Was electricity used to make printing plates exempt when the printer separately billed the customer for the plate?

Plain-English summary

Electricity used to make a printing plate for the printer's own use was not exempt.

The electricity could qualify only when the plate was actually manufactured for sale to the customer. A separately stated plate charge did not by itself prove a sale.

The charge was treated as a plate sale only when a written agreement clearly made the customer the plate owner. Without that agreement, the separate plate and printed-material charges together were simply the selling price of the printed materials.

Common questions

Did a separate plate invoice prove a sale? No.

What established customer ownership? A clear written agreement.

Was electricity for the printer's retained plate exempt? No.

Citations and references

• 34 Tex. Admin. Code Rule 3.300(b)(3)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8912L0974E14

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

December 14, 1989

Dear *****:

Thank you for your letter regarding sales tax exemption on
electricity used in making printer plates for use in printing.

The electricity used to make a printing plate for the printers own
use and not for resale is nonexempt.

The electricity would be exempt use only in transactions where the
printing plate is actually manufactured for sale to the customer. The fact that
the customer may be invoiced for the printing plate does not constitute a sale
of the printing plate to the customer.

A separate charge by the printer for the printing plate will be
considered a sale of the printing plate to the customer only if there is a
written agreement between the parties clearly making the customer the owner of
the printing plate. When there is no written agreement between the printer and
the customer and the manufacturer separates the charge for the aid from the
charge for the printed materials, a sale will not be considered to have
occurred. The combined charges constitute the selling price of the printed
materials. Please refer to Rule 3.300 (b)(3).

This opinion is based on the facts presented. If there are
additional or different facts, the opinion may change.

If you have any questions or need additional information, you may
call me at 463-4666 or write to me at Tax Correspondence, Comptroller of Public
Accounts.

Sincerely,
Jo Ann Dieck
Tax Correspondence