Michael:
I asked my tax advisor about the "portraiture is a service" vs. "portraiture is a product" argument.
He came firmly down on the portait is a product side arguing that the client commissions us to produce an object, a portrait, and that portrait is a product and it is taxable as such. He said he came down that way because that is exactly how the State would interpret it. He said if I was only providing labor - like say I was the guy who came in to route the edges on your granite counter tops, then that is completely service based. But we provide an object to the customer and that seems to be subject to sales tax - at least it is here in Colorado.
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