01.
In General. Tax applies to
charges for producing, fabricating, processing, printing, imprinting, or the
engraving of tangible personal property for a consideration, whether consumers
furnish either directly or indirectly the materials used in the producing,
fabricating, processing, printing, imprinting, or engraving. (3-31-22)
a. Example 1: An owner purchases cabinets
from a cabinetmaker to be made according to specifications furnished by the
owner. The cabinetmaker delivers the cabinets to the owner who installs them
himself. A sales tax will be collected by the cabinetmaker from the owner
measured by the entire sales price. (3-31-22)
b. Example 2: An owner purchases material, on
which he pays a sales tax, which he delivers to a cabinetmaker. The
cabinetmaker uses this material to manufacture cabinets for the owner according
to specification. These cabinets are delivered to the owner and an agreed price
is paid for the work done by the cabinetmaker. A sales tax will be collected
from the owner, measured by the entire price charged by the cabinetmaker.
(3-31-22)
c. Example 3: An
individual takes a plaque, on which sales tax has been paid, to an engraver and
requests the plaque be engraved with an inscription. The total price paid for
the engraving is taxable. (3-31-22)
d. Example 4: A club purchases trophies from
a retailer and requests that the trophies be engraved with individual names.
The trophies are engraved and delivered for an agreed price. The measure of the
sales tax is the price of the trophies plus the engraving charge.
(3-31-22)
e. Example 5: An
individual takes a beef to a packing plant and requests that the meat be
processed by cutting, wrapping, and freezing the meat to the buyer's
specification. The total price paid for this processing is taxable.
(3-31-22)
f. Example 6: A hunter
takes a deer to a business which processes smoked meats. Although the material
consumed in the smoking process may be minimal, the entire price paid for this
processing is taxable. (3-31-22)
02.
Repairing and Reconditioning
Distinguished. Producing, fabricating, and processing includes any
operation which results in the creation or production of tangible personal
property or which is a step in a process or series of operations resulting in
the creation or production of tangible personal property. The terms do not
include operations which do not result in the creation or production of
tangible personal property or which do not constitute a step in a process or
series of operations resulting in the creation or production of tangible
personal property, but which constitute merely the repair or reconditioning of
tangible personal property to refit it for the use for which it was originally
produced. (3-31-22)
03.
Cross-References. (3-31-22)
a.
Repairs and Renovation of Tangible Personal Property. See Rules
011 and
062 of these rules.
(3-31-22)
b. Fabrications by
Contractors. See Rule
012 of these rules.
(3-31-22)
