Did the Utah State Tax Commission rule on whether newspaper printing/finishing equipment qualifies for the manufacturing sales tax exemption?

Plain-English summary

This is an unusual entry in Utah's PLR archive: it contains no substantive tax ruling. A newspaper publisher requested a declaratory judgment (under then-Rule R865-85S) that its equipment — satellite facsimile-receiving equipment that reconstructs newspaper page images, plus stacking, wrapping, and labeling equipment used after printing — qualified for Utah's manufacturing sales tax exemption (§ 59-12-104(16), 1989 version) as machinery/equipment used in "new or expanding operations" at a manufacturing facility.

The publisher argued newspaper publishing fell within the qualifying SIC Code range (2000-3999, specifically SIC 2711), that it was a "manufacturer" producing tangible personal property (the newspaper) from raw materials (newsprint and received page images), and that starting to print this particular newspaper in Utah for the first time made it a qualifying "new operation."

The Commission's response, however, did not rule on any of this. It stated the request was "under review" together with other similar requests, that "we are taking no action at this time because of some pending matters that must be considered prior to making a decision," and apologized for the delay — promising to inform the taxpayer once a decision was made. No decision on the merits appears in the available record for this ruling.

What this means for you

Newspaper publishers and print manufacturers researching this exemption

Don't treat this entry as authority either way on whether newspaper facsimile-receiving, stacking, wrapping, or labeling equipment qualifies for Utah's manufacturing exemption — the Commission expressly declined to decide the question in this letter. If you're researching this issue, look for a later, substantive Utah ruling or statute/rule update addressing newspaper production equipment specifically (the exemption's numbering has since changed from the 1989-era § 59-12-104(16)).

Researchers and archivists of this collection

This ruling is preserved because it's part of the Commission's published PLR archive, but it illustrates that not every entry in a state's ruling index contains a holding — some are purely procedural (a pending-request acknowledgment). Treat "no answer given" as the accurate, complete takeaway rather than inferring an outcome from the taxpayer's own arguments.

Common questions

Q: Does this ruling say whether newspaper production equipment qualifies for Utah's manufacturing exemption?
A: No. The Commission's response did not reach that question — it only stated the request was pending and deferred a decision.

Q: Is there a later ruling that answers this question?
A: Not one available in this collection under this ruling number. If you need a current answer, consult a Utah tax professional or search for more recent guidance on the manufacturing exemption as it now reads.

Q: Does this letter bind the Commission to any position?
A: No — it doesn't state a position at all, so there's nothing here for the Commission (or anyone else) to be bound by.

Citations and references

Statutes and rules (1989-era numbering — since renumbered/amended):

• Utah Code Ann. § 59-12-104(16) (1989) (manufacturing exemption for machinery/equipment in new or expanding operations)
• Utah Admin. Rule R865-85S (1989) (definitions of machinery, equipment, new or expanding operations, and manufacturer)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original page: https://files.tax.utah.gov/tax/commission/ruling/89-003.htm

Original ruling text

Response
December 1, 1989

Dear
XXXXX:

I'm
writing in response to your letter of June 2, 1989 asking for a ruling on the
issue of whether facsimile, stocking, wrapping, and labeling equipment
qualifies for exemption from sales tax under Utah statute 59-12-104 (16) .

The
Tax Commission is reviewing your request as well as others. However, we are
taking no action at this time because of some pending matters that must be
considered prior to making a decision on these requests.

I
apologize for the delay. However, your request is being processed, and we will
inform you of the Commission's decision as quickly as possible.

For
the commission,

Joe
B. Pacheco

Commissioner

Request

June
2, 1989

Utah
State Tax Commission

Heber
M. Wells Building

160
East 300 South

Salt
Lake City, UT 84134

RE:
XXXXX Request for Declaratory Judgement

Gentlemen:

Please
accept this letter as the taxpayer's request for declaratory judgement under
Rule R865-85S(B)(6). The taxpayer believes that equipment purchased and used in
Utah to produce the newspaper XXXXX is qualified for exclusion under Sec.
59-12-104(16) as new or expanded manufacturing operations.

Section
59-12-104(16) provides an exemption for:

(16)sales
or leases of machinery and equipment purchased or leased by a manufacturer for
use in new or expanding operations (excluding normal operating replacements,
which includes replacement machinery and equipment even though they may
increase plant production or capacity, as determined by the commission) in any
manufacturing facility in Utah. Normal operating replacements shall include
replacement machinery and equipment which increases plant production or
capacity. Manufacturing facility means an establishment described in SIC Codes
2000 to 3999 of the Standard Industrial Classification Manual 1972, of the
federal executive Office of the President, Office of Management and Budget.

Rule
R865-85S defines machinery, equipment, new or expanding operations and
manufacturer as follows:

1.
"Machinery" means electronic or mechanical machines to be
incorporated into a manufacturing or assembling process from the initial stage where
actual processing begins through the completion of the finished end product,
including final processing, finishing or packaging of articles which are for
sale in commerce.

Automated
material handling and storage machinery shall be included in this definition
when such machinery is part of the integrated continuous production cycle.

2.
"Equipment" means any independent device separate from any machinery
but essential to an integrated or continuous manufacturing or assembly process
or any subunit comprising a component of any machinery or auxiliary thereof,
including such items as dies, jigs, patterns, molds, and similar items used in
manufacturing, processing, or assembling. Qualifying equipment also includes
devices necessary to the control or operation of machinery and equipment
qualifying under this rule even though not located in the specific
manufacturing area.

3. New or expanding operations means
   manufacturing, processing, or assembling activities which:

(a) are substantially different in nature,
character, or purpose from prior activities;

(b) are begun in a new physical plant location
in Utah; or

(c) increase production or capacity. This
definition is subject to limitations dealing with normal operating replacement.

4. "Manufacturer" means a person who:

(a) functions within the activities included in
SIC code classification 2000-3999;

(b) produces a new, reconditioned or
remanufactured product, article, substance, or commodity from raw,
semi-finished, or used materials; and

(c) in the normal course of business produces
products for sale as tangible personal property.

The
taxpayer publishes the newspaper XXXXX. The page layouts are prepared in XXXXX
and transmitted via satellite to the receiving equipment located in Salt Lake
(facsimile equipment). The taxpayer owns the equipment which reconstructs the
images of the newspaper pages and produces a photographic image of the page
which is used to produce a plate. The plate is produced by XXXXX, an
unaffiliated company which publishes the XXXXX and XXXXX. The presses are owned
by XXXXX as well. The raw newsprint used to print the paper is owned by XXXXX.
The equipment used to stack, wrap and label the newspaper after it is printed
is also owned by XXXXX.

The
taxpayer believes the equipment owned is essential to an integrated
manufacturing process as described in Rule R865-855(2). Furthermore, the
taxpayer began publishing XXXXX in Utah on XXXXX. This was the first time XXXXX
was printed in Utah constituting a "new operation" as defined in Rule
865-85S(3).

XXXXX
is a manufacturer as defined in Rule 865-85S(4) in that it meets all of the
qualifications required.

A) Newspaper publishing is SIC Code 2711.
Within the range 2000-3999

B) XXXXX produces XXXXX using raw newsprint and
the images received via satellite

C) XXXXX is tangible personal property produced
by XXXXX in the normal course of business

Since
the taxpayer is a manufacturer, purchases equipment essential to the integrated
manufacturing process and uses that equipment in a new or expanded operations
in Utah the taxpayer believes that purchases of such equipment qualify
exemption under Section 59-12-104(16).

The
taxpayer requests that the Utah State Tax Commission determine that the
purchase of facsimile equipment, stackers, wrappers and label equipment qualify
for exemption from Utah sales and use tax, under Section 59-12-104(16).

Please
address your reply to:

XXXXX

If
you have any questions, please contact me at the address above or by telephone
at XXXXX.

Very
truly yours,

XXXXX

Manager
of Taxes