How did California tax hand typing, mimeograph work, and a typing business's proposed sale of a used electric typewriter?

Plain-English summary

California treated charges for hand typing letters, manuscripts, and other documents as nontaxable services. The typist was the consumer of the paper and other materials and owed tax when purchasing them.

Mimeograph jobs were taxable. The result did not change when the customer supplied the materials or the mimeographer charged by the hour.

The source also addressed a proposed sale of an electric typewriter used in the business. It treated a retail sale as taxable when the equipment had been used in a business requiring a seller's permit. A sale to a dealer supported by a valid resale certificate did not have to be reported as a taxable retail sale by the typing business.

What this means for you

Typing, copying, and office-service businesses

Hand typing and mechanical reproduction were treated differently, and a later equipment sale required its own analysis.

Accountants and tax professionals

Track the production method, customer-furnished materials, hourly or job pricing, equipment use, buyer status, and resale certificates.

Common questions

Q: Were hand-typing charges taxable?

A: No.

Q: Were mimeograph charges taxable?

A: Yes.

Q: Was the used typewriter sale taxable?

A: A retail sale was taxable under the facts assumed; a valid resale sale was not.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 515.0240
• Original supporting opinion: 515.0240 PDF

Original ruling text

515.0240

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

November 19, 1964

L--- T--- S--XXXX --- -----, California XXXXX
Attention:

Miss P--- V. L---

K-XXXXX [ now XX-XXXXXX]

Gentlemen:
This is in reply to your letter of November 13 in which you inquire whether you should collect of pay tax on typing service and whether the tax applies to a proposed sale of an electric typewriter. Charges for handtyping letters, manuscripts, or other documents are not taxable. You would be the consumer of the paper and other materials used by you in such typing, and the tax would apply to the sale of such materials to you. However, as you are probably aware, tax does apply to charges for mimeograph jobs, and it is immaterial that you use the customer’s own material or that you charge by the hour. We assume that the electric typewriter you intend to sell has been used by you in the course of your business for which a seller’s permit is required. If such is the case, the tax applies to a retail sale of the typewriter. If you sell the typewriter to a dealer and receive a valid resale certificate then you need not report or pay tax on that sale. If we have not addressed ourselves to the problem which confronts you, or you have any further questions, please do not hesitate to write to us again. Very truly yours,

E. H. Stetson
Tax Counsel
PRD:dse
cc:

Sacramento – District Administrator