Skip to main content

Revenue Administrative Bulletin 1987-5

Approved: August 12, 1987



RAB 87-5. This bulletin is being issued to clarify sales and use tax Rule 63 pertaining to lithographers.

The Department of Treasury has determined that a lithographer is an industrial processor when producing a final film or plate for sale. Processes leading up to and resulting in the film or plate, such as layout artwork, production artwork, keylines, negatives, positives, transparencies, photocopies or photostats, color separations and proofs are industrial processes.

"Industrial processing" means the activity of converting or conditioning tangible personal property by changing the form, composition, quality, combination or character of the property for ultimate sale at retail.

All materials and equipment used or consumed directly in producing the final film or plate for ultimate sale at retail or to produce a product to be ultimately sold at retail are exempt from sales and use tax. R 205.113 Rule 63.

Note: Industrial processing exemption does not apply to the production of exempt newspapers, magazines, and periodicals (with the exception of newspaper supplements) as specifically excluded in the Sales and Use Tax Acts.

The sale of film or plate is a sale of tangible personal property subject to sales or use tax. A lithographer making sales of film or plates shall have a sales tax license and shall remit sales tax on taxable sales and obtain and retain documentation of exempt sales. The tax base of a lithographer that also operates as a printer selling tangible personal property would be the full consideration received without a deduction for separately itemized charges for the processes including that for the film or plate.