RETAIL SALES TAX -- SALES TO STATE OF WASHINGTON -- SALES TO STATE PRINTER

RETAIL SALES TAX -- SALES TO STATE OF WASHINGTON -- SALES TO STATE PRINTER

Retail Sales Tax should be paid by the State Printer upon the charge made for printing work done for it by private firms on contract therewith, said work being for use of State Departments.

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                                                                 January 27, 1950

C. Ellington
Public Printer
State Printing Plant
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 208

Dear Sir:

            You have requested our opinion on the following question:

            Should the State Printer pay Retail Sales Tax upon the charge made for printing work performed for it by outside firms, said work being on requisition from another state department and to be furnished thereto?

            Our conclusions may be summarized as follows:

            Retail Sales Tax should be paid by the State Printer upon the charge made for printing work done for it by private firms pursuant to contract therewith, said work being for the use of the State of Washington pursuant to a requisition of a department thereof.

                                                                     ANALYSIS

            Section 16 of the Revenue Act of 1935, [Chapter 180, Laws of 1935], as last amended by section 4, Chapter 228, Laws of 1949 [sec. 8370-16 Rem. Supp. 1949], imposes a tax on each retail sale in this state equal to 3% of the selling price.  By section 21, as last amended by section 6, Chapter 228, Laws of 1949 [sec. 8370-21 Rem. Supp. 1949], it is provided that the sales tax shall be paid by the buyer to the seller and by the latter remitted to the Tax Commission.  Retail sales to the State of Washington are not exempt  [[Orig. Op. Page 2]] from payment of the retail sales tax, the State being expressly included as a "buyer" by section 17(c), as last amended by section 4, Chapter 249, Laws of 1945 [sec. 8370-17 Rem. Supp. 1945].

            The real question which arises is whether or not the transaction between the state printer and the private printing concern is a "sale" within the meaning of the Revenue Act.  You state in your letter that you "farm out" the work that you are not equipped to handle, that you "simply hire them to do this work."  However, you have also informed us that this work is done by private printing concerns on contract through competitive bids wherever possible, and that the work is done by these concerns without supervision by you but in accordance with instructions passed on.  We understand that the paper and other stock is usually purchased by the private printing concern or is obtained by them from a supply house and charged to you.  In no case is the stock furnished by you directly to the private printer.

            From the facts above stated, we must conclude that the contract entered into by you and private printing concerns is not one of employment, but is strictly a contract of sale.  The word "sale" is defined in section 5(c), as last amended by section 2, Chapter 228, Laws of 1949 [Sec. 8370-5 Rem. Supp. 1949], to mean:

            "* * * any transfer of the ownership of, title to, or possession of property for a valuable consideration and includes any activity classified as a 'sale at retail' or 'retail sale' under subsection (d) of this section.  * * *"

            The term "sale at retail" is defined to include expressly the charge made for the property and services or labor rendered for printing.  We must conclude that the contract by which the printing is let out is a "sale" within the definitions thereof in the Revenue Act.

            It is also a "sale at retail" for it is not purchased for resale.  The sale to the State Printer is a sale to the State.  The delivery to the ordering department is not a resale of the property, but is merely a transfer between departments.  The state is the ultimate consumer of the property, and therefore, the sale to the State Printer is a "retail sale" subject to the Retail Sales Tax.

            It is our opinion that the State Printer must pay sales tax upon the charge made for printing work done under the facts as above set out.

Very truly yours,

SMITH TROY
Attorney General

C. JOHN NEWLANDS
Assistant Attorney General