Was folding customer-supplied preprinted invoices and placing them into customer-supplied preprinted envelopes a taxable sale or service?

Plain-English summary

Stand-alone folding of customer-supplied preprinted invoices and stuffing them into customer-supplied preprinted envelopes was neither a taxable service nor a taxable retail sale.

The result depended on the customer supplying both items and no other sale or taxable service occurring with the work.

Why it was not a taxable service

Folding and envelope stuffing did not appear among Louisiana's enumerated taxable services.

Why it was not a sale or fabrication

The customer kept title to the invoices and envelopes. Temporary possession by the service provider was not exchanged for consideration paid by the provider.

The work also did not create a new product by combining or assembling separate parts, so it was not fabrication of customer-supplied tangible personal property.

Bundled transactions

If folding and stuffing occurred with a taxable service or retail sale, the ruling said the whole transaction was likely taxable.

Common questions

Q: Did temporary possession of the customer's materials create a sale?

A: No.

Q: Did putting an invoice into an envelope count as fabrication?

A: No.

Q: Was the result the same if printing or another taxable transaction was included?

A: Not necessarily; the ruling warned that the combined transaction was likely taxable.

Citations and references

• La. R.S. 47:301(10)(a)(i) and 47:301(12) — retail-sale and sale definitions
• La. R.S. 47:302(A) and 47:302(C) — tax on tangible property and enumerated services
• The American Heritage College Dictionary fabrication definition cited in the ruling
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 01-008

Original ruling text

Revenue Ruling
No. 01- 008
September 5, 2001
Taxability of Folding Invoices and Stuffing Envelopes
This Revenue Ruling addresses whether folding pre-printed invoices and stuffing pre-printed
envelopes, both of which are provided by the customer, are taxable services or taxable sales.
La. R. S. 47:302(C) provides that a tax is levied upon the sale of specifically enumerated services in
this state. La. R.S. 47:301(14) defines “sales of services.” This definition does not include the
service of folding invoices and stuffing envelopes. Hence, the service of folding invoices and
stuffing envelopes is not itself a taxable service when the customer furnishes both the pre-printed
invoices and the pre-printed envelopes and no other service or sale takes place in conjunction with
the services of folding and stuffing.
It must also be determined whether or not the transaction is a taxable sale. La. R. S. 47:302(A)
levies a tax upon the sale at retail, the use, the consumption, the distribution, and the storage for use
or consumption in this state, of each item or article of tangible personal property. “Sale at retail” is
defined in La. R.S. 47:301(10)(a)(i) as
“a sale to a consumer or to any other person for any purpose other than for resale as
tangible personal property, or for the lease of motor vehicles in an arm’s length
transaction, and shall mean and include all such transactions as the secretary, upon
investigation, finds to be in lieu of sales; provided that sales for resale or for lease of
motor vehicles in an arm’s length transaction must be made in strict compliance with
the rules and regulations.”
“Sale” is then defined in La. R.S. 47:301(12) as
“any transfer of title or possession, or both, exchange, barter, conditional or
otherwise, in any manner or by any means whatsoever, of tangible personal property,
for a consideration, and includes the fabrication of tangible personal property for
consumers who furnish, either directly or indirectly, the materials used in fabrication
work, and the furnishing, preparing or serving, for a consideration, of any tangible
personal property, consumed on the premises of the person furnishing, preparing or
serving such tangible personal property.”
The folding of invoices and stuffing of envelopes when the customer provides both the pre-printed
invoices and pre-printed envelopes does not fit within the definition of “sale.” There is no transfer
A Revenue Ruling is written to provide guidance to the public and to Department of Revenue
employees. It is issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of
law and is not binding on the public. It is a statement of the department's position and is binding on
the department until superseded or modified by a subsequent change in statute, regulation,
declaratory ruling, or court decision.

Revenue Ruling No. 01-008
Page 2 of 2
of title or possession, exchange or barter in the transaction. The customer maintains title to all items
at all times, and although there is a transfer from the customer to the service provider of possession
of the items, there is no consideration given by the service provider in exchange for his temporary
possession of the invoices and envelopes. Furthermore, there is no fabrication of tangible personal
property when the service provider folds the pre-printed invoices provided by the customer and
stuffs them into pre-printed envelopes provided by the customer. To “fabricate” is to make, create,
or construct by combining or assembling diverse, typically standardized parts. (The American
Heritage College Dictionary 488 (3d ed. 1997)). Fabrication is generally thought of as creating
something new out of separate parts that may or may not lose their own identity in the process.
Stuffing invoices into envelopes does not make, create, or construct any new item or product.
Therefore, folding pre-printed invoices provided by the customer and stuffing them into pre-printed
envelopes also provided by the customer does not meet the definition of a “sale.” It thereby follows
that the provision of such services is not a taxable sale.
However, if this transaction takes place in conjunction with the sale of tangible personal property or
in conjunction with a taxable service, the entire transaction, including the folding and stuffing of
pre-printed material provided by the customer, is likely to be a taxable one.
Holding:
The service of folding pre-printed invoices provided by the customer and stuffing them into preprinted envelopes also provided by the customer is not a taxable service or a taxable retail sale as
long as no other taxable service is provided and no retail sale is made in conjunction with the
service of folding and stuffing.

Cynthia Bridges
Secretary
By:

Cynthia D. Pugh
Attorney
Policy Services Division