California's State Board of Equalization (BOE), voted, 5 to 0, on January 5, 2000 to approve regulatory changes that will give California graphic artists partial relief from taxes they say have been unfairly applied to their profession.

The new regulations for the first time recognize a conceptual component to graphic artists' work and exclude that portion from sales tax. The changes also limit sales tax on artists' royalties, and extend to graphic designers the same exemption enjoyed by architects when they design environmental signage.The regulations also address technological advances that have taken place in the graphics industry, excluding files transferred over the internet and website design from sales tax.

"This is a big step in the right direction," said Lloyd Dangle, Secretary Treasurer of the Graphic Artists Guild/ UAW local 3030.

"By looking at the way business is really done and applying tax accordingly, the Board has made it a lot easier for artists to understand their responsibility and comply properly."

Until now, the BOE has taxed services and copyrights licensed by graphic designers and illustrators as tangible products, while at the same time exempting identical work by writers, architects, and others. Confusion over tax rules unique only to California, has resulted in an epidemic of audits of artists and appeals before the Board.

Despite providing relief in certain areas, problems still exist, says Daniel Abraham, Attorney and Graphic Artists Guild/UAW Chair of Public Affairs:

"We applaud the BOE's work. But by continuing to deny the intangible nature of artists' copyrights, they are still in conflict with Federal Copyright Law. This is an issue The Guild will take up again before the California legislature in 2000."

The changes, focusing mainly on Regulation 1540, result from several months of discussion between theadvertising industry, the graphic arts industry, and staff of the BOE Planning Department. It alsofollows two unsuccessful tries by the Graphic Artists Guild/UAW and a coalition of other groups to pass taxreform bills in the California legislature.