Nevada Administrative Code › Chapter 372 - Sales and Use Taxes › APPLICATION OF TAX › Section 372.227 - Designers

Current through June 11, 2024
1. As used in this section, the term
			 "designer" means a graphic designer or a commercial artist and designer who is
			 primarily engaged in, and derives income from, providing stylized visual
			 communication through the professional application of creative services which
			 may be expressed in the form of graphic representations used for promotional,
			 advertising or publication purposes, including, without limitation, commercial
			 art and design for logos, stationery, advertisements, brochures, catalogs,
			 newsletters and magazines.
2.
			 Purchases of tangible personal property by designers are subject to the sales
			 tax if such property is acquired for use in the operation of the business. As
			 an example of the application of this subsection, if a designer purchases
			 office supplies, art supplies, computer equipment, computer software or other
			 devices for use in the normal course of business and not to be transferred in
			 the performance of a service, the designer is the consumer of the tangible
			 personal property and must therefore pay the sales tax at the time of
			 purchase.
3. In cases where a
			 contract, commonly referred to in the industry as an "assignment," for graphic
			 services is executed which requires the development of concepts and ideas, this
			 constitutes the sale of professional services and sales tax does not apply.
			 Drawings, visualizations and concept roughs which are prepared by the designer
			 to convey ideas and concepts to clients will be treated as having been created
			 incidentally in the performance of a service. As an example of the application
			 of this section, if a company places an order for a designer to provide a
			 corporate logo for use in promotional activities, the gross receipts from the
			 consultation, concept and development, preliminary designs and first rendering
			 of the final design are not subject to sales tax because the charge is for the
			 services provided in producing and developing the design and the transfer of
			 any tangible personal property is incidental to the performance of the services
			 provided in the development of the design.
4. If a designer, in addition to providing
			 creative services as described in subsection 3, also provides reproduction
			 services, the designer is a retailer of the copies that are sold and the gross
			 receipts derived therefrom are subject to the sales tax, except that, if a part
			 of the charge for the copies is for services associated with the creation of
			 the first rendering and that portion of the charge is separately stated on the
			 invoice, the portion of the charge that is attributable to services is not
			 subject to the sales tax. As an example of the application of this subsection,
			 if a company commissions the design of a corporate logo for promotional and
			 advertising activities, the cost of developing the first rendering of the final
			 design is not subject to the sales tax because the charge is for the services
			 provided in producing and developing the design and the transfer of any
			 tangible personal property is incidental to the performance of the service of
			 developing the design. In this example, if the company requires 10 additional
			 copies of the logo, the gross receipts from the sale of those copies are
			 subject to the sales tax.
5. The
			 sales tax does not apply to any charges for supervision, consultation,
			 research, postage, express, telephone and telegraph messages, transportation
			 and travel expenses, or talent fees, if the charge is stated separately on the
			 invoice or is part of a charge for other services.
Added to NAC by Tax
				Comm'n, eff. 11-12-93
NRS
				  360.090,
				  372.725