A taxpayer’s petition to the New York Commissioner of Taxation and Finance raised the issue of whether or not its charges for graphic design and design services are subject to sales tax. It was determined that for final graphic designs delivered to a client or designated outside vendor electronically, the charges to the client are for the sale of intangible property, and thus not subject to sales tax. However, if final designs are delivered on a computer disc the charges are subject to sales tax, including design costs and reimbursable expenses, because the company is selling tangible personal property – regardless of whether or not they are separately stated. Collection of sales tax is not required if the disk is delivered outside New York for use outside New York. Furthermore, the company’s receipts from the sale of logos delivered electronically to a printer to imprint the logo on stationery are not subject to sales tax. If however, the company has been contracted to provide its client with printed material or printing services, the receipts are subject to tax if the property is delivered to the client in the state of New York. Moreover, if the company is contracted to provide the imprinted stationery to the client without a separate contract for the creation of and sale to the client of the logo used by the company in producing the stationery or in providing the printing service, the entire charge to the client for the property or services delivered in New York is taxable. On the other hand, if the company is contracted by the client to create the logo separate from the contract to provide the printed material or printing services, the separate charges for the sale of the logo may be exempt, provided the logo is delivered electronically and the charge is reasonable in relation to its value. (TSB-A-06(32)S, New York Commissioner of Taxation and Finance, December 29, 2006)