830 CMR: DEPARTMENT OF REVENUE
830 CMR 64H.00 SALES AND USE TAX
830 CMR 64H.00 is hereby repealed and replaced with the following:
830 CMR 64H.6.2: Printing
830 CMR 64H.6.2: Printing
830 CMR: DEPARTMENT OF REVENUE
Table of Contents
(a) Statement of purpose. The purpose of 830 CMR 64H.6.2, is to explain the sales tax treatment of persons who for consideration are engaged in printing in the normal course of business.
(b) Outline of topics. 830 CMR 64H.6.2, is organized as follows:
3. Sales of Printed Materials.
4. Production Costs.
5. Mailing Costs.
8. Prepress Items.
9. Effective Date.
For the purpose of 830 CMR 64H.6.2, the following terms have the following meanings:
Prepress items, materials used prior to, but in connection with, the operation of a printing press, including a printing plate, composed type, film positives and negatives, photographs, artwork, flats, and reproduction proofs.
Printing, the process of reproducing a design or image on a surface that is the end product of the production process, including lithography, multilithing, multigraphy, photocopying, and laser printing.
Sales tax or tax, the sales tax imposed by M.G.L. c. 64H or, if the context permits, the use tax imposed under M.G.L. c. 64I.
(3) Sale of Printed Materials
A printer shall collect sales tax when it sells printed materials at retail. A sale at retail occurs when a printer sells printed matter such as cards, catalogues, invitations, books, letterhead or photocopies to its customer, who either uses or consumes this printed material, or distributes this material free of charge. A printer is not required to collect sales tax when it makes a sale for resale, i.e., the printer sells printed matter to its customer, who will resell that printed matter in the normal course of business. In these latter cases, the printer shall not be obligated to collect the sales tax on printed matter sold provided the printer accepts a resale certificate in good faith from its customer.
(4) Production Costs
When a printer charges its customer a fee for services that are a part of the production of printed matter, such as overtime, set up charges, embossing, or binding operations, the printer shall collect a sales tax on the total fee without any deduction for that part of the fee attributable to these services.
(5) Mailing Costs
(a) When a printer charges its customer for postage used in mailing materials purchased by its customer, it shall not collect a sales tax on the postage fee, provided the fee is stated separately on the invoice and in the printer's accounting records.
(b) When a printer provides the envelopes, either plain or printed with a logo type, return-address, self-address or any other type of imprint for the purpose of mailing, it shall collect a sales tax on the total fee charged for the envelopes.
In general, a printer shall collect sales tax on the retail sale of printed matter. However, a printer is not required to collect sales tax in either of the following two circumstances.
(a) A printer is not required to collect sales tax on the sale of printed matter that it is obligated by agreement to deliver to either a purchaser located outside the state or to a designee located outside the state of a purchaser located outside the state. For purposes of the preceding sentence, the term "deliver" includes a direct delivery by the printer and also a delivery effected through the use of an interstate carrier.
(b) A printer is not required to collect sales tax on the sale of printed matter that is manufactured in the state to the special order of a purchaser to the extent such matter is delivered to an interstate carrier, a mailing house or a United States post office for delivery or mailing to a purchaser located outside the state or to a purchaser's designee located outside the state.
Example 1. A printer receives an order from an out-of-state customer who requests that the printer deliver the purchased printed matter to a designee in the state. This transaction is subject to tax.
Example 2. A printer manufactures greeting cards to a customer's special order and mails these greeting cards to a list of persons designated by the customer, primarily outside the state. This transaction is not subject to tax to the extent that the persons to whom the greeting cards are mailed are located outside the state.
Example 3. An in-state customer purchases greeting cards from a printer that the printer does not manufacture to the customer's special order but rather pulls from its stock in trade. The printer mails these greeting cards to a list of persons designated by the customer, primarily outside the state. This transaction is subject to tax in its entirety.
A printer's purchase of machinery or equipment is exempt from sales tax if the operation, function or purpose of the item is an integral or essential part of a continuous production flow or process of manufacturing printed matter to be sold and the item is used exclusively for that purpose.
(a) Example 1. A printer purchases a machine that photoprocesses or engraves a blank printing plate that the printer will use exclusively, as part of a press run, to imprint printed pages to be sold. The purchase of the machine is exempt from sales tax even though it is used prior to the press run that actually manufactures the printed pages to be sold.
(b) Example 2. A printer purchases an integrated computer system that it will use exclusively to produce artwork and other prepress items that the printer will incorporate into or use to create printed matter to be sold. The purchase is exempt from sales tax even though the machine is used prior to the actual manufacture of the printed matter to be sold.
(8) Prepress Items
A printer's purchase of a prepress item is exempt from sales tax if the item is used exclusively as part of a continuous production flow or process of manufacturing printed matter to be sold.
(9) Effective Date
This regulation repeals and replaces the prior version of 830 CMR 64H.6.2.
830 CMR.64H.6.2(7) and (8) shall apply to transactions occurring on or after July 1, 2000.
830 CMR 64H.6.2: M.G.L. c. 14, § 6(1); M.G.L. c. 62C, §3
Date of Promulgation: 8/30/79
New Regulation Promulgated: 6/8/01