Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
430.0000 PRINTING AND RELATED ARTS—Regulation 1541
(a) IN GENERAL—ACTIVITIES CONSIDERED SERVICES OR SALES.
(1) The customer provides the basic material that is to be set up. The taxpayer creates the set up on a computer which creates a floppy disc. (2) This disc is then put into a computer typesetter which transfers the material onto sensitized paper.
(3) The sensitized paper is developed just like photography film and a developed print is provided.
(4) The developed print plus two copies (ordered by the customer) is sent to the customer for editing and/or any other corrections.
(5) After the editing and correction, the print is returned to the taxpayer to obtain the final print. This could result in the repeat of steps one through four.
(6) The customer only wants the final copy because it is used to make the camera ready copy to be used for reproduction purposes.
(7) In addition to the final print, the customer orders and gets two copies of the print. These two copies are for layout and mock-up purposes by the customer's art department and editorial director.
In this situation, the final print is the direct product of the type composition service. The two copies furnished to the customer in step four for editing and correcting to produce the final print are furnished incidental to the type composition service. Tax does not apply to the taxpayer's charge for the type composition or the copies incidentally furnished.
However, the copies provided in step seven for use in layout and mock-up purposes are not incidental to the type composition service. Accordingly, tax applies to the charge for such copies. 9/20/83.