North Carolina Administrative Code › Title 17 - REVENUE › Chapter 07 - SALES AND USE TAX › Subchapter B - STATE SALES AND USE TAX › Section .0900 - ADVERTISING AND ADVERTISING AGENCIES: PUBLIC RELATIONS FIRMS › Section 07B .0902 - ADVERTISING ARTISTS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) Sales by Advertising Artists. -- Advertising
											  artists are retailers when they produce, cause to be produced, fabricate, purchase, or otherwise acquire
											  items, as the term item is defined in G.S. 105-164.3, that they sell at retail for any use or purpose
											  other than for resale. Items sold by advertising artists include catalogs, magazines, handbills, brochures,
											  programs, pamphlets, or similar printed materials; other tangible personal property such as signs, paintings,
											  portraits, negatives, photographs, vinyl wraps, certain digital property, or other tangible artistic
											  creations. Pursuant to G.S.
											  105-164.4, advertising artists making retail sales of items to users or
											  consumers shall collect, report, and remit sales and use tax on the sales price of such items.
The sales price to which the tax applies is the total amount for
													 which the item is sold including all charges for services rendered in the production, fabrication,
													 manufacture, installation, postage, telephone and electronic messages, copy, models' fees, stage props,
													 printing, printing plates, film, positives, negatives, transparencies, and color separations, even though the
													 artist may separately state the charges on the invoice or similar billing document given to the purchaser at
													 the time of sale.
(b) Purchases for Use in Rendering
											  Professional Services. -- Advertising artists are the users or consumers of the items purchased by them for
											  use in rendering professional services, regardless of whether the items are acquired in the name or account
											  of the artist or their client. Pursuant to
											  G.S.
											  105-164.4, purchases by advertising artists of items used in rendering
											  professional services are subject to sales and use tax on the purchase price of the item without any
											  deduction for the cost of the material used, labor or service costs, transportation charges, or other
											  expenses. Advertising artists that purchase taxable items sourced to this State from suppliers who do not
											  charge and remit the applicable sales tax shall remit the use tax, pursuant to
											  G.S.
											  105-164.6, due directly to the Department.
(c) Purchases for Resale. -- Pursuant to
											  G.S.
											  105-164.13, purchases by advertising artists of items for resale that
											  become a part of tangible personal property or certain digital property sold by the advertising artist at
											  retail or wholesale are exempt from sales or use tax when the purchases are supported by a completed
											  Certificate of Exemption in accordance with
											  17 NCAC 07B
											  .0106. The term "part of tangible personal property or certain digital property"
											  includes only those items that are incorporated into and become a part of property sold and does not include
											  those items that are merely used or consumed in its production. Purchases by advertising artists of items
											  used or consumed in the production of items for sale are subject to sales and use tax, pursuant to
											  G.S.
											  105-164.4.
Authority
													 G.S.
													 105-164.4;
													 105-164.6;
													 105-262; Article 39; Article 40; Article 42; Article 43;
													 Article 44;
Eff. February 1, 1976;
Amended Eff. April 1, 2006; October 1, 1993;
													 October 1, 1991; July 5, 1980.