96-113
Response
July 18, 1996
Request
XXXXX
Utah
Tax Commission
210
N 1950 W
Salt
Lake City, UT 84134
Dear
XXXXX
We
would like to request an advisory opinion regarding a taxpayer’s responsibility
for collecting and remitting sales or use tax in the state of Utah. The
taxpayer’s activities within Utah consist of selling advertising on golf course
benches and tee markers. The benches and tee markers are owned by the taxpayer
and are provided to the golf course in exchange for the golf course permitting
the taxpayer to sell advertising to be affixed to the benches and tee markers.
No tangible personal property is exchanged between the taxpayer and the golf
course or the tax payer and the advertiser.
We
appreciate your consideration of this matter and thank you in advance for your
assistance.
If
you should require additional information, please do not hesitate to contact me
at XXXXX.
Very
Truly Yours,
XXXXX
XXXXX
Advisory
Opinion - Application of Sales Tax to Sales of Advertising Space.
Dear
XXXXX
We have received your request for an
opinion as to the taxability of your client’s sale of advertising space on
benches and tee markers on golf courses.
As we understand the facts, your client owns benches and tee
markers. Your client enters an
agreement with a golf course to place these items on the course at no charge to
the golf course. In exchange, your
client sells advertising space on these items to third parties. On the basis of those facts we find as
follows:
No taxable transaction occurs
between your client and the golf course.
Additionally, under Utah Administrative Rule R865-19S-65, the sale of
advertising space is not subject to tax, nor are charges for preparing and
placing the advertising media taxable.
Therefore, the transaction between your client and the third party
advertiser are not taxable.
Of course, your client must pay
sales tax on his purchase of the benches or on the materials used to make the
benches if he constructs them himself.
Additionally, if your client produces the artwork, he must pay sales tax
on items that he purchases and consumes to produce the artwork.
Please let us know if you have other
questions.
For the
Commission,
Alice
Shearer,
Commissioner