Were charges taxable for hand lettering names and dates on certificates, awards, and similar documents furnished by customers?

Plain-English summary

A business added names and dates by hand to certificates, awards, and similar documents supplied by customers. The letter compared the work to an engraver inscribing names and dates on trophies.

The Board treated lettering as artwork under Regulation 1540(a)(2)(A), making the hand-lettering charges taxable. It said charges for engraving names and dates on new trophies and awards would likewise be taxable.

The source acknowledged that some earlier opinions had excluded hand lettering from tax, but said the Board's position had been firm since at least 1968 that lettering was taxable artwork.

Citations and references

• California Sales and Use Tax Regulation 1540(a)(2)(A) (as cited)

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/435-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/435-0885.pdf

Original ruling text

435.0885

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
(916) 445-2641

September 16, 1975

Mr. I--- M. H--P--- D--- S--XXXX “---” ---, Suite X
---, CA XXXXX
Dear Mr. H---:
SR -- XX XXXXXX
This is in response to your letter of August 18, 1975. You have sought our opinion as to whether a certain portion of your business is or is not subject to the sales tax. The portion in question consists of hand lettering names and dates on documents provided to you by your customers. These documents are generally certificates or awards such as wedding or birth certificates, certificates awarded for achievement, etc. They are similar in nature to trophies awarded, and the work on them similar to engraver’s handwork in inscribing the names and dates thereon. You state that a ruling received in 1964 by a firm by which you were then employed excluded tax on these items. Recently you have been advised by our district office that work of this type is taxable. We are of the opinion that tax applies to charges for hand lettering. Our Regulation 1540, “Advertising Agencies, Commercial Artists and Designers,” provides, in paragraph (a)(2)(A), that tax applies to charges for artwork. Lettering is regarded as an art form. It has been our position since at least 1968 that inscribing names of high school graduates on diplomas constitutes a taxable sale. It appears that some opinions were issued in earlier years to the effect that charges for hand lettering were not subject to tax. Our position has been firm, however, since at least 1968 that lettering constitutes artwork and that charges for hand lettering are subject to the sales tax. We note that tax would likewise apply to charges made by an engraver for engraving names and dates on new trophies and awards. Very truly yours,

Glenn L. Rigby
Tax Counsel
GLR:GJJ:AT