The printer shall collect a sales tax when he sells printed matter at retail. When a printer charges his customer for services that are a part of the production of printed matter, such as overtime set up charges, embossing, binding operations and similar activities, the printer shall collect a sales tax on the total fee without any deduction for that part of the fee attributable to these services which the printer provides. A printer shall pay a sales or use tax on his purchase of machinery and replacement parts thereof, unless they are used directly and exclusively in an industrial plant in the actual manufacture, conversion or processing of printed material to be sold. If machinery does not satisfy the above criteria, it is not exempt even if its operation, function or purpose is an integral or essential part of a continuous production flow or manufacturing process. For example, a printer shall not pay a sales or use tax on the actual presses or on the machinery which does the binding operation, but the printer shall be liable for sales or use taxes on machinery which photoprocesses or engraves a blank printing plate, and on the machinery which sets the type for composed type.
Artwork is a prepress item.
In transactions involving the sale of photographs, drawings, paintings, hand lettering and other artwork or the photographic copies of such materials to a printer, it will be presumed that the fundamental object of the transaction is possession of the tangible end product of the artist's creative skill rather than the personal service of the artist. A prepress item may be purchased or manufactured by the printer for resale. If the prepress item is being purchased for resale to the customer, title must pass to the customer on delivery of the item to the printer. If the prepress item is being fabricated by the printer title must pass upon completion of the fabrication. A single charge may be shown for all prepress items included in a single transaction.