Tax Type
Retail Sales and Use Tax
Description
Minilab photofinishing system
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
11-20-1989
November 20, 1989
Re: Request for Ruling/ Sales and Use Tax
Dear***************
This will reply to your letter of May 17, 1989, seeking a ruling on the correct application of the sales and use tax to the sale of photographic processing equipment. We regret the delay in providing you a response to your inquiry.
Facts
**************** ("the Taxpayer") sells photographic processing machines designated as the QSS System (Quick Service (System). The QSS System is a quick photofinishing system which may serve as a minilab or as a system designed specifically for commercial or wholesale labs. The Taxpayer requests a ruling on the applicability of the industrial processing exemption and the manufacturers' exemption certificate (Form ST-11) to purchases of such equipment by its customers.
RULING
By the enclosed Commissioner's Ruling dated April 22, 1986, the department determined that the processing of customer furnished film is deemed industrial in nature for purposes of the industrial manufacturing exemption. However, in the event that the photo processing is incidental to the operation of a photography studio, camera shop, or similar business, the exemption would be denied.
Accordingly, the Taxpayer may sell its equipment exempt of sales and use tax under the industrial processing exemption to purchasers who process film furnished to customers, provided such processing is not secondary in nature to the operation a retail or service business. Purchasers who qualify for the industrial processing exemption must provide the Taxpayer with a properly completed Form ST-11.
I hope this information has answered your questions,. however, please contact the department if you have additional questions or if we may be of any further assistance.
Sincerely,
W. H Forst.
Tax Commissioner
Rulings of the Tax Commissioner