Sales/excise Tax Division Instructional Bulletin No. 17 - Maine Revenue Services (Page 5 of 9) in pdf

Tangible personal property purchased for resale.

ii.

Tangible personal property which becomes an ingredient or component

part of, or which is consumed or destroyed directly and primarily in the production

of tangible personal property for later sale or lease.

iii.

Machinery and equipment and parts for use the purchaser directly and

primarily in the production of tangible personal property for later sale or lease.

BOOKBINDERS

Sales by bookbinders. Persons engaged in the business of binding books,

magazines, catalogs or other printed matter belonging to other persons are engaged in

making sales of fabrication services. Such sales are taxable unless the purchaser will resell

the bound material without making use of it, or unless the purchaser is an exempt entity.

When a bookbinder binds his own books, magazines or other printed matter and

sells the finished products, or makes and sells loose-leaf or detachable binders,

the tax is applicable to the total price of such sales unless the purchaser will resell the

items without making use of them or is an exempt entity.

Purchases by bookbinders. As manufacturers and sellers, bookbinders are not

liable for sales or use tax on the following purchases:

Tangible personal property purchased for resale.

ii.

Tangible personal property which becomes an ingredient or component

part of, or which is consumed or destroyed directly and primarily in the production

of tangible personal property for later sale or lease.

iii.

Machinery and equipment and parts for ruse by the purchaser directly and

primarily in the production of tangible personal property for later sale or lease.

When bookbinders purchase machinery and equipment and parts, such purchases

are exempt from tax only if the item purchased will be used more that 50% of the time in

the production of tangible personal property for sale by the bookbinder. Purchases of

machinery and equipment and parts for use 50% or more of the time in the performance of

fabrication services upon tangible personal property belonging to others are subject to tax.

Purchases by bookbinders of cloth, leather, cardboard, staples, glue, thread and

other supplies which will actually become an ingredient or component part of the bound

material are exempt as being, in effect, purchases for resale, whether used in the

production of tangible personal property or in the performance of fabrication services

upon property belonging to others.

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Sales/excise Tax Division Instructional Bulletin No. 17 - Maine Revenue Services Page 5