Gross Sales from Pre-printed Wall Calendars by Printing Company Considered Subsequent Sales Subject to the 1 1/2% Tax

July 28, 1986 BIR RULING NO. 129-86 170 000-00 129-86 Gentlemen : This refers to your letter dated November 27, 1985, requesting a ruling as to whether the gross sales derived by your client in selling pre-printed wall calendars conceptualized, paper supplied and exclusively printed for your client by a domestic printing company are considered subsequent sales subject to the 1 1/2% tax imposed by Revenue Regulations No. 1-86 implementing P.D. No. 2006. In reply, please be informed that your query is answered in the affirmative. Subsequent sale means the sale, barter, exchange, transfer or similar transaction for nominal or valuable consideration intended to transfer ownership of or title to any domestically acquired article where such article has not undergone any further processing or transformation. (Sec. 2(b), Revenue Regulations No. 1-86) There is no doubt that your client, under the foregoing facts, acquired domestically the aforesaid calendars from the printer. However, if your client furnishes the printing company the required paper stock from the local paper dealer, have the calendar printed on them and sell the finished wall calendar, your client is considered a manufacturer of calendar subject to the 20% sales tax imposed by Section 165(A)(2) of the Tax Code, as amended by P.D. No. 1994. On the other hand, the printing company shall be subject to the 4% contractor's tax based on the gross receipts/payments by your client consisting of the cost of paper and the labor. If your client furnishes the paper stock, the 4% contractor's tax shall be based only on the cost of labor rendered pursuant to Section 170 of the Tax Code, as amended. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner