TR 33: Printers and Printing

Printers selling printed matter are making taxable retail sales, provided that the purchaser does not resell the articles and uses, consumes or distributes them free of charge. The full purchase price of the printed matter is subject to sales tax. This includes materials, labor, supplies, overhead and profit. Labor and service charges, even if separately stated on the invoice, are taxable except where noted below.

If separately stated on the invoice, the services of typesetting and color separation, design and camera mechanicals performed by a printer or its subcontractor for a customer or another printer are not taxable. The purchase price or royalty paid for the use of the original artwork is taxable. However, the cost of the scan, velox or the process used to make an image usable for the printer is exempt from sales/use tax.

Generally, supplies and equipment used by printers in the printing process which do not become a component part of the printed product are subject to sales/use tax payable by the printer. This includes, but is not limited to, the following:

• blankets
• blanket conditioner
• blanket saver
• blanket wash
• blender solution
• *developer
• dies
• film
• film developing
• finisher
• fixer
• flash oil
• grease
• half tones
• isopropyl alcohol
• Kodak control strips
• paper stop
• photos/artwork
• plate cleaner
• plate finisher
• plate preserver
• plate saver
• press wash
• replenisher
• roller wash
• scratch remover
• tape
• **toner
• water ductor

*This does not include developer used in the Xerox copy process.
**This does not include the toner used in lazer printers.

Exempt purchases of tangible personal property for resale include, but are not limited to:

• Paper: paper stock on which the finished product is printed and delivered to the customer and wrapping materials for the finished products sold to customers
  
  
• Ink: printers ink, ink additives, and overprint varnishes
  
  
• Chemicals: anti-offset sprays, fountain etch solutions, gum solutions, and all component chemicals when used with the above materials
  
  
• Materials: padding compound, stitching wire and staples, and book binders tape
  
  
• Developer used in the Xerox copy process.
  
  

Printers performing services only are subject to the regulations governing service enterprises. (See TR40: "Service Enterprises" for detailed information.)

Printed matter which is partially printed, invoiced to the customer, but held in stock for further imprinting is taxable on the full price charged by the printer. Sales tax must be collected on the selling price of each part of the job.

For commercial printing of postal cards or stamped envelopes purchased from the United States Postal Service, the amount subject to tax does not include the amount of postage involved.

Examples:

1. A Boulder printer contracts with a customer to design and print an advertising brochure. The printer itemized the following on the invoice: design $250.00, typesetting $75.00, royalty paid for photo $150.00, labor $300.00 and materials $200.00. The design and typesetting are not subject to sales/use tax, but the other items are. Even if items are separately stated, the charges for materials, labor and royalties are subject to sales/use tax.
   
   
2. A Boulder printer purchases the following to be used in their printing business: paper, assorted ink colors, plate cleaner, plate finisher, press wash, and film. The printer must pay sales/use tax on all the items except the paper and ink, which will be resold to customers. All the other items are used by the printer in the printing process, but not resold to customers.
   
   
3. A Boulder printer designed and printed business cards for a customer. The order was for 10,000 cards to be printed with the company logo, address and central phone number. The cards are stored with the printer; and, as employees needed business cards, the printer pulls these cards from its stock and adds names, direct phone numbers and e-mail addresses. The first invoice is for $2,000.00: $250.00 design, $75.00 typesetting and $1,675.00 for the printing. The charge for adding each employee's name, phone number and e-mail address is $15.00 per 100 cards. Sales tax must be collected on the printing charge of $1,675.00 on the first invoice, but design and typesetting are not subject to sales/use tax. The charge for finishing the business cards is also subject to sales/use tax each time additional cards are sold.

Last Updated on Tuesday, 10 November 2009 13:01