Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
GROSS RECEIPTS TAX RULES
Rule 006.05.06-005-GR-56.2 - EXEMPTIONS FROM TAX - MANUFACTURING EXEMPTION - SPECIFIC BUSINESSES - NEWSPAPER PUBLISHERS

A. Machinery and equipment used directly in the manufacturing of a printed newspaper by newspaper publishers and printers will be exempt from the tax. In all events, the machinery and equipment purchased exempt from the tax and used for manufacture of a printed newspaper must comply with the requirements of GR-55.

B. "Newspaper" is defined to mean, a stated short interval publication usually daily or weekly in sheet form customarily printed on newsprint consisting of news, editorials, feature articles, and advertising intended for general circulation.

C. The manufacturing process of printed newspapers begins for purpose of this tax exemption when words are put into a network with typesetting and involves all the intermediate processes including actual printing of the paper and the assembling of the completed sections ready for single copy sale of a new edition. The process begins with typesetting which includes what is known in the newspaper trade as a "front-end system". The manufacturing process continues through the composition of type for news stories and advertising, pasting up of stories, photographs, headlines, the necessary camera work attendant to screening half tones, other illustrations, the enlargement or reduction of all elements and includes the assembly process completed either manually or electronically, the plate-making process involving producing full-page size negatives, the making of the offset plate or blanket and the printing of the paper. The manufacturing process is complete when the newspaper is fully assembled. This requires either hand inserting of the separate sections making up the complete newspaper or the use of automated inserting systems. Manufacturing includes sub-assembly work leading to completion of the finished newspaper. Machinery and equipment used in the post manufacturing elements are subject to taxation.

D. Items such as computers, digital cameras, scanners, video display terminals, computer hardware, printing presses, copiers, pasteup flats, waxing machines, bundle-tying machines and other machinery and equipment used directly in the above described manufacturing process of printing a newspaper and which otherwise comply with the requirements of GR-55 are not subject to tax.

E. Items such as repair or replacement parts, tools, supplies and other consumable parts and supplies are not exempt from the tax.