Opinion
45383.
ARGUED JUNE 8, 1970.
DECIDED JULY 1, 1970. REHEARING DENIED JULY 16, 1970.
Sales tax. Fulton Superior Court. Before Judge Tanksley.
Arthur K. Bolton, Attorney General, Harold N. Hill, Jr., Executive Assistant Attorney General, William L. Harper, Assistant Attorney General, Timothy J. Sweeney, Deputy Assistant Attorney General, for appellant.
Gaines C. Granade, for appellee.
Alston, Miller Gaines, Robert L. Dodd, Jr., Francis Shackelford, amicus curiae.
Where the stipulation of fact shows that the items sought to be taxed as tangible personal property — architectural renderings and scale models — constitute personal service transactions in which the skilled service in the preparation thereof is purchased more than the inconsequential elements for which no separate charges are made, the same is exempt by the Georgia Retailers and Consumers Sales and Use Tax Act, as amended.
ARGUED JUNE 8, 1970 — DECIDED JULY 1, 1970 — REHEARING DENIED JULY 16, 1970 — CERT. APPLIED FOR.
This is an appeal by the Revenue Commissioner from the granting of the statutory appeal to the superior court as to an assessment of the State Revenue Commissioner for alleged sales taxes on the transfers of architectural renderings and scale models of the appellee. Appellee is engaged in the business of supplying personal and professional service to the architectural trade primarily by the taking of particular ideas or concepts of the architectural clients and similar businesses, and transforming these ideas, notes and blueprints into drawings or dimensional visualizations by the making of miniature models. The appellee claims that there are no sales taxes due on the transfer of these models and renderings because Section 3, Par. (c), 2(a) of the Georgia Retailers' and Consumers' Sales and Use Tax Act as amended (Ga. L. 1951, pp. 360, 365; 1953, pp. 182, 183; Code Ann. § 92-3403a C (2) (a)) expressly exempts "professional, insurance, or personal service transactions which involve sales as inconsequential elements for which no separate charges are made," and that the appellee herein is subject to the above stated exemption. The lower court held the assessment to be erroneous. The ruling was based on the parties' stipulation of fact in the case.
The stipulation discloses that neither the appellee nor any of his employees is required by law to be an architect or professional engineer in order to carry on this business, but they must have architectural and professional engineering training in order to perform the work in producing the renderings and scale models. The renderings are "pictorial reproduction(s)" and "multi-color graphic representations," drawn to scale "to project a three-dimensional view" of structures. The scale models are reproductions usually of the outside view of a building or structure "constructed to scale, colored to show the intended or actual color of the structure and mounted on a paper board." Architects, real estate developers and advertising agencies use the renderings and models, not in the construction of buildings or landscaping of the surrounding land, but for display, public zoning hearings, promotions, and to sell the architects' services or promote the designs, developments and projects of the purchasers. The material components of the renderings and models represent 3% to 4% of the total price charged, the balance charged being for overhead and labor. The labor and overhead are not broken down, but other parts of the stipulation would lead one to believe that the customer is paying considerably more for the professional skill than for the materials, labor and overhead involved in the production. It is also apparent that the architect and others could, if the service were not available, produce or would be required to produce the same themselves, and there would be no tax due except the taxes now charged and paid for the component parts.
Clearly, the language "personal service transactions which involve sales as inconsequential elements for which no separate charges are made" fits this case like a glove. The dental laboratory makes false teeth, bridges, and repairs crowns for the dentist, yet the dentist's charge is for services and the labor is incidental. The shoemaker uses leather, dye, thread, soles, heels and nails, etc., in repairing shoes. The hairdresser, barber and masseur use hair spray, tonic, shaving lotion, perfumes and oils in performing their services. The laundry starches, presses and places the laundry in attractive boxes or bags. The lawyer, if he is unable to afford private stenographic help, prepares his briefs, letters, and legal research for his clients by employing an independent secretarial service. Similarly, the orthopedic doctor may have the hospital or brace-maker prepare braces, artificial limbs, etc., for fitting. Practically all of these involve control by the professional, just as the case sub judice. Clearly, under the law, the finished product is a personal service transaction which involves a sale as an "inconsequential element" for which no separate charge is made. See Craig-Tourial Leather Co. v. Reynolds, 87 Ga. App. 360 ( 73 S.E.2d 749); Superior Type, Inc. v. Williams, 98 Ga. App. 89, 93 ( 105 S.E.2d 14). Compare Undercofler v. Whiteway Neon Ad, Inc., 114 Ga. App. 644 ( 152 S.E.2d 616). In the Superior Type case above, we find at page 93 the following language quoted from an Illinois case: "We can perceive no logical difference between the paper upon which a photostatic copy of something is made or a blueprint produced, and that paper which a lawyer uses for writing a will or deed, a doctor for writing a prescription, or an abstractor for showing a chain of title. The paper is a mere incident; the skilled service is that which is required."
While the case sub judice is more than mere paper, yet the skilled service makes up the greater part of the charges made. The court did not err in holding the assessment to be erroneous.
Judgment affirmed. Hall, P. J., and Deen, J., concur.