Printing industry tax services
Grant Thornton provides tax advisory services to many of the top printers in North America. Our specialty services include transaction tax, property tax, credits and incentives, controversy and income tax services.
Arizona: Cooperative direct mail advertising is not subject to Arizona use tax
A taxpayer that is in the business of selling cooperative direct mail advertising is not subject to Arizona use tax. The court used both the dominant purpose test and the common understanding test to determine that the taxpayer was purchasing the services of designing, mailing and printing, and not tangible personal property. The court held that the taxpayer was primarily purchasing nontaxable printing and design services, and that the paper used for the coupons was only an incidental part of the transaction. In addition, the invoices for the transaction itemized and showed that the taxpayer was paying for design, printing and mailing services, noting that the paper, which was not separately stated on the invoice, was of little value to the taxpayer without the design.
Indiana: Direct mailers and postage charges subject to use tax
A taxpayer that provided its customers with a billing service did not pay sales tax on purchases of direct mailers and associated postage. As such, the taxpayer was liable for use tax on those purchases. The court found that the taxpayer’s invoices showed the cost of services and tangible personal property as a combined charge, which fell within the definition of a “unitary transaction.” A unitary transaction includes all items of personal property and services, furnished under a single order or agreement, for which a total combined charge or price is calculated. In addition, the taxpayer argued that the postage was paid up front and thus, was not a delivery charge. The court disagreed, holding that the use of a postage account was merely an administrative procedure used by the taxpayer and vendor. As a practical matter, the vendor paid the postal service, and the vendor was in turn paid by the taxpayer, which constituted a deliver charge. Thus, the court held that the taxpayer was liable for use tax on fees paid to direct mail vendors for direct mailers and delivery charges for the mailers. For details, please see Letter of Findings No. 04-20110367, Indiana Department of Revenue, Feb. 29, 2012.
Texas: Fresh Start amnesty program runs from June 12, 2012, through Aug. 17, 2012
On March 15, 2012, the Texas Comptroller of Public Accounts issued a notice to taxpayers announcing the Fresh Start amnesty program, which runs from June 12, 2012, through August 17, 2012. All state and local taxes and fees administered by the comptroller’s office are eligible for amnesty. Taxpayers who choose to participate in this program can avoid penalties and interest by filing or amending reports and paying overdue taxes. Reports that were originally due before April 1, 2012, are eligible to participate in the amnesty program. A taxpayer that has not filed a tax return, has underreported tax on a previously filed return or does not have a permit to report and remit Texas taxes will be eligible for the program. The amnesty does not, however, apply to filing periods that identified for or under an audit or investigation.
Ohio: General amnesty program started May 1, 2012, ends June 15, 2012
On June 30, 2011, Ohio Gov. John Kasich signed into law Ohio's 2012-13 budget bill (H.B. 153), which became effective Sept. 29, 2011. The bill includes a general tax amnesty program covering several Ohio tax types as well as a consumer use tax amnesty program. The newly adopted tax amnesty programs will be administered by the Ohio Department of Taxation, and should be considered in light of current voluntary disclosure programs that may be available. The general tax amnesty program runs from May 1, 2012, through June 15, 2012, while the consumer use amnesty program runs from Oct. 1, 2011, through May 1, 2013. Read more in our SALT Alert.
This website supports Grant Thornton LLP’s marketing of professional services, and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the subject of this document we encourage you to contact us or an independent tax advisor to discuss the potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this document may be considered to contain written tax advice, any written advice contained in, forwarded with, or attached to this document is not intended by Grant Thornton to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
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