Response
December 13, 1989
December
13, 1989
XXXXX,
CPA
Dear
XXXXX:
In
response to your letter of October 27, 1989, I believe the typesetting service
done by XXXXX is exempt from sales tax as explained in the third paragraph of
Tax Bulletin 8-89, referred to in your letter.
Respectfully,
XXXXX
Managing
Auditor
M
E M O R A N D U M
TO: XXXXX
Auditing
FROM: XXXXX
DATE: November 6, 1989
SUBJECT: Request for Declaratory Judgment/Advisory
Opinion
XXXXX,
C.P.A., has requested a declaratory judgment/advisory opinion on the taxability
of services by XXXXX.
Please
respond according to the guidelines established by the Commission. Thank you.
October
27 1989
The
Commissioners
Utah
State Tax Commission
160
East 300 South
Salt
Lake City, Utah 84134-0400
REF: Application for Ruling on Taxability of
Services by XXXXX, XXXXX, XXXXX
Ladies
and Gentlemen:
Your
recent publication setting forth the general principles for taxing the services
of typographers leads us to believe that my client, XXXXX, is not required to
collect sales tax for her services.
Based
on my client's description of her services, quoted below, we ask you to rule on
this question for this particular business.
"XXXXX
is a service bureau for artists, designers, advertising agencies, and printers.
We do typesetting and output typesetting from disks supplied by our customers.
We are the first step in an unfinished product. The type is then pasted on
armbands by our clients and given to a printing company to print. The finished
product is then given to the artist or designer or agency's client for their
use, either to sell or use."
"I
pay taxes on supplies I use. My clients are then taxed by me when they pick up
their type. They in turn tax their client for their work. The printer taxes the
work. If the client sells the finished piece, it is taxed again."
The
description given is accurate with respect to all her business activity. We
feel practically certain that this activity fits within your guidelines for
non-taxable services but would like your confirmation so that the issue can be
settled now. My client states that she has competitors who do not collect sales
tax, and that of course gives them an unfair-advantage.
We
will be pleased if you will respond to either XXXXX or to us.
Very
truly yours,
XXXXX