Wis. Admin. Code § Tax 11.56 — Printing industry

Tax 11.56(1) (1) Definitions. In this section:

Tax 11.56(1)(a) (a) “Manufacturer” includes a printer or other person who performs any one or more of the processes in manufacturing printed matter, provided that the printer or other person qualifies as being engaged in manufacturing under s. 77.51 (7h) , Stats., whether or not the printed matter is sold.

Tax 11.56(1)(b) (b) “Manufacturing printed matter” includes either of the following processes by a manufacturer:

Tax 11.56(1)(b)1. 1. Initial typesetting and composition, producing a paste-up, combining photographs with words, making page makeups and taking pictures of them, making proofs and paper for editing, producing negatives which go to the stripping department for assembly of the flat and taking a picture, either positive or negative, of a flat which after it is finally proofed is known as plate-ready film, and producing an image carrier which is installed on a printing press, or using equivalent prepress technology to produce an image carrier, and the bindery/finishing stage.

Tax 11.56(1)(b)2. 2. Using computers, scanners, proofers, typesetters, photographic equipment, film processors, and direct-to-plate equipment exclusively in performing any of the processes listed in subd. 1. “Manufacturing printed matter” does not include using the equipment described in this subdivision to design, write, or compose an original document to be printed.

Tax 11.56(1)(c) (c) “Typesetting” includes converting images into standardized letter forms of a certain style which usually are hyphenated, justified and indented automatically by means of machinery and equipment. Typesetting machinery and equipment includes fonts, video display terminals, tape and disc making equipment, computers, and typesetters which are interconnected to operate essentially as one machine. A system shall be considered to operate essentially as one machine whether or not the tape or disc is automatically fed to the typesetter.

Tax 11.56(2) (2) Printers’ taxable sales. Taxable receipts of printers include receipts from the following, unless otherwise exempt:

Tax 11.56(2)(a) (a) Charges for printing, lithography, photolithography, rotogravure, gravure, letter press, silk screen printing, imprinting, multilithing, mimeographing, photostating, steel die engraving, and similar operations for customers, whether or not the paper and other materials are furnished by the customers. A printer’s charge for printing on paper furnished by a customer to produce printed matter not to be sold is subject to the tax.

Tax 11.56(2)(b) (b) Charges for services in connection with the sale of printed matter, such as overtime and set-up charges, die cutting, embossing, folding, and binding operations, and charges for painting signs, show cards, and posters, whether the materials are furnished by the printer or by the customer.

Tax 11.56(2)(c) (c) Charges for envelopes, but not for separately stated charges for postage in the sale of prestamped envelopes.

Tax 11.56(3) (3) Taxable sales by others.

Tax 11.56(3)(a) (a) Sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., by persons who are not printers, including so-called “trade shops” such as typesetters, image reproduction manufacturers, color separators and binders, or finishers are taxable unless the sales qualify for a statutory exemption, including the following:

Tax 11.56(3)(a)1. 1. Section 77.54 (2) , Stats., which exempts from tax the sales price of tangible personal property or items under s. 77.52 (1) (b) , Stats., that are used exclusively and directly by a manufacturer in manufacturing an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., that is destined for sale and that becomes an ingredient or component part of the article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., destined for sale or is consumed or destroyed or loses its identity in manufacturing the article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., destined for sale, except as provided in s. 77.54 (30) (a) 6. , Stats.

Tax 11.56(3)(a)2. 2. Section 77.54 (2m) , Stats., which exempts from tax the sales price of tangible personal property or services that are used exclusively and directly by a manufacturer in manufacturing shoppers guides, newspapers, or periodicals and that become an ingredient or component of shoppers guides, newspapers, or periodicals or that are consumed or lose their identity in the manufacture of shoppers guides, newspapers, or periodicals, whether or not the shoppers guides, newspapers, or periodicals are transferred without charge to the recipient. The exemption does not apply to advertising supplements that are not newspapers.

Tax 11.56(3)(b) (b) Tangible personal property and items under s. 77.52 (1) (b) , Stats., include typed matter, whether or not combined with artwork, such as typeset output, a paste-up, mechanical, assembly, camera-ready copy, flat, or a photoreproduction, including film plates.

Tax 11.56(4) (4) Nontaxable sales.

Tax 11.56(4)(a) (a) Tax does not apply to charges, if stated separately on invoices and in the accounting records, for mailing services such as:

Tax 11.56(4)(a)1. 1. Addressing printed matter by hand or mechanically for the purpose of mailing.

Tax 11.56(4)(a)2. 2. Enclosing, sealing, and preparing for mailing.

Tax 11.56(4)(a)3. 3. Mailing letters or other printed matter.

Tax 11.56(4)(b) (b) Tax also does not apply to a printer’s sales of:

Tax 11.56(4)(b)1. 1. Catalogs, as defined in s. Tax 11.19 (5m) (b) , and the envelopes in which the catalogs are mailed.

Tax 11.56(4)(b)2. 2. Printed advertising materials for out-of-state use, as provided in s. Tax 11.19 (4) (a) .

Tax 11.56(4)(b)3. 3. Advertising and promotional direct mail, as defined in s. Tax 11.19 (5s) (b) .

Tax 11.56(5) (5) Exempt printing machinery and equipment. Section 77.54 (6) (am) 1. , Stats., provides that machines and specific processing equipment and repair parts or replacements thereof, exclusively and directly used by a manufacturer in manufacturing tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., and safety attachments for those machines and equipment are exempt from the sales or use tax. This includes machinery and equipment and repair parts or replacements of the machinery and equipment used exclusively and directly by a manufacturer in the printing process to manufacture tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats.

Tax 11.56(6) (6) Purchases for use in manufacturing printed matter for sale.

Tax 11.56(6)(a) (a) Persons engaged in manufacturing printed matter for sale may purchase the following property and items without tax under the statutes indicated:

Tax 11.56(6)(a)1. 1. Section 77.54 (2) , Stats. Property and items, such as paper stock or printing ink, used exclusively and directly in manufacturing an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., that is destined for sale and that becomes an ingredient or component part of an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., destined for sale.

Tax 11.56(6)(a)2. 2. Section 77.54 (2) , Stats. Property and items such as chemicals, emulsions, acids, raw film, lubricating oils, greases, nonoffset spray, finished art, color separations, plate-ready film, other positives and negatives, flats, and similar items, used exclusively and directly in manufacturing an article of tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., destined for sale and which are consumed, destroyed, or lose their identity in the manufacture of tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., destined for sale.

Tax 11.56(6)(a)3. 3. Section 77.54 (6) (am) 2. , Stats. Containers and packaging and shipping materials for use in packing, packaging, or shipping printed matter to their customers.

Tax 11.56(6)(b) (b) The exemption under s. 77.54 (2) , Stats., described in par. (a) 1. and 2. , applies to property and items purchased by a person who does not use the property other than to provide it to a manufacturer described in par. (a) for use by the manufacturer exclusively and directly in manufacturing tangible personal property and items and property under s. 77.52 (1) (b) and (c) , Stats., to be sold. The exemption under s. 77.54 (2) , Stats., does not apply if the manufactured tangible personal property or item or property under s. 77.52 (1) (b) or (c) , Stats., is not to be sold by the manufacturer to its customer or by the customer.

Tax 11.56(7) (7) Purchases for use in manufacturing printed matter not for sale.

Tax 11.56(7)(a) (a) The exemption under s. 77.54 (2m) , Stats., applies to tangible personal property or services that are used exclusively and directly by a manufacturer in manufacturing shoppers guides, newspapers, or periodicals and that become an ingredient or component of the shoppers guides, newspapers, or periodicals or that are consumed or lose their identity in the manufacture of the shoppers guides, newspapers, or periodicals, whether or not they are transferred without charge to a recipient.

Tax 11.56(7)(b) (b) Section 77.54 (43) , Stats., provides that Wisconsin sales or use tax is not imposed on raw materials if both of the following conditions are met:

Tax 11.56(7)(b)1. 1. The raw materials are processed, fabricated, or manufactured into, attached to, or incorporated into printed materials.

Tax 11.56(7)(b)2. 2. The resulting printed materials will be transported and used solely outside Wisconsin.

Tax 11.56(7)(bm) (bm) Section 77.52 (2) (a) 11. , Stats., provides that the tax does not apply to the service of printing or imprinting tangible personal property or items, property, or goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., that results in printed material, catalogs, or envelopes that are exempt under s. 77.54 (25) , (25m) , or (59) , Stats.

Tax 11.56(7)(c) (c) The tax applies to purchases of artwork, single color or multicolor separations, negatives, flats, and similar items if those purchases are used in the manufacture of tangible personal property or items or property under s. 77.52 (1) (b) or (c) , Stats., not to be sold, other than items exempt under par. (a) or (b) . A printer who does not supply paper used in printing tangible personal property is not selling tangible personal property but rather, is selling a service.

Tax 11.56(8) (8) Purchases of fuel and electricity for use in manufacturing printed matter. Section 77.54 (30) (a) 6. , Stats., provides an exemption for fuel and electricity consumed in manufacturing tangible personal property, or items or property under s. 77.52 (1) (b) or (c) , Stats., in this state. “Manufacturing” is defined in s. 77.51 (7h) , Stats.

Tax 11.56(9) (9) Additional exemptions for printing industry.

Tax 11.56(9)(a) (a) Definitions. In s. 77.54 (61) , Stats., and this subsection:

Tax 11.56(9)(a)1g. 1g. “Book printing” means activities described under 323117 of the North American Industry Classification System.

Tax 11.56(9)(a)1r. 1r. “Commercial printing, except screen printing and book printing, without publishing, except grey goods printing” means activities described in 2012 North American Industry Classification 323111.

Tax 11.56(9)(a)2. 2. “Copies of the product” means finished artwork in a digital form that is generated, furnished, and used for the purpose of printing; represents the object, such as a book, catalog, pamphlet, or magazine, as it is to appear in a printed form; and includes files containing instructions or other information required by the printer for printing the product, such as instructions for plate-making or setting ink-levels at the printing press, whether these instructions or other information are furnished to the printer or derived by the printer from the finished art files.