TAX NEWS - April 2009

Job Printing - Arizona Tax

To better serve you, the Arizona Department of Revenue now offers online assistance and filing of your business taxes. To file your taxes online or to register to use the website, go to www.aztaxes.gov.

This publication provides general information about transaction privilege tax (TPT) on job printing. The Arizona transaction privilege tax is commonly referred to as a sales tax; however, the tax is on the privilege of doing business in Arizona and is not a true sales tax.

For complete details, refer to the Arizona Revised Statutes and the Arizona Administrative Code. In case of inconsistency or omission in this publication, the language of the Arizona Revised Statutes and the Arizona Administrative Code will prevail.


Who Must Pay

Anyone in the business of job printing, engraving, embossing, or copying is subject to the transaction privilege tax under the job printing classification.


What Is Taxable?

The business of job printing includes pre-press composition activities such as typesetting, stripping, graphic artwork, color separation, and layout as well as post-press activities such as binding and mailing.

Sales of materials and supplies such as pens, tools or paper upon which no printing, embossing, engraving or copying has been performed are subject to tax under the retail classification. (See Publication 602, Retail Sales.)


What is the Tax Rate on Job Printing, and How Do I Pay?

The current combined state and county tax rates for the job printing classification can be found in the Arizona State, County and City Transaction Privilege and Other Tax Rate Tables under business class code 010. Many cities impose their own tax rates. "Program cities" have the state collect their taxes using the state form, the Transaction Privilege, Use and Severance Tax Return (Form TPT-1). Most of the larger cities license and collect privilege tax independently of the state and are called "non-program" cities. If you are unsure whether your city collects its own tax or if the state collects for it, check the Arizona State, County and City Transaction Privilege and Other Tax Rate Tables.

NOTE: For ease of reporting, state and county rates are combined on the state's tax rate tables. City tax is reported separately. See Form TPT-1 instructions for details.


Factoring Transaction Privilege Tax

When a business "factors" transaction privilege tax, it means the tax is included in the total price rather than shown as a separate charge. If you choose to factor the tax, the tax must be calculated using a factoring formula. There are many different factoring formulas depending on city taxes, county taxes or differences in allowable city tax deductions. See Arizona Transaction Privilege Tax Procedure TPP 00-1 for information about factoring.


Common Deductions

1. Gross income from sales to a person in Arizona who has an Arizona transaction privilege tax license & who:
a. resells the job printing, engraving, embossing or copying; or
b. distributes the job printing, engraving, embossing or copying without consideration in connection with the publication of a newspaper or magazine.

2. Sales for use outside this state if the materials are shipped or delivered out of this state.

3. Sales of tangible personal property to qualified nonprofit hospitals.

4. Sales of tangible personal property to qualified nonprofit health care organizations if the tangible personal property is used by the organization solely to provide health and medical related educational and charitable services.