Is photo processing equipment used by a pharmacy's photo department — cameras, enlargers, darkroom equipment, film, chemicals — exempt from Texas sales tax as manufacturing equipment?

Plain-English summary

A business asked the Comptroller whether photo processing equipment and supplies used by a pharmacy's photo department are taxable.

The Comptroller ruled that a photo processor is considered to be printing or imprinting tangible personal property for sale, which qualifies it as a manufacturer under Tax Code § 151.318. That opens up the prepress exemption in § 151.318(t): pre-press machinery, equipment, and supplies — including computers, cameras, film, film-developing chemicals, veloxes, plate-making machinery, plate metal, litho negatives, color-separation negatives, proofs, production artwork, and typesetting/composition proofs necessary to and used in connection with the printing process — are exempt. However, the letter flags a limit: § 151.318(c) makes certain items taxable to manufacturers generally, including janitorial supplies, transportation equipment, and hand tools, and that carve-out applies to photo processors too — the manufacturing-exemption qualification doesn't cover everything a photo processor buys.

What this means for you

Photographers, photo processors, and pharmacies with photo departments

If you process film or photos for sale, you likely qualify as a manufacturer under § 151.318, which exempts your core prepress equipment and supplies — cameras, film, developing chemicals, enlargers, and darkroom equipment used in the printing/processing itself. But don't extend that exemption to general janitorial supplies, transportation equipment, or hand tools used in your operation — those stay taxable under § 151.318(c) even for a qualifying manufacturer.

Accountants and tax professionals

This letter confirms photo processing sits within the same § 151.318(t) prepress exemption framework that applies to printers and publishers more broadly (see also 9910816L on printer/publisher equipment from the same period), while reinforcing that § 151.318(c)'s taxable-items carve-out is a separate, always-applicable limit on the manufacturing exemption generally.

Common questions

Q: Does a pharmacy's photo processing equipment qualify for the manufacturing exemption?
A: Yes — a photo processor is treated as printing/imprinting TPP for sale and qualifies as a manufacturer, making prepress equipment and supplies exempt under § 151.318(t).

Q: Are ALL of a photo processor's purchases exempt as manufacturing equipment?
A: No — items made specifically taxable to manufacturers under § 151.318(c), such as janitorial supplies, transportation equipment, and hand tools, remain taxable.

Q: What specific items are covered by the prepress exemption?
A: Computers, cameras, film, film-developing chemicals, veloxes, plate-making machinery, plate metal, litho negatives, color-separation negatives, proofs, production artwork, and typesetting/composition proofs necessary to the printing process.

Citations and references

Statutes:

• Tex. Tax Code § 151.318 (manufacturing exemption, generally)
• Tex. Tax Code § 151.318(t) (prepress machinery, equipment, and supplies exemption)
• Tex. Tax Code § 151.318(c) (items taxable to a manufacturer: janitorial supplies, transportation equipment, hand tools, etc.)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9910799L

Original ruling text

October 17, 1999

Dear **:

Thank you for your letter concerning the taxability of photo processing equipment used by a pharmacy.

You ask if the supplies relative to the processing and sale of photo processing are taxable.

As a photo processor, you are considered to be printing or imprinting tangible personal property for sale. You qualify for exemptions as a manufacturer under Section 151.318 of the tax code concerning manufacturers. In addition to the other items exempted for manufacturers, Section 151.318 (t) allows an exemption for pre-press machinery, equipment, and supplies, including computers, cameras, film, film developing chemicals, veloxes, plate-making machinery, plate metal, litho negatives, color separation negatives, proofs of color negatives, production art work, and typesetting or composition proofs, that are necessary and essential to and used in connection with the printing process. Please note that Section 151.318 (c) addresses items that are taxable to a manufacturer including janitorial supplies, transportation equipment, hand tools, etc.

Several publications and other items of interest (including the Texas Tax Code) are also available on our web page .

This opinion is based on the facts presented. If there are additional or different facts, the opinion may change. You may call me toll free at 1-800-531-5441, ext. 5-0613. The direct line is 512/475-0613. You may also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Kevin Koller
Tax Policy Division