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Ruling 90-54


This Ruling has been cited in Ruling 90-73 and obsoleted by PS 95(4)

As a result of the Department's issuance of Policy Statement 90-3, the printing industry raised certain additional issues. This ruling is intended to supplement Policy Statement 90-3.

1. Taxation of the Purchase of the Plate

The purchase of the raw materials which physically make up the plate as well as chemicals which are physically applied to the plate proper may be purchased exempt from tax. Chemicals and solutions that are not physically applied to the plate proper are not exempt.

The purchase of an imaged plate which is ready to be placed on the press is exempt as a tool having a direct effect upon the product being manufactured.

2. Press Items

You have asked for a confirmation that ink and certain chemicals used on the presses in the pressroom are materials used directly in the manufacturing process.

This is to confirm that ink, ink additives, spray powders, fountain solutions and additives, and cleaning solutions for plates, blankets and rollers used on the presses in the pressroom are used directly in the manufacturing process.

3. Resale Certificates

You have asked us to rule on the sales and use tax treatment of the purchase of color separations, typesetting, assembled mechanicals, and assembled lithographic films and flats by a printer from an outside vendor. You have further asked us to rule on the corresponding treatment of the material to produce those same items when produced by a printer preliminary to printing.

Pursuant to §12-426-20 of the Regulations of Connecticut State Agencies, printers are entitled to purchase "photoengravings, electotypes, lithographic negatives or plates, and similar items," on resale where,

the printer is required by his customer to furnish and use such property in the production of the finished product...whether the same shall be held for future delivery or otherwise, provided a charge for the same shall be included in the bill rendered to his customer.

Essentially, this provision allows the printer to purchase certain items on resale for use in the preparation of printed matter where the printer is required to furnish the item purchased to the customer. This regulation provides an exception to the normal rule that items purchased on resale may not be used or consumed.

In light of this limited exception it is hereby ruled that the purchase of:

  • color separations (the process of separating color into primary color components on negative or positive form);
  • typesetting (the process of producing typographical copy on film or photographic paper);
  • assembled mechanicals (the process of assembling typography and artwork on paper or boards); and
  • assembled lithographic films and flats (the process of assembling and placing film negatives on paper or other materials just preceding the plate)

from an outside vendor can be purchased on resale when the printer is required to furnish and use such property in the production of the finished product and provides a charge for such purchase on the bill rendered to the customer. By this ruling these purchases and these purchases only are deemed to be similar items to the specifically described items in Regulation 20.

Those printers who do purchase the above specified items on resale must include a separate line item charge on the invoice to the customer.

The provisions of Regulation 20 allowing the printer to purchase these items on resale relates solely to the purchase of the finished end product of another vendor. Regulation 20 does not apply to the production of these items by a printer preliminary to the production of printed matter. The exception pertains exclusively to items purchased by printers. As the regulation provides, the printer is regarded as the retailer of printed material. As such, the printer is not deemed to be retailing preliminary production items, although the same may be furnished to the customer. Any items furnished to the customer are incidental to the printer's sale of printed material. Therefore, it is hereby ruled that in producing color separations, typesetting, mechanicals and assembled lithographic films and flats a printer cannot purchase the materials to produce those items on resale.

4. Compliance Date of Policy Statement 90-3

The Department expects all printers to be in compliance with the above policy by July 1, 1990. In those cases where a printer has entered into a bona fide, binding contract for the purchase of materials and machinery, which contract is prior to July 1, 1990, the Department will allow pre-July 1 treatment for those purchases even though delivery may occur after July 1, 1990.

Please note that, except for the reference in item 4, the rulings herein deal solely with the purchase of materials and ingredients pursuant to §12-412(18) of the Connecticut General Statutes and not the purchase of machinery pursuant to §12-412-(34) C.G.S. Further, nothing contained herein shall pertain to whether a vendor supplying color separations etc. to a printer is deemed in any way to be a manufacturer of tangible property.

James F. Meehan

June 29, 1990