Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart S - SPECIFIC APPLICATIONS › Section 130.2000 - Persons Engaged in the Printing, Graphic Arts or Related Occupations, and Their Suppliers

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				Classification of Businesses
Falling into the classification of persons engaged in the
				  graphic arts or related occupations are printers, book binders, typographers,
				  portrait or commercial photographers, commercial artists, portrait painters,
				  sign painters, photostaters, and blueprinters. This list is illustrative, but
				  not exhaustive. Persons falling under this Part may or may not qualify for the
				  graphic arts machinery and equipment exemption set forth in Section
				  130.330(g).
b) Persons Engaged in the Graphic Arts - When
				Liable For Tax
1) Persons engaged in the
				graphic arts or related occupations may, under certain circumstances, be
				considered to be engaged in the business of selling tangible personal property
				to purchasers for use or consumption, in which event they incur retailers'
				occupation tax liability. This is the case, for example, when they sell to
				purchasers for use or consumption tangible personal property which is standard
				enough to be stocked for sale or offered for sale from catalogues or other
				sales literature, or which otherwise is sold at retail apart from the seller's
				engaging in a service occupation. Illustrations would include legal forms,
				stock or standard greeting cards, pictures or other items which are stocked for
				sale or offered for sale to the public generally, or products of
				photoprocessing.
2) Effective
				August 1, 1961, a person who is engaged in the graphic arts also incurs
				retailers' occupation tax liability on receipts from sales, to users, of items
				which such person produces on special order if such item serves substantially
				the same function as stock or standard items of tangible personal property that
				are sold at retail. Items which "serve substantially the same function" are
				those which, when produced on special order, could be sold substantially as
				produced to someone other than the original purchaser at substantially the same
				price. A printed item that is personalized is always considered to be printed
				on special order.
3) Effective
				September 1, 1988, photographers, film makers, and other servicemen, are
				subject to retailers' occupation tax on the photoprocessing component of their
				total service charge when they sell products of photoprocessing. The tax on the
				photoprocessing component will apply regardless of whether the photographer
				performs the photoprocessing in-house or engages a third-party photoprocessor.
For purposes of the tax imposed on photographs, negatives and positives
				by
the
Act, photoprocessing includes, but is not limited to,
				developing films, positives, negatives, and transparencies,
as well as
tinting, coloring, making, and enlarging prints. Photoprocessing does
				not include color separation, typesetting, and platemaking by photographic
				means in the graphic arts industry and does not include any procedure, process,
				or activity connected with the creation of the images on the film from which
				the negatives, positives, or photographs are derived. The charge for in-house
				photoprocessing may not be less than the photoprocessor's cost price of
				materials. In transactions in which products of photoprocessing are sold in
				conjunction with other services, if a charge for the photoprocessing component
				is not separately stated, tax is imposed on 50% of the entire selling price
				unless the sale is made by a professional photographer, in which case tax shall
				be imposed on 10% of the entire selling price
. [35 ILCS
				120/2-15] The tax on photoprocessing may be paid when
				purchasing self-developing film, such as Polaroid, or film which includes
				photoprocessing charges in the purchase of the film.
A) EXAMPLE: The professional photographer
				receives an assignment to shoot a specified layout from an advertising agency.
				The photographer selects the location, hires the models, arranges for the
				make-up, rents the equipment and shoots the scene. The photographer sends the
				undeveloped film to an outside photoprocessing laboratory for development. The
				photographer's bill for the sale of the photograph includes a charge for the
				photographer's artistic and other services and a separately-stated charge for
				the photoprocessing component which is either the charge made to the
				photographer by the photoprocessing laboratory or such an amount plus the
				photographer's customary mark-up. The tax should only be applied to the
				photoprocessing component.
B)
				EXAMPLE: The same facts as above except the professional photographer does not
				separately state a charge for the photoprocessing component and bills the
				client a lump sum. A tax is collected on 10% of the lump sum price.
C) EXAMPLE: A portrait photographer
				photographs a family in the photographer's studio and develops the film
				in-house. The photographer's bill includes a sitting fee and a
				separately-stated charge for the product of photoprocessing. A tax is collected
				on the photoprocessing charge only.
D) EXAMPLE: A photographer develops exposed
				film and transfers negatives and prints to a consumer. Tax is collected on the
				entire bill.
E) EXAMPLE: An
				advertising agency prepares advertising brochures for a customer using images
				provided by the customer on film, which the advertising agency develops,
				enlarges, and prints. The photoprocessing component is not separately stated on
				the bill. Tax is based upon 50% of the bill.