Were photocopies sold through coin- or card-operated machines at a municipal library subject to sales tax?

Plain-English summary

A city library sold patent copies and other photocopied products. California began with the general rule that photocopies are tangible personal property and their retail sale is taxable, whether over the counter or through a machine.

Section 6359.45 and Regulation 1574 created a municipal-library exception for copies sold through coin- or card-operated machines at the library facility. The library or its contracted vendor was the consumer rather than retailer, so the customer charge was not subject to sales tax.

Sales or use tax instead applied to the equipment, paper, ink, and other property used to provide the machine service. Over-the-counter photocopy sales remained taxable. The letter separately noted that authorized public-records copies would generally be nontaxable.

What this means for you

Municipal libraries, copy vendors, and city tax advisers

Separate machine transactions at the library from staff-made counter copies and public-records responses. Each has a different tax basis and documentation trail.

Common questions

Q: Were machine-copy charges at the municipal library taxable?

A: No.

Q: Who was treated as consumer?

A: The library or its contracted machine vendor.

Q: Were over-the-counter copies taxable?

A: Yes.

Citations and references

• California Revenue and Taxation Code §§ 6006(a), 6012, 6051, and 6359.45
• California Sales and Use Tax Regulation 1574(b)(1)(A)

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 590.0023
• Original supporting opinion: 590.0023 PDF

Original ruling text

590.0023

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

JOHAN KLEHS
First District, Hayward

450 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-3723

DEAN F. ANDAL
Second District, Stockton
ERNEST J. DRONENBURG, JR.
Third District, San Diego

August 9, 1996

BRAD SHERMAN
Fourth District, Los Angeles
KATHLEEN CONNELL
Controller, Sacramento

Dear Mr. REDACTED TEXT,
This is in response to your letter of June 4, 1996, regarding the application of tax to sales of photocopies by the City of REDACTED TEXT. Revenue and Taxation Code section 6051 imposes a sales tax on all retailers measured by their gross receipts from retail sales of tangible personal property in this state. Although the sales tax is imposed upon the retailer, the retailer may collect sales tax reimbursement (usually itemized on the invoice as "sales tax") from the purchaser if the contract of sale so provides. (Civ. Code § 1656.1.) A "sale" includes any transfer of title or possession of tangible personal property for a consideration. (Rev. & Tax. Code § 6006(a).) The measure of sales tax is the total amount of the sale price including charges for service costs and any services that are a part of the sale. (Rev. & Tax. Code § 6012(a)(2) and (b)(l).) You state that the city sells both photocopies of patents from the City's Patent Library and other photocopied products. For purposes of this discussion, we assume the photocopying of documents is not in response to a request made under the California Public Records Act ("CPRA"). Generally, the city's charges for documents photocopied and transferred pursuant to a request under authority of CPRA would be nontaxable. The general rule is that sales tax applies to retail sales in this state of photocopies, whether over-the-counter, or through coin-or card-operated copy machines. However, a municipal library or any vendor making sales pursuant to a contract with a municipal library is a consumer of photocopies sold at retail through a coin-or card-operated copy machine located at a library facility. (Rev. & Tax Code § 6359.45 and Reg. l574(b)(1)(A).) If the city is selling the photocopies through a coin-or card-operated copy machine located at the library facility, it is not considered a retailer, but a consumer of the photocopies for sales tax purposes. In other words, sales tax would not apply to the city's sales of photocopies through a coin-or card-operated copy machine located at the library facility. Rather, sales or use tax applies to the sale to the city, or to the use by the city, of the equipment, paper, ink, or other tangible personal property the library uses to provide

E. L. SORENSEN, JR.
Executive Director

the photocopying service. Sales tax applies to over-the-counter retail sales of photocopying (not coin-or card-operated). If you have further questions regarding sales tax, please do not hesitate to write again. Very truly yours, Robert E. Thomas Tax Counsel RET/cmm cc: San Jose District Administrator (GH)