Connecticut State Department of Revenue Services

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Ruling 90-73

Printers

This Ruling has been obsoleted by PS 95(4)

In issuing Ruling 90-54 pertaining to the printing industry, the Department ruled that printers could purchase tangible personal property such as color separations, typesetting, assembled mechanicals, and assembled lithographic films and flat from outside trade vendors on resale pursuant to 12-426-20 of the Regulations of Connecticut State Agencies.

The printing industry now requests that the Department clarify the sales and use tax treatment of the trade vendor's purchase of materials which become a component part of the products sold by the trade vendor. Specifically, the printing industry asks the Department to rule whether the purchase of materials such as film, paper and chemicals can be purchased tax free by the trade vendor either because:

  1. the materials are component parts of the final product and, therefore, can be purchased on resale, and or
  2. the materials are exempt as production materials under Section 12-412(18) of the Connecticut General Statutes.

RULING

The Department does not consider trade vendors such as color separators, typesetters, and the assemblers of mechanicals, lithographic films and flats to be manufacturers. Taxpayers who are not engaged in manufacturing may purchase materials on resale only to the extent that such materials become an ingredient or component part of tangible personal property to be sold under Section 12-412(18).

Therefore, with respect to the purchase of materials by trade vendors in the printing industry, it is hereby ruled that the use of resale certificates is limited to the purchase of the ingredients or components which physically become part of the tangible personal property sold to the customer. Other materials which do not become physically incorporated in the tangible personal property to be sold cannot be purchased on an exempt basis. Trade vendors are not considered to be manufacturers and, consequently, do not consume the materials in an industrial plant in the actual fabrication of a finished product to be sold.

LEGAL DIVISION

December 13, 1990