1. (a)

   1. (1) Machinery and equipment used directly by a manufacturer in the printing process and that otherwise satisfies the requirements of 26 CAR § 30-1136, is exempt from tax.

   2. (2) For purposes of the manufacturing exemption, the printing process begins at the time a job is received in either electronic form or in the form of drawings or copy and includes all processes needed to convert the electronic form, drawing, or copy into printed material, including the following processes:

      1. (A) The initial typesetting and composition, producing a paste-up, combining photographs with words, making page makeups and taking pictures of them, making proofs and paper for editing, producing negatives for plate-ready films, producing an image carrier installed on a printing press, or equivalent prepress technology employed to produce an image carrier, and the bindery/finishing stage; or
      2. (B)

2. (i) Using computers, scanners, proofers, typesetters, photographic equipment, film processors, and direct-to-plate equipment exclusively in performing any of the processes listed in subdivision (a)(2)(A) of this section, above.

   1. (ii) Manufacturing printed material does not include using computers, scanners, and the other equipment listed to design, write, or compose an original item or document to be printed.

3. (b)

   1. (1) “Typesetting” includes converting images into standardized letter forms of a certain style, which usually are hyphenated, justified, and indented automatically by means of machinery and equipment.
   2. (2) Typesetting machinery and equipment includes fonts, video display terminals, tape and disc making equipment, computers, and typesetters that are interconnected to operate essentially as one (1) machine.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. §§ 26-52-402; 26-53-114"