Works contract classification for customer-specific printed materials defeated sales tax treatment

Printed materials prepared to customer specifications were held to be a works contract rather than a taxable sale. The court applied the principle that where the goods produced have no independent marketability and the dominant intention is execution of work for a particular customer, the mere transfer of materials used in the process does not convert the transaction into a sale. On that basis, the proposed sales tax classification was unsustainable, and the Revenue's revision failed.

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Issues: Whether the supply of printed materials prepared to customer specifications was liable to sales tax as a sale, or was a works contract not exigible to tax.

Analysis: The transaction involved printing materials supplied according to the customer's requirements. The cited precedent was applied to hold that where the materials produced have no independent marketability and the dominant intention is execution of work for a particular customer, the transfer of materials used in the process does not by itself convert the contract into a sale. On that reasoning, the classification of the transaction as a taxable sale was unsustainable.

Conclusion: The transaction was treated as a works contract and not as a taxable sale, and the revision filed by the Revenue failed.

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