FACTS: Banner Company, a photography studio, is commissioned to take pictures at weddings. The film is then sent to an independent lab for processing into photographs for sale to members of the wedding party. The negatives will not be reused. The independent lab is an industrial plant within the meaning of G.L. c. 64H, § 6(r).

ISSUE: Is Banner's purchase of the film which is then sent to the independent lab for processing into photographs for sale exempt from sales tax under G.L. c. 64H, § 6(r)?

DISCUSSION: Section 6(r) exempts from sales tax materials consumed and used directly and exclusively in an industrial plant in the actual manufacture of tangible personal property to be sold. Since the film is processed in an industrial plant into photographs for sale, the exemption applies. See DOR-D 88-9. The industrial plant need not be owned or operated by the actual purchaser of the material. Houghton Mifflin Co. v. State Tax Commission, 373 Mass. 772, 777 (1977).

DIRECTIVE: Since the film is processed in an industrial plant into photographs for sale, Banner's purchase of the film is exempt from sales tax even though Banner does not own or operate the plant.

REFERENCE: G.L. c. 64H, § 6(r); Houghton Mifflin Co. v. State Tax Commission, 373 Mass. 772 (1977); DOR-D 88-9.

/s/Stephen W. Kidde
Stephen W. Kidder
Commissioner of Revenue

September 30, 1988

DD 88-10

This Directive represents the official position of the Department of Revenue on the application of the law to the facts as stated. The Department and its personnel will follow this Directive, and taxpayers may rely upon it, unless it is revoked or modified pursuant to 830 CMR 62C.01(5)(e). In applying this Directive, however, the effect of subsequent legislation, regulations, court decisions, Directives, and TIRs must be considered, and Department personnel and taxpayers may rely upon this Directive only if the facts, circumstances and issues presented in other cases are substantially the same as those set forth in this Directive.