Final artwork, as defined for sales and use tax purposes, is property that is suitable for use in producing advertising materials. It can be in a tangible or digital form. Examples of final artwork include photographs, illustrations, drawings, paintings, calligraphy, and models. Final artwork does not include preliminary artwork or certain original sound recordings and video recordings. Final artwork is subject to sales and use tax, but only on the costs directly designated for the specific purpose of creating or making the final artwork, and excluding any fees paid for advertising services.
Reference: Letter Ruling 12-33. Tenn. Code Ann. § 67-6-102.