)