Section R15-5-1102. Printer’s Sale of Printing

A.      Except as otherwise provided in subsection (F) or other appli- cable A.R.S. § 42-5066(B) exemptions, gross income or gross proceeds derived from all of a printer’s costs or expenses of filling a customer’s printing order are subject to tax under this Article. Examples of costs or expenses include charges for set- up, die cutting, embossing, folding, and binding operations.

B.       Gross income  or gross proceeds  derived  from an  Arizona printer’s sale of printing within Arizona are subject to tax even when the printer conducts the job printing, engraving, emboss- ing, or copying activity outside the state, unless the printing is shipped or delivered outside the state for use outside the state.

C.      If a printer ships or delivers printing to be used outside the state to a common carrier for transportation to a location out- side the state, the common carrier is deemed to be the agent of the printer for purposes of determining whether the printing has been shipped or delivered outside the state, regardless of who is responsible for payment of the freight charges.

D.      A printer may substantiate a shipment or delivery of printing outside the state by one of the following records:

1.        An internal delivery order that is supported by receipts for expenses incurred in delivery of printing and signed on the delivery date by the person who delivers the print- ing;

2.        A common carrier’s receipt or bill of lading;

3.        A parcel post receipt;

4.        An export declaration;

5.        A receipt from a licensed broker; or

6.        Proof of export or import, signed by a customs officer.

E.       Except  as  provided  in  subsection  (F)  or  other  applicable

A.R.S. § 42-5066(B) exemptions, gross income or gross pro- ceeds derived from an Arizona printer’s charges for the distri- bution of printing are generally subject to tax under this Article. In the absence of documentation listed in subsection

(D), it remains the taxpayer’s burden to substantiate that the gross income or gross proceeds derived from a sale of printing are not taxable because the printing is shipped or delivered