The sale of the optional service contract with a separately stated sales price is not taxable. Supplies purchased for use in this copying machine are taxable, unless they become an ingredient or component part of the tangible personal property to be sold. Therefore, only supplies such as paper, toner and ink, which become part of the photocopies to be sold , are exempt from taxation. The convenience store vendor may purchase such supplies tax free upon presentation to its vendor of a properly completed ST-12. Sales of the photocopies are taxable. A copying machine is purchased by a packaging business.
Customers bring in tangible personal property and documents to be packaged for shipment.
The business makes the copying machine available to self-service customers and also makes copies for customers. As in Example 1, above, the sale of the copying machine to the packaging business is taxable, and sales of supplies for this machine are also generally taxable unless they become an ingredient or component part of the photocopies sold. Sales of the photocopies are taxable. An insurance agent buys a copying machine for use in her office. She also buys supplies for the machine.