Printing and Publishing Exemption

Qualifying for the production exemption

If you manufacture, process or fabricate goods that you’ll sell, you might qualify to buy some equipment and supplies without paying sales or use tax. Read more in our Production Exemption guide.

Historically, many printers qualified for this exemption because they primarily produced tangible personal property for resale. Tangible personal property means something you can feel, see and touch. Today, some printers primarily produce digital goods that aren’t tangible personal property. Those printers no longer qualify for the exemption.

Tangible property a printer produces

Examples:

Printed products
- Photographs
- Posters, flyers and printed promotional items
- Newspapers and magazines
Products sold on physical storage media
- Photographs on a portable storage drive
- Posters, flyers and other promotional materials on a secure digital card
- Magazines or newspapers on a thumb drive

Digital books are tangible personal property, no matter how the buyer accesses them or how they're delivered, if the buyer has a permanent right to use them.

Items a printer produces that aren’t tangible personal property

Examples:

Newspapers or magazines that are accessed online only
Digital photographs delivered electronically
Leased or rented digital products (leasing and renting are not a permanent right to use)
Information stored in and accessed only from an electronic medium — other than digital products (see above)

Printers that qualify for the production exemption

If more than 50% of your business operation is devoted to producing tangible personal property for sale, you can buy certain equipment and supplies exempt. You must primarily and directly use the necessary and essential equipment and supplies to produce tangible personal property for sale.

Separately operated business segment

A portion of your business might qualify for the production exemption if it’s a separately operated business segment that’s primarily printing products for resale. To qualify, you must keep separate accounting records for that business segment. This includes separately recording income, expenses, wages and assets of the business segment. You also must have employees primarily dedicated to operating the separate business segment.

Printers that don't qualify for the production exemption

If more than 50% of your business operation isn’t producing tangible personal property for sale, you don’t qualify for the production exemption. You must pay sales tax on all items you buy.

Example Your business primarily publishes a newspaper that's available only online and you charge your subscribers for access. Since you aren't creating tangible personal property for resale, you don't qualify for the production exemption.

Exceptions:

You buy an item that isn’t taxable (e.g., downloaded computer software).
You’ll resell the item.

Note Private printers usually print materials for their own use, including printing operations supporting their main business. Private printers that don't sell what they print don't qualify for the production exemption. They must pay tax on their equipment and all supplies used to make display signs, advertising brochures and other material used by their business.