ARSD § 64:06:02:03 — Advertising

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64:06:02:03. Advertising . Advertising services are the
business of preparing advertisements for publication in newspapers, magazines,
placemats, billboards, or handbills or for broadcast and welcoming services
which contact new residents and others to explain business services within the
area and leave promotional literature.
Charges for advertising in newspapers
or magazines are not taxable. Likewise, charges made by advertising agencies
for preparing and placing advertising in advertising media are charges for
services and therefore not taxable.
Services purchased by the agency to
assist it in completing a project for a current customer are not subject to tax
if the service is an integral and inseparable component of the ultimate service
to its customer and the agency provides the service provider with an exemption
certificate. Examples of services that may be considered for resale if they are
an integral and inseparable part of the final product are art work,
proofreading, copywriting, handlettering, photo finishing, modeling,
photography, production studio rental, photo studio rental, video studio
rental, audio studio rental, prop rental, music rights, sound effects, dubbing,
typesetting, color separation, keylining, illustration, retouching, air brushing,
silk screening, and editing.
Sales tax applies to gross receipts
from sales of tangible personal property and any product transferred
electronically to persons providing advertising services for use and
consumption in preparing advertisements. Tax applies to the following: paper,
ink, paint, tools, office supplies, type, and charges by printers for
production of pamphlets, booklets, brochures, and other material printed by
them.