Information Guide

Identifying Information:Advertising Agency Self-Audit Fact Sheet
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Advertising Agency Self-Audit Fact Sheet
Keywords:
Approval Date:01/26/2006


Body:
KANSAS DEPARTMENT OF REVENUE
AUDIT SERVICES
ADVERTISING AGENCY SELF-AUDIT FACT SHEET


Purchases by Advertising Agencies
The taxability of purchases of tangible personal property and labor services by Advertising Agency service
providers is summarized below. Sales tax should be paid to the vendor or accrued and paid directly to the
State of Kansas. A properly completed exemption certificate should be provided to your vendor for all
purchases made without sales tax.
Advertising as in newspapers, radio, television, etc.Exempt
Labor services on original construction of new building or facilityExempt
Professional services such as accounting or legal servicesExempt
Purchase or lease of real estate, insuranceExempt
Trash removal, cleaning services, plant watering and careExempt
Complimentary bottled water, soft drinks, coffee, creamer, sugar, cups and stir sticksTaxable
Cameras of any type, printers and other similar equipmentTaxable
Complimentary items such as pens and calendarsTaxable
Copiers, printers, and fax machinesTaxable
Furniture and fixtures, including but not limited to: desks, lamps, tables, chairs, shelving, plants, planters, artwork, signsTaxable
Parts and labor services of repairing, servicing, altering or maintaining tangible personal property, such as computers, printers, copiers, security equipment, etc.Taxable
Laptop and desktop computersTaxable
Lease or rental of any tangible personal property - copier, fax, vehicleTaxable
Newspaper and magazine subscriptions, reference books and materials, forms, printed matter (including promotional brochures, etc.), business cards, notepadsTaxable
Office equipment and suppliesTaxable
Office utilitiesTaxable
Repair and remodeling labor services to real estateTaxable
Security cameras and other security equipmentTaxable
Software and software upgrades and labor services to modify, alter, update or maintain software Taxable
Warranty or service agreements for tangible personal property such as, computers, printers, copiers, security equipment, etc.Taxable
Customized software, software upgrades and labor services to modify, alter, update or maintain customized software - "customized" software = software originally developed for a single end userTaxable on and after July 1, 2002 through December 31, 2004 - Exempt all other periods
Licensing fees, registration fees, or continuing education feesExempt
Promotional items including but not limited to calendars, mugs and articles of clothingTaxable
Sales by Advertising Agencies:
The taxability of sales of tangible personal property and labor services by Advertising Agency service providers
is summarized below. The applicable sales tax must be collected unless the purchasers provides a proper
exemption certificate.
Advertising - Media charges for space or time purchased on behalf of clientsExempt
Art Direction - Supervision of work-in-processExempt
Consulting - One-to-one and group client discussionsExempt
Copy Editing - Editing, revising, proofing text given to you by a clientExempt
Copy Writing - Writing original test brochures, ads, press releases, scripts, etc.Exempt
Design - Creating visual images of graphic ideas for client approvalExempt
Illustration - Producing finished visual images or graphics Taxable
Keyline - Producing camera-ready artwork for printers to useTaxable
Photography - Taking photographs, developing film, printing photosTaxable
Printing - Printed brochures, instructional and trade show materials, flyers, etc.Taxable
Typesetting - Producing type galleys to be used in camera-ready keylines for printersTaxable
Videography - Taping and editing programs on videotape for clients (Multiple copies being sold)Taxable
Videography - Taping and editing programs on videotape for clients (Only one copy sold for use in
media advertising)Exempt
Labor services on real property: (Note: To calculate the taxable portion of a job use the following
formula; Gross sales, less Subcontractors, less taxed job materials = total labor)
Total labor for improvement to real property at residenceExempt
Total labor for improvement to real property at commercial locationTaxable
Date Composed: 07/06/2006 Date Modified: 07/06/2006