1. (a)

   1. (1) Machinery and equipment used directly in the manufacturing of a printed newspaper by newspaper publishers and printers will be exempt from the tax.
   2. (2) In all events, the machinery and equipment purchased exempt from the tax and used for manufacture of a printed newspaper must comply with the requirements of 26 CAR § 30-1136.
2. (b) “Newspaper” is defined to mean a stated short interval publication, usually daily or weekly, in sheet form customarily printed on newsprint consisting of news, editorials, feature articles, and advertising intended for general circulation.

3. (c)

   1. (1) The manufacturing process of printed newspapers begins for purpose of this tax exemption when words are put into a network with typesetting and involves all the intermediate processes including actual printing of the paper and the assembling of the completed sections ready for single copy sale of a new edition.
   2. (2) The process begins with typesetting, which includes what is known in the newspaper trade as a “front-end system”.

   3. (3) The manufacturing process continues through the composition of type for news stories and advertising, pasting up of stories, photographs, headlines, the necessary camera work attendant to screening half tones, other illustrations, the enlargement or reduction of all elements and includes the:

      1. (A) Assembly process, completed either manually or electronically;
      2. (B) Plate-making process involving producing full-page size negatives;
      3. (C) Making of the offset plate or blanket; and
      4. (D) Printing of the paper.

   4. (4)

      1. (A) The manufacturing process is complete when the newspaper is fully assembled.
      2. (B) This requires either:

4. (i) Hand inserting of the separate sections making up the complete newspaper; or

   1. (ii) The use of automated inserting systems.
   2. (5) Manufacturing includes subassembly work leading to completion of the finished newspaper.

   3. (6) Machinery and equipment used in the post-manufacturing elements are subject to taxation.

      1. (d) Items such as computers, digital cameras, scanners, video display terminals, computer hardware, printing presses, copiers, pasteup flats, waxing machines, bundle-tying machines, and other machinery and equipment used directly in the above described manufacturing process of printing a newspaper and that otherwise comply with the requirements of 26 CAR § 30-1136 are not subject to tax.
5. (e) Items such as repair or replacement parts, tools, supplies, and other consumable parts and supplies are not exempt from the tax.

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"