Sales/excise Tax Division Instructional Bulletin No. 17 - Maine Revenue Services (Page 2 of 9) in pdf

Any other charges for labor or services rendered in producing printed materials are a part

of the taxable sale price of the tangible personal property or fabrication services, whether or not

such charges are separately stated.

Purchases by printers and publishers. Printers and publishers will generally be

liable for sales or use tax on purchases of tangible personal property for use in their

business unless the items purchased will be resold in the form of tangible personal

property; or constitute machinery and equipment for use directly and primarily in the

production of tangible personal property for later sale or lease; or will become an

ingredient or component part of, or be consumed or destroyed directly and primarily in the

production of tangible personal property for later sale or lease, other than lease for use in

this State.

Purchases for resale. Tangible personal property and fabrication services

purchased by a printer or publisher who will resell them without making use of

them are not subject to tax. When purchasing for resale, the printer or publisher

should furnish the supplier with a resale certificate in substantially the form set

forth in Rule No. 301. If items purchased exempt from tax as being for resale are

subsequently used by the printer or publisher, that person becomes liable for use

tax based on the cost of the items so used, even if the items are in fact ultimately

sold.

ii.

Machinery and equipment. Maine law provides an exemption from sales

and use tax for machinery and equipment used directly and primarily in the

production of tangible personal property for later sale. In the case of printers and

publishers, the tangible personal property produced and sold is the final printed

product, for example: a newspaper, brochure, catalog, magazine, or book. Since

many so-called "pre-press" functions in the modern printing industry constitute an

integral and essential part of an integrated series of operations leading to the

production of the final printed product, much of the machinery and equipment used

in such functions is considered by Maine Revenue to be exempt from the sales and

use tax. A list of items that will generally be considered by Maine Revenue as

exempt provided that the "primarily" (more than 50% of the time) test is met is

found below, along with a list of items that will generally not be entitled to

exemption.

Exempt items should be purchased tax-free by furnishing the supplier with a

certificate of exemption in substantially the form set forth in Rule No. 303.

Items of machinery and equipment generally entitled to exemption:

1. Equipment (whether on or off the production site) used in the process of the

front-end editorial or composing functions, including, without limitation,

equipment used to input and/or edit text and/or graphics, including, without

limitation, laptops, other PCs and workstations, and also including, without

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Sales/excise Tax Division Instructional Bulletin No. 17 - Maine Revenue Services Page 2