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 NoteExample: Company Z purchases paper that is used to print catalogs that are designed to advertise and promote the sale of Company Z’s merchandise. The paper is delivered to Company X, a Wisconsin printer, that prints the catalogs for Company Z. The catalogs are shipped both in and outside Wisconsin. The charge by Company X to Company Z for the printing of the catalogs is not taxable. However, Company Z owes tax on its purchase of the paper that it provides to Company X for those catalogs that are not shipped outside Wisconsin for use solely outside Wisconsin. Company Z’s purchase of the paper for those catalogs that are shipped outside Wisconsin is exempt as provided in par. (b).
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 NoteExample: 1) A retailer purchases color separations which are used in its own printing plant to produce advertising material it distributes to its customers in Wisconsin. The sale of the color separations is subject to Wisconsin sales or use tax because the advertising materials manufactured are not destined for sale.
Tax 11.56 Note2) Company B purchases finished artwork from an advertising agency. The artwork and paper are provided to a printer who will print flyers that are not catalogs for Company B. The flyers are provided without charge to customers in Wisconsin. The charge by the advertising agency to Company B is subject to Wisconsin sales and use tax. The exemption under s. 77.54 (2), Stats., does not apply because the printer is not selling tangible personal property or an item, or property under s. 77.52 (1) (b) or (c), Stats., and the exemption under s. 77.54 (43), Stats., does not apply because the flyers are used in Wisconsin. 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)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. Tax 11.56(9)(a)8m.8m. “Support activities for printing” means activities described under 323120 of the North American Industry Classification System. Tax 11.56(9)(b)(b) Exemptions. Section 77.54 (61), Stats., provides exemptions for purchases of tangible personal property described under s. 77.54 (61) (a) and (b), Stats., by a person primarily engaged in commercial printing, book printing, or support activities for printing, as determined by the department. Tax 11.56(9)(b)1.1. Commercial printing, except screen printing and book printing, without publishing, except gray goods printing. Tax 11.56(9)(b)2.2. Printing or printing and binding books and pamphlets without publishing. Tax 11.56(9)(b)3.3. Performing prepress and postpress services in support of printing activities. Tax 11.56 NoteExamples: (1) Newspaper publishes a daily edition of a newspaper. Newspaper operates its own printing plant. The printing plant prints Newspaper’s publications as well as printing under contract for third parties. More than 50 percent of Newspaper’s sales are from sales of its newspaper and advertising revenues associated with sales of its newspaper. Newspaper’s primary activity is described by NAICS code 511110: Newspaper Publishers. Newspaper does not qualify for the exemptions under s. 77.54 (61), Stats. Tax 11.56 Note(2) Insurance Company operates its own printing plant. Insurance Company’s primary source of revenues is insurance premiums. Insurance Company’s primary NAICS code is described within NAICS subsector code 524: Insurance Carriers and Related Activities. Insurance Company does not qualify for the exemptions under s. 77.54 (61), Stats. Tax 11.56 Note(3) Business is engaged in screen printing of T-shirts, caps, and jackets. This is Business’ only activity and source of revenue. Business’ primary activity is described by NAICS code 323113: Commercial Screen Printing. Business does not qualify for the exemptions under s. 77.54 (61), Stats. Tax 11.56 Note(4) Company is primarily engaged in the business of printing on fabric grey goods. Company’s primary activity is described by NAICS code 313310: Textile and Finishing Mills. Company does not qualify for the exemptions under s. 77.54 (61), Stats. Tax 11.56 Note(5) Printer is primarily engaged in commercial printing as described in NAICS code 323111. Company B contracts with Advertising Agency to produce finished artwork that represents Company B’s holiday catalog and to furnish the finished artwork to Printer in the formats specified by Printer. Company B contracts with Printer to print and mail the catalogs to addresses Company B furnishes to Printer. Printer uses the finished artwork in the printing of the catalog. Printer owns servers that it uses primarily to store the finished artwork it receives from its customers. The servers are exempt under s. 77.54 (61), Stats. Tax 11.56 Note(6) Printer is primarily engaged in commercial printing and binding of books, as described in NAICS code 323117. Publisher enters into a contract with Printer to print and bind one of Publisher’s books. Publisher provides Printer with the finished artwork files in the formats specified by Printer. Printer has computer programs that translate the finished artwork files into files that are sent to and used by a plate-making machine to make the plates for printing the book, and into files that are sent to and used by the printing press to print the pages in the book. The computers and server used by Printer to store Publisher’s finished artwork are primarily used by Printer to store copies of products printed or to be printed by Printer. The computers and servers used to store the finished art furnished to Printer by Publisher are exempt under s. 77.54 (61), Stats. Tax 11.56 Note(7) Printer has printing plants in Wisconsin and Minnesota. Printer places an order for office supplies from an out-of-state seller. The office supplies are delivered to Printer’s location in Wisconsin. The office supplies are to be used in Printer’s offices in Wisconsin and Minnesota. Printer sets aside the office supplies it will deliver to its Minnesota office, and delivers these supplies to that office one week later. During the week the office supplies being sent to Minnesota are in Wisconsin and prior to being delivered to Minnesota, the office supplies were only stored, remained idle, and were not used by Printer. Printer’s purchase of the office supplies delivered to it in Wisconsin and then delivered by Printer to its office in Minnesota are exempt under s. 77.54 (61), Stats. Tax 11.56 Note(8) Printer has printing plants in Wisconsin, Iowa, and Indiana. Printer is primarily engaged in activities described by NAICS code 323111. Printer is moving a printing press from its Indiana plant to its Iowa plant. The printing press was originally purchased by Printer in Indiana. The printing press is used exclusively and directly by Printer in manufacturing. Printer has the printing press shipped to its Wisconsin facility. The press is in Wisconsin for not more than 180 days before it is transported to Iowa. While in Wisconsin, Printer performs repairs to the press. Printer’s purchase of the printing press is not subject to Wisconsin use tax. Repair of the printing press while in Wisconsin is a use of the printing press in Wisconsin by the printer. However, Printer is not liable for Wisconsin use tax on its purchase of the printing press as the printing press is an exempt manufacturing machine under s. 77.54 (6) (am) 1., Stats. Tax 11.56 NoteNote: Section Tax 11.56 interprets ss. 77.51 (7h), (8), (11), and (14) (h), 77.52 (1) and (2) (a) 11., and 77.54 (2), (2m), (6) (am) 1. and 2., (25), (25m), (30) (a) 6., (43), (59), and (61), Stats.