Ohio Administrative Code › Title 5703 - Department of Taxation › Chapter 5703-9 - Sales and Use Tax › Section 5703-9-41 - Person engaged in advertising field

Current through all regulations passed and filed through July 1, 2024
(A) A person engaged in the field of
			 advertising or in the preparation of advertising matter who sells tangible
			 personal property obtained from others or who produces tangible personal
			 property for transfer to another for a consideration is a vendor with respect
			 to such transactions. If the sales are retail sales the vendor
			 
								needs to
			 hold a vendor's license, collect the sales tax, file returns and remit the
			 tax.
(B) The production of tangible
			 personal property for the advertiser is a sale irrespective of whether the
			 material used in the production is supplied either directly or indirectly by
			 the advertiser or is obtained by the producer on his own behalf. The production
			 of items such as photographs, photostats, art work, plates, mats, printed
			 material, etc., for another for a consideration is a sale of such
			 items.
(C) The full amount charged
			 on the sale or production of tangible personal property is subject to the sales
			 tax even though a part of the charge may be billed as "service charge," "fee,"
			 or "commission." Where preliminary art has been prepared, the price or tax base
			 for the finished art work includes the amount attributable to the preliminary
			 art.
(D) A person purchasing
			 tangible personal property from others for the purpose of resale or for the
			 purpose of incorporating it into tangible personal property produced for sale
			 may purchase such property exempt from the sales or use tax. Exemption may also
			 be claimed on the purchase or use of tangible personal property used directly
			 in producing the property for sale.
(E) A person in the advertising field who
			 does not sell or produce tangible personal property, but who is engaged solely
			 in rendering service to others as a true agent, is not considered to be a
			 vendor with respect to such services. In determining whether such a person is
			 acting as a true agent, consideration should be given to the contract between
			 the parties, the conduct of the parties with respect to the property involved,
			 and the facts and circumstances of the transaction. A person who, for example,
			 operates under an agreement wherein the agency relationship is specifically set
			 forth and under which advertising is placed in selected media or tangible
			 personal property is purchased on behalf of, and in the name of, the principal,
			 would be considered a true agent. An agent purchasing for another must either
			 pay the sales tax or furnish a properly executed exemption certificate in the
			 name of, and on behalf of, the principal. In claiming exemption based upon the
			 use of the thing transferred the purpose of the principal, not the agent, is
			 the determining factor.
(F)
			 Transactions not involving the sale of tangible personal property or the
			 production of tangible personal property are considered to be the performance
			 of a service. Examples of such services are:
(1) Recommendations for advertising themes or
			 for merchandising plans;
(2) The
			 placing of advertising matter in advertising media;
(3) The purchase of space or time from
			 advertising media;
(4) The writing
			 of original manuscripts, news releases, copy for use by newspapers or other
			 publications or for broadcast on television or radio;
(5) The purchase of tangible personal
			 property as an agent of the advertiser; or
(6) The preparation of preliminary art
			 (roughs, visualizations, thumbnails) solely for the purpose of displaying the
			 advertising idea to the advertiser.