Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article II - Sales and Use Tax › Chapter 32 - EXEMPTIONS › BUSINESS EXEMPTIONS › Section 32.36 - Printing and related businesses

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
The printing exemption.
Printing and related businesses are exempt from sales and use taxes in
						accordance with the following:
(1)
Machinery, equipment, parts and supplies used directly in
						printing.
Printing, when engaged in as a business, is included in
						manufacturing under the TRC and regulations applicable to manufacturers are
						also applicable to printers. Equipment, machinery-including components of a
						computer system, accessories, parts and supplies therefor which are used
						predominantly and directly in the business of printing, regardless of the
						technology involved, is exempt from tax. Where equipment is used for both
						exempt and nonexempt purposes, the predominant use test shall determine its tax
						status. Effective February 7, 1981, foundations used to support equipment,
						machinery and parts used directly in printing are exempt from tax. See §
													32.32 (relating to manufacturing;
						processing). With the exception of purchases involving improvements to real
						estate, directly used property may be purchased free of tax upon the
						presentation to a vendor of a properly executed exemption certificate
						certifying that the purchase will be directly used in printing-manufacturing.
						For example, company X has a computer printer and photocopy machine which
						predominantly supports administrative operations. Neither device qualifies for
						the printing exemption. Company Y has a print shop operated as a separate
						profit-center reproducing multiple copies of substantially identical printed
						matter. The tangible personal property in this print shop which is
						predominantly used in printing qualifies for the sales tax exemption.
(2)
Related businesses.
The
						exemption also applies to businesses related to the printing industry which,
						although they themselves are not printing, are "manufacturing" within the
						meaning of section 201(c) of the TRC (72 P. S. §
														7201(c)) and thus are not
						subject to the multiple copy requirement. Businesses include trade binding,
						engraving, silk screening, typography, including advertising typographers,
						plate making, color separating, stereotyping, electrotyping, gravure cylinder
						making, photographic processing and the business of manufacturing page
						mechanicals, camera ready copy, image carriers or related or component items
						for sale to printers for use in their printing operations.
(3)
Materials incorporated as
						components into printed matter.
The purchase of personal property
						which will be physically incorporated by the printer as an ingredient or
						constituent of printed matter and which will be sold in the regular course of
						business is a purchase for resale. These materials may be purchased by the
						printer free of tax upon presentation to the vendor of a properly executed
						exemption certificate certifying that the purchase is for resale.
(4)
Inhouse printing.
Where
						the normal business of an entity is other than the business of printing, but
						the entity also provides its own full service printing requirements, an inhouse
						printing operation will qualify for the manufacturing exemption if the
						following apply:
(i) Inhouse printing is to
						be conducted in a separate and distinct location, utilizing separate and
						distinct machinery and supplies, devoted predominantly to printing
						activities.
(ii) Inhouse printing
						is the responsibility of employes assigned to the job of inhouse printing and
						whose duties are predominately related to printing activities.
(iii) Separate accounting or
						interdepartmental billing is provided to reflect the cost of operating inhouse
						printing activities and to charge these costs against other business activities
						conducted by the taxpayer.
(iv)
						Inhouse printing activities are separate and distinct from other business
						activities and are not an integrated part of general data processing, word
						processing, copying or other business activity of the taxpayer.
(v) Inhouse printing activities are of
						sufficient size, scope and character that they could be conducted on a
						commercially viable basis separate and distinct from other business activities
						of the taxpayer.