Did an artist and printer form a joint venture when they collaborated to create and sell lithographs?

Plain-English summary

An unidentified representative asked about the relationship between an artist and redacted printer X in creating lithographs and expressed the view that they formed a joint venture. The January 5 request reportedly contained a comprehensive, lengthy recital of their detailed activities, but the official opinion deliberately does not restate it. The underlying facts therefore are not independently available on this page.

Tax Counsel Joseph Manarolla explained that a joint venture required proof of community of interest, shared profits and losses, and some right by each participant to direct the others through a fiduciary relationship. It was a special combination without corporate or partnership designation, formed to pursue profit in a specific venture by combining property, money, effects, skill and knowledge.

On the omitted facts presented for what counsel called the normal procedure for creating the original prints, the required elements appeared present: community and joint proprietary interests in creating and selling prints, some right to direct or govern each party, shared profits and losses, and combined property, efforts, skill and knowledge in pursuit of profit. Counsel agreed with the requester that the relationship was a joint venture and copied district audit staff.

An appended answer to question 2 of a January 17 West Los Angeles memorandum said another relationship could be essentially the same if it retained the same sharing of proceeds and losses, required the artist's approval and signature, and in fact involved no sale of plates to the printer. The question, memorandum, arrangement and plate records are absent, so the exact comparison cannot be reconstructed.

The source supplies no contracts, ownership records, artwork, plates, cost and proceeds schedules, loss allocations, approval or signature records, sales, tax computation, audit adjustment or later outcome.

Source posture

The live 415.0093 annotation, in the 2026 revision of the Business Taxes Law Guide, preserves the artist-printer collaboration, joint-venture definition and elements, and joint-venture-rather-than-sale conclusion when the tests are met. It says the artist maintained there was no artwork sale to the printer; the supporting letter instead says the representative opined that the relationship was a joint venture, while the appended answer separately conditions another arrangement on no plate sale. The live page omits the absent comprehensive facts, normal procedure limitation, joint proprietary interest, combined efforts, district audit notice, January 17 memorandum, supplemental approval/signature/proceeds/losses/plates conditions, missing records and absent outcome.

CDTFA's Annotated Legal Opinions collection says the letters are summarized as annotations and that statutory law controls whenever a statute and annotation conflict. The official two-page 415.0093 PDF has a clean native text layer and one small page-1 stencil, so no OCR was required. It prints create and sill lithograph prints; that visible defect remains verbatim below. Both fresh direct PDF downloads and both live-annotation downloads were byte-identical, and duplicate default PDF text extractions matched. The original-text section below remains byte-identical to its committed version and matches the fresh official extraction after removing only the extractor's terminal newline and form feed.

What this means for you

Artists, printers, and tax professionals

Collaboration alone is not the full test. Document output and plate ownership, mutual direction, fiduciary duties, contributions, approvals, signatures, proceeds and losses. Because this official source omits the detailed facts that drove its conclusion, do not use it as a factual template for another artist-printer arrangement.

Common questions

Q: What elements did counsel use to identify a joint venture?

A: Community and joint proprietary interests, shared profits and losses, some mutual direction through a fiduciary relationship, and combined property, effort, skill and knowledge toward profit.

Q: Did counsel find a sale of the plates to the printer?

A: No transaction record is supplied. The appended answer said another arrangement could be essentially the same if, among other conditions, there was in fact no plate sale.

Q: Does every artist-printer collaboration qualify?

A: No. The opinion relied on detailed facts that it expressly declined to repeat, limiting the ability to compare another arrangement.

Q: Can the parties' detailed lithograph workflow be reconstructed from the source?

A: No. The January 5 factual recital, January 17 audit memorandum, contracts, plates and accounting records are absent.

Q: Does the source establish an audit or tax outcome?

A: No. It says district audit staff would be informed but supplies no adjustment, assessment, payment, petition or final outcome.

Citations and references

• 28 California Jurisprudence 2d, Joint Adventurers, sections 4-5
• January 5, 1972 request with comprehensive factual recital and West Los Angeles January 17 memorandum, question 2 — described but not reproduced
• Identities, contracts, artwork, plates, ownership, contributions, workflow, control, approvals, signatures, proceeds, losses, sales, tax computation, audit records and outcome — described or implicated but not included

Verbatim support

From the official February 17, 1972 Tax Counsel opinion:

We will not restate the informative but lengthy facts for the purpose of our reply.

It is our opinion that under the facts as presented, which is considered to be the “normal” procedure for creating the original prints, the elements necessary to establish a joint venture appear to be present.

There is a community of interest, a joint proprietary interest in the object of the undertaking, the creation and sale of prints; the facts disclose a right in some measure to direct or govern the conduct of each party and the sharing of profits and losses.

In answer to question 2 on West Los Angeles’ memo of January 17, 1972, we believe that if the same arrangements regarding the sharing of proceeds and losses, the required approval and signature of the artist is present, and there is in fact no sale of the plates to the printer the relationship could be considered as essentially the same.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 415.0093
• Original supporting opinion: 415.0093 PDF

Original ruling text

STATE OF CALIFORNIA

415.0093

STATE BOARD OF EQUALIZATION
February 17, 1972
Dear

This is in reply to your letter of January 5, 1972 regarding the relationship between the artist and your client X-------------, the printer, in the creation of certain lithographs. It is your expressed opinion that the relationship between the parties constitutes a joint venture. To establish the existence of a joint adventure there must be proof of a community of interest and a sharing of profits and losses. Moreover, each joint adventurer must have an equal right, or the right in some measure to direct the conduct of the others through a fiduciary relation that must exist (28 Cal. Jur. 2d Joint Adventurers §5). A joint adventure is defined as a special combination of two or more persons without a corporate or partnership designation, formed for the purpose of jointly seeking a profit in a specific venture, and for which purpose they combine their property, money, effects, skill and knowledge. (Supra §4.) We have reviewed your comprehensive recital of the facts describing the detailed activities of the parties in their performance of the stated objective to create and sill lithograph prints of the artistic endeavor of the artist through the “collaboration” of the artist and the printer. We will not restate the informative but lengthy facts for the purpose of our reply. We have reviewed the facts presented as they relate to and conform with the above-stated requirements of a joint venture relationship. It is our opinion that under the facts as presented, which is considered to be the “normal” procedure for creating the original prints, the elements necessary to establish a joint venture appear to be present. There is a community of interest, a joint proprietary interest in the object of the undertaking, the creation and sale of prints; the facts disclose a right in some measure to direct or govern the conduct of each party and the sharing of profits and losses. Detailed also by the facts is the combining of the property, efforts, skill and knowledge of the parties for the purpose of jointly seeking a profit. Accordingly, we concur in your opinion that the relationship between the parties constitutes a joint venture. The district audit staff will be informed of our conclusion in the matter by copy of this letter.

Very truly yours,
Joseph Manarolla
Tax Counsel
JM:lb
Bc:

Los Angeles Dist. – Dist. Admin.
W. Los Angeles – Subdist. Admin.
In answer to question 2 on West Los Angeles’ memo of January 17, 1972, we believe that if the same arrangements regarding the sharing of proceeds and losses, the required approval and signature of the artist is present, and there is in fact no sale of the plates to the printer the relationship could be considered as essentially the same.