Was a make-up artist's charge to a production company taxable when the artist applied make-up and expendable prosthetic appliances to performers?

Plain-English summary

A make-up artist applied make-up, beards, eyebrows, and prosthetic appliances to actors and other performers to alter their appearance for a role. The prosthetic appliances applied to the performers' skin were expendable and had to be replaced each day.

California treated the artist's work as a service because the true object was applying the make-up and prosthetics, not selling the transferred materials. The artist's charge to the production company for that service was therefore not taxable.

The artist was the consumer of the materials used in providing the service. Tax applied when the artist bought the make-up and expendable prosthetic materials.

The legal staff also cautioned that an audit was already in progress. Its opinion addressed the supplied facts but did not resolve other issues that the audit might raise.

What this means for you

Make-up artists and production companies

Application of expendable make-up and prosthetics was treated as the service, while the artist's material purchases bore the tax.

Accountants and tax professionals

Separate application labor from sales or rentals of reusable property, and identify who consumes each material used on performers.

Common questions

Q: Was the artist's application charge taxable?

A: No, on the stated facts.

Q: Who owed tax on the make-up and expendable prosthetics?

A: The artist owed tax on purchasing the consumed materials.

Q: Did the opinion settle every issue in the ongoing audit?

A: No.

Citations and references

• California Revenue and Taxation Code § 6051
• California Sales and Use Tax Regulation 1501

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 515.1970
• Original supporting opinion: 515.1970 PDF

Original ruling text

515.1970

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
(916) 445-6450
August 25, 1987

Dear REDACTED TEXT,
Your August 14, 1987 letter to REDACTED TEXT has been referred to the legal staff for reply. You requested an opinion as to the application of sales tax to your charges to a motion picture production company for applying expendable make-up to actors, actresses and other performers. You sent the following definition of a make-up artist which was provided to you by the REDACTED TEXT the United States and Canada, Make-Up Artists and Hair Stylists Local 706: “The make-up artist applies make-up to actors, actresses and other performers to enhance or alter their appearing in accord with their roles. This includes application of all types of beards, chin pieces and eyebrows on live performers. The make-up artist makes up and applies prosthetic appliances and make-up designed to change such physical characteristics of performers as facial features, skin texture and body contours.” You noted that all prosthetic appliances which you apply to the skin of a performer are expendable, and you much replace them each day the same as the make-up which you use to cover the appliances. The California sales tax is imposed upon retailers for the privilege of selling tangible personal property at retail in this state. (Rev. & Tax. Code § 6051.) On the other hand, when the performance of a service is the true object of a contract, tax does not apply to the charge for the service even though some tangible personal property is transferred incidental to the performance of the service. (Sales and Use Tax Re. 1501.) Based on the job description you provided, we believe that make-up artists perform a service when applying make-up and expendable prosthetic appliances to actors, actresses and other performers. Accordingly, tax applies to the sale to you of the materials you consume in applying the expendable prosthetic appliances. Tax does not apply to your charge to the production company for your performance of the service in applying the make-up. It is the policy of the Board’s legal staff to not interfere with an audit which is in progress. Although we have given an opinion based on the facts you provided, there may be other issues in the audit which need resolution. We suggest that, if the audit staff issues a notice of determination with which you do not agree, you should petition for redetermination and request a preliminary hearing before a hearing office. Very truly yours, Ronald L. Dick Tax Counsel