City and County of Denver, Colorado

TAX GUIDE

Topic No. 53

MADE-TO-ORDER ITEMS - WORKS OF ART

 

The full purchase price of articles sold after manufacturing or after having been made-to-order are taxable. The purchase price is the gross value of all materials, labor, service, and profit included in the price charged to the user or consumer.

 

Tangible personal property specifically produced by an artist on commission, as an exclusive item, is considered a work of art and not subject to sales tax because the artist is selling his/her service, not a manufactured item of tangible personal property. However, the artist is subject to the payment of sales/use tax on the materials necessary in the creation of the work of art which was contracted or commissioned. NOTE: Any subsequent sale of the original work of art or copies of that work of art are sales of tangible personal property and are subject to sales tax.

 

EXAMPLE

 

XYZ Company, a public relations firm located in Denver, commissions a Denver artist to draw a portrait of a star football player. XYZ will have 5000 copies made to be sold to fans as posters. The artist owes sales/use tax on the materials consumed in performance of his commissioned work of art but does not charge XYZ sales tax on the original portrait. However, XYZ is required to collect sales tax on the retail price of the posters sold and delivered in Denver.

 

 

* DRMC Section 53-25(1). Imposition of tax.

* DRMC Section 53-37(b). Application to manufacturers of tangible personal property.

* DRMC Section 53-96(1). Imposition of tax.

* DRMC Section 53-106(b). Application to manufacturers of tangible personal property.

 

 

 

THE ABOVE INFORMATION IS A SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT DENVER TAX LAW FOR THIS INDUSTRY OR BUSINESS SEGMENT. IT IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF THE DRMC AND APPLICABLE RULES AND REGULATIONS.

 

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