Finished artwork per Regulation 1540 has always been subject to tax when produced in any tangible form. Changes to Regulation 1502 provide an exemption for this artwork if transferred to customers on computer disks or tapes. Effectively, artwork, graphics, and designs are being treated exempt as custom computer programs when created to the special order of the customer. This is big news for any graphic artists. The change should be effective 12-8-99.
GREAT NEWS FOR HOLLYWOOD
Proposed Regulation 1532 partially exempts machinery and equipment used for post production purposes and any property used to provide teleproduction or other postproduction services that is mounted or installed in a vehicle. The exemption also applies to all repair and replacement parts with a useful life of one or more years. To exclude these items from 5% of the tax the seller must obtain an exemption certificate from the buyer. The Regulation lists the types of equipment that qualify and a reading of the Regulation is advised.
CRV NO LONGER TAXABLE?
Proposed Regulation 1589.5 exempts from tax the payment on a beverage container under the California Beverage Container and Litter Reduction Act. This has long been a sore spot for retail grocers and convenience store owners. Excluding the fee from tax will reduce state revenue of $28 million per year.
TEACHERS ALSO GET A BREAK
On a final note, in a recent Board of Equalization case the Members voted (3-2) to exempt from use tax books and other classroom materials. Sales and Use Tax department took the position that the book club who redeemed these points for books and materials should have collected use tax from the teachers based on the retail price that the merchandise would have otherwise been sold for. Board Members rejecting the staff’s position were Marcy Jo Mandel (Controller’s representative) Dean Andall, and Claude Parrish.
FINALLY – A TAXPAYER FRIENDLY MAJORITY
With all this good news it seems we now have a taxpayer friendly Board majority. This will be good for California businesses and California’s economy.
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