Are hand-calligraphy charges taxable when the customer supplies the envelopes, and which calligraphy materials may be bought tax-free?

Plain-English summary

Hand calligraphy was taxable in the same way as mechanical custom printing. It changed the form or state of the paper, making it fabrication labor, and tax applied to the full invoice whether the customer supplied the envelopes or the calligrapher supplied the paper.

The calligrapher could buy ink, paper stock, glue, and other property tax-free when it became a component of or was coated or impregnated into the finished printed matter. Machinery, tools, and supplies that did not become part of the finished work remained taxable unless another exemption applied.

Common questions

Q: Is labor exempt when the customer supplies the envelopes?

A: No. Fabrication of customer-owned property was still a taxable sale, and calligraphy was taxable custom printing.

Q: Can pens and other tools be bought tax-free?

A: Not under the component-material rule. That rule covered property incorporated into or impregnated in the finished work.

Citations and references

• O.C.G.A. § 48-8-2(33)-(34) -- fabrication as a sale and sales price
• Ga. Comp. R. & Regs. r. 560-12-2-.37 -- fabrication labor
• Ga. Comp. R. & Regs. r. 560-12-2-.75(1) -- custom printing materials and supplies

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2014-03

Original ruling text

Date Issued:
Georgia Letter Ruling:
Topic:

June 6, 2014
LR SUT-2014-03
Fabrication

This letter is in response to your request for guidance on the application of Georgia sales and use tax to calligraphy
services.
Facts as presented by Taxpayer
Taxpayer is a home-based calligraphy business. Taxpayer addresses envelopes by hand using a dip pen and ink with
the customer supplying the envelopes. No calligraphy is performed by computer. Taxpayer pays tax on all supplies
either as sales tax at the time of purchase or remitted as use tax when sales tax is not charged at the time of purchase.
On occasion, Taxpayer supplies the paper on which the calligraphy is performed.
Issues
1.

Are charges for calligraphy service subject to the tax when the customer provides the paper stock?

2.

Are charges for calligraphy service subject to the tax when Taxpayer provides the paper stock?

3.

Can Taxpayer purchase tangible personal property used in providing its calligraphy services exempt from the
tax?

Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, storage,
use, or consumption of tangible personal property and on certain enumerated services. 1 “Retail sale” or “sale at
retail” means a sale of tangible personal property or taxable services to any person other than for resale. 2 “Sale”
means any transfer of title or possession, exchange, barter, lease, or rental, conditional or otherwise, in any manner,
by any means, of any kind of tangible personal property for a consideration. 3
“Sale” also means the fabrication of tangible personal property for consumers who directly or indirectly furnish the
materials used in such fabrication. 4 An operation which changes the form or state of the property is one of
fabrication. 5 Because calligraphy changes the form or state of the property on which it is performed calligraphy is
fabrication labor whether performed on dealer’s property purchased for resale or property provided by the purchaser.
The amount subject to tax is the “sales price”. “Sales price” means the total amount of consideration, including cash,
credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money,
whether received in money or otherwise without any deduction for the following:
(i) The seller's cost of the property sold;
(ii) The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller,
all taxes imposed on the seller, and any other expense of the seller;
(iii) Charges by the seller for any services necessary to complete the sale; and
(iv) Delivery charges. 6

1

O.C.G.A. §§ 48-8-1 and 48-8-30(a).
O.C.G.A. § 48-8-2(31).
3
O.C.G.A. § 48-8-2(33)(A) (1).
4
O.C.G.A. § 48-8-2(33).
5
Ga. Comp. R. & Regs. r. 560-12-2-.37.
6
O.C.G.A. § 48-8-2(34).
2

June 6, 2014
LR SUT-2014-03
Fabrication
Page 2 of 3

Custom printing is the production or fabrication of printed matter, in accordance with a customer's order or copy, for
the customer's use or consumption. 7 The sale of custom printing is the sale of tangible personal property and is
subject to sales and use tax imposed on the total invoice charge made on the transaction. The total invoice charge
includes the charge made for any engraved, lithoplated, or other type photoprocessed plate, die, or mat, involved in
the printing and includes the charge made for printing and imprinting when the customer furnishes the printing
stock. 8 Purchases by the printer of ink, printing stock, staples, stapling wire, binding twine, glue, and other tangible
personal property which become a component part of the printed matter, or are coated upon or impregnated therein,
are purchases of industrial materials and, when properly certificated, are not subject to sales and use tax. 9
Purchases by the printer of machinery, equipment, tools, replacement and repair parts, type, stock engraved, photoprocessed, lithoplated, or other types of plates, dies, or mats, and supplies, including blotting papers and drying
powders, which do not become a component part of the printed matter, or which are not coated upon or impregnated
therein, are purchases subject to the tax imposed by the Act. 10
Calligraphy is a manual form of printing and taxable in the same manner as printing produced by mechanical means.
Taxpayer is engaged in custom printing when performing calligraphy according to a customer's order. Thus,
Taxpayer’s charges for calligraphy are subject to the tax, which is computed on the total invoice charge. The total
invoice charge includes charges made by Taxpayer for any tangible personal property used in the calligraphy as well
as any charges made by Taxpayer for calligraphy when the customer furnishes the printing stock.
Taxpayer’s purchases of ink, printing stock, staples, stapling wire, binding twine, glue, and any other tangible
personal property that becomes a component part of the printed matter, are not subject to the tax. Taxpayer’s
purchases of any tangible personal property that is coated upon or impregnated into the printed matter are also not
subject to the tax.
Taxpayer’s purchases of tangible personal property which do not become a component part of the printed matter, or
which are not coated upon or impregnated into the printer matter, are subject to the tax unless otherwise exempt.
Rulings
Calligraphy is a manual form of printing and taxable in the same manner as printing produced by mechanical means.
Calligraphy performed according to a customer’s order is custom printing and subject to the tax whether performed
on paper stock provided by Taxpayer or paper stock provided by Taxpayer’s customer. Additionally, calligraphy is
taxable as fabrication labor.
Taxpayer’s purchases of ink, printing stock, staples, stapling wire, binding twine, glue, and any other tangible
personal property are not subject to the tax when the property becomes a component part of the printed matter.
Taxpayer’s purchases of any tangible personal property that is coated upon or impregnated into the printed matter
are also not subject to the tax. Taxpayer’s purchases of tangible personal property that does not become a component
part of the printed matter, or is not coated upon or impregnated into the printer matter, are subject to the tax unless
otherwise exempt.
1.

Charges for calligraphy are subject to the tax when the customer provides the paper stock on which the
calligraphy is performed.

2.

Charges for calligraphy are subject to the tax when the customer does not provide the paper stock on which the
calligraphy is performed.

7

Ga. Comp. R. & Regs. r. 560-12-2-.75(1)(a).
Ga. Comp. R. & Regs. r. 560-12-2-.75(1)(b).
9
Ga. Comp. R. & Regs. r. 560-12-2-.75(1)(e).
10
Ga. Comp. R. & Regs. r. 560-12-2-.75(1)(h).
8

June 6, 2014
LR SUT-2014-03
Fabrication
Page 3 of 3

3.

Taxpayer may purchase ink, printing stock, staples, stapling wire, binding twine, glue, and other tangible
personal property that becomes a component part of the printed matter, without payment of the tax. In addition,
Taxpayer may purchase tangible personal property that is coated upon or impregnated into the printed matter,
without payment of the tax.

The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances and taxpayer in question. Should the circumstances regarding the
transactions change, or differ materially from those represented, then this ruling may become invalid. In addition,
please be advised that subsequent statutory or administrative rule changes or judicial interpretations of the Statutes
or Rules upon which this advice is based may subject similar future transactions to a different tax treatment than that
expressed in this response.