Could a Texas aluminum-can manufacturer buy printing plates and artwork negatives without sales tax?

Plain-English summary

The manufacturer used printing plates to apply designs to aluminum soft-drink cans. It bought artwork negatives and used a machine to reproduce each negative onto a printing plate.

The negatives were saved but could lose their value after one use because a promotion ended or Food and Drug Administration labeling requirements changed. The printing plates became valueless within six months.

The Comptroller answered yes when asked whether the manufacturer could purchase both the printing plates and negatives exempt from tax.

What this means for you

The ruling covers the two items actually presented: the printing plates used in can manufacturing and the artwork negatives used to create them. It does not separately analyze chemicals, film, or paper.

Common questions

Were the printing plates exempt? Yes.

Were the artwork negatives exempt? Yes.

Did saving the negatives prevent the exemption? No different result was given; the letter noted that they could become worthless after a single use.

Citations and references

The letter cited no specific statute or rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9203178L

Original ruling text

March 13, 1992

Dear **:

Thank you for your recent letter which is restated in part with response below.

Facts: Corporation A is located in Texas and manufactures aluminum cans for
soft drink companies. In the process of manufacturing these aluminum cans,
Corporation A uses printing plates. These printing plates are rolled around the
can at a high speed while ink is sprayed over the plate and the can to convey
the desired design onto the cans.

Corporation A purchases printing plates from Vendor C and a negative, which has
the art work incorporated onto it, from Vendor B. Corporation A now produces
their own printing plates by owning a machine that reproduces the negative onto
the printing plate. The negatives are filed away and saved. Even though the
negatives are saved, they may be without value after one use because of a
special promotion offered by a soft drink company or the Food and Drug
Administration may change the requirements on what is required to be written on
the can. The printing plates are without value within six months.

Question: Can Corporation A make exempt purchases of the printing plates and
negatives?

Response: Yes.

This opinion is based on the facts you presented. Other facts, though similar,
may yield different results.

If you have questions or need more information, please call or write. You may
reach me by calling toll free, (800) 531-5441. My direct line number is (512)
463-4680. The number for FAX transmissions is (512) 475-0900. You may write to
me in care of Tax Administration Division.

Sincerely

Al Van Allen
Tax Administration Division