Missouri Code of State Regulations › Title 12 - DEPARTMENT OF REVENUE › Division 10 - Director of Revenue › Chapter 103 - Sales/Use Tax-Imposition of Tax › Section 12 CSR 10-103.610 - Sales of Advertising

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule explains, pursuant to section
				  144.034,
				  RSMo, when sales of advertising are sales of a service, which are not subject
				  to tax, and when such sales of advertising are sales of tangible personal
				  property, which are subject to tax.
(1) In general, if a sale of advertising
				involves the transfer of tangible personal property, it is a sale of tangible
				personal property subject to tax unless it is preliminary art or the sale is
				made by an exempt business. If the sale is made by an exempt business, the
				transaction is the sale of a service and is not subject to tax when the true
				object of the sale is the advertising. When the true object of a sale by an
				exempt business is tangible personal property, it is subject to tax.
(2) Definition of Terms.
(A) Advertising-the expression of an idea
				created and produced for reproduction and distribution in the media, such as
				television, radio, newspapers, newsletters, periodicals, trade journals,
				publications, books, other printed materials, magazines, standardized outdoor
				billboards, direct mail or point-of-sale (POS) displays, and which is designed
				to promote sales of a particular product or service or otherwise affect
				consumer behavior.
(B) Advertising
				agency-a business, not owned by an advertiser, which is directly responsible to
				an advertiser for and whose predominant functions as a business are the
				creation or supervision of the production and placement of advertising and
				advertising materials in the media.
(C) Broadcast station-a radio or television
				enterprise which engages in the collection, writing, production and
				dissemination of news, public affairs or entertainment by means of transmitting
				signals through space or wires intended for reception by the public on a
				receiving set.
(D) Exempt
				business-advertising agency, broadcast station, legal newspaper pursuant to
				Chapter 493, RSMo, or standardized outdoor billboard company exempt from the
				sales tax law pursuant to section
				144.034,
				RSMo.
(E) Finished art-the final
				art used in print advertising for actual reproduction by photochemical or other
				process, or the master tape or film and duplicate prints used in broadcast
				advertising.
(F) Preliminary
				art-art, film or tape prepared by a person engaged in the advertising business
				for the purpose of conveying or demonstrating an idea or concept for acceptance
				by a buyer before the final approval is given by a buyer for finished art or
				finished film or tape. Examples of preliminary art include, but are not limited
				to: roughs; visualizations; comprehensives; layouts; sketches; drawings;
				paintings; designs; story boards; rough cuts of film and tape; initial audio
				and visual tracks; work prints; and music or sound effects.
(G) Specialty advertising-items of tangible
				personal property on which advertising is placed but which have a use and value
				separate from the advertising. Such items include, but are not limited to: tee
				shirts, key chains, glassware, frisbees, rulers, pens, calendars, matchbooks,
				calculators, clocks, notebooks and pocket protectors.