17 NCAC 07B .0904. PUBLIC RELATIONS FIRMS

(a)  Public Relations Firm Rendering Professional Services: If a public relations firm is retained to plan and conduct a public relations program which requires it to conduct research, opinion polls and surveys, compile data, analyze all of the foregoing and present a written or oral report of its findings to its client, the charges for these services are not subject to sales or use tax.  The public relations firm shall pay the applicable statutory state and local sales or use tax on the cost price of any tangible personal property purchased for use in performing the aforementioned services.  If the client decides to pursue the plan or concept developed by the public relations firm and such action results in the development or acquisition of tangible personal property by the public relations firm for its use in carrying out the goals or objectives of the plan or concept, it is liable for paying the applicable statutory state and local sales or use tax on such purchases.

(b)  Public Relations Agency Making Retail Sales: If the plan or concept calls for the production, fabrication, purchase or acquisition of tangible personal property by the public relations firm which it sells and delivers to its client or sells to its client and delivers to others on behalf of its client, the public relations firm is making retail sales which are subject to sales or use tax on the sales price of such property.  Tax shall apply to the sales price of the property and shall include fees directly involved in the production of the property and those charges specifically associated with the fabrication, manufacture or delivery of the property, such as charges for commissions, supervision, research, transportation charges, postage, telephone and telegraph messages, copy, models' fees, stage props, printing, printing plates, film, positives, negatives, transparencies and color separations even though the firm may separately state such charges on the invoice rendered to the client and in the firm's records.

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. October 1, 1993;

Amended Eff. April 1, 2006.

Note

Note:  For Retainer and Consultation Fees: See 17 NCAC 7B .0901(c).