95-081
Response
November 16, 1995
Request
TAX
COMMISSION
210
NO. 1950 W.
SALT
LAKE CITY, UT 84134
ATTN:
XXXXX
DEAR
XXXXX
I
WORK FOR A COMPANY NAMED XXXXX. PART OF
OUR BUSINESS IS REPAIRING COPIERS, AND ALSO RECHARGING TONER CARTRIDGES. THIS PROCESS INVOLVES REPLACING USED TONER
WITH NEW TONER.
SOME
OF OUR CUSTOMERS ARE PRINTING COMPANIES AND SELL THE COPIES THAT THEY MAKE ON
THEIR COPIER.
I
UNDERSTAND THAT THE WORK PERFORMED ON THE COPIER ITSELF IS TAXABLE BUT WOULD
THE TONER BE TAXABLE? I CALLED THE TAX
COMMISSION AND THEY SAID THAT INK IS NOT TAXABLE. TONER, I WOULD IMAGINE, WOULD BE CONSIDERED AN INK. IS THIS CORRECT? ALSO WOULD THE WORK PERFORMED ON THE CARTRIDGE TO REFILL THE
TONER BE TAXABLE?
I
WOULD APPRECIATE A RESPONSE TO MY QUESTIONS AS SOON AS POSSIBLE DUE TO THE FACT
THAT WE ARE HOLDING OFF ON BILLING SOME OF OUR CUSTOMERS.
THANK
YOU.
XXXXX
XXXXX
RE:
Advisory Opinion - Application of sales tax to toner and other supplies sold to
printing companies and other customers.
Dear
XXXXX
We
have received your request for information regarding the application of sales
tax to your sales of toner and toner cartridges. We find as follows:
Under
Utah law, commercial printers and copy service business are entitled to
purchase certain materials and supplies tax free if those materials become a
component part of finished goods produced for resale. Copy machine toner fits within the category of tax-exempt
supplies if the following conditions are met.
1.
The exemption applies to purchases by a commercial printer or copy service that
uses the toner to produce copies or printed material for resale. The exemption applies because the toner
becomes a component part of the final taxable product. You must obtain resale tax exemption
certificates from your clients to document their tax exempt purchases. Retain the exemption certificates with your
tax records.
The
exemption does not apply to purchases by companies that are not in the business
of selling copying or printing services.
For these companies, the purchase of toner or toner cartridges is like
the purchase of other office supplies used by the companies for their own
consumption.
The
exemption does not apply to charges for your labor to refill the cartridges.
2.
Tax-exempt portions of a transaction must be separately stated on the receipt
or invoice or the entire charge is taxable.
If you are billing your commercial printing and copy service clients for
both taxable services, such as labor to repair a copier or to refill a toner
cartridge, and non- taxable purchases of toner or toner cartridges, the
non-taxable charges must be separately stated or the entire amount is taxable.
Please
let us know if you have further questions.
For
the Commission,
Alice
Shearer
Commissioner