Nev. Admin. Code § 372.227 — 372.227

NAC 372.227    Designers. ( NRS
360.090 , 372.725 )
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)