Domestic Production Activities Deduction - printer

[KJ Judd]

My only two clients who may qualify for this deduction are fiscal year printers. So I'm starting to work through the information on this. I believing printing qualifies as Domestic Production Gross Receipts. What are your thoughts?

Also, if the company has no interest or dividends, I believe 100% of its receipts qualify to be Domestic Production Gross Receipts.

Has anyone claimed this deduction for a printer and have any pointers to share? Thanks!

[jainen]

There is a difference

There is a difference between a printer and a publisher. If the printer produces documents to order, the customer is probably the owner of those documents and the one who can take the deduction.

[OldJack]

There is a difference between a printer and a publisher.

Oh the other hand, substitute the printer with a construction Plumber and the Customer as the Rehab Property Owner. The Plumber gets the deduction. So what is different about the printer that is producing a product for the customer?

[jainen]

good point

>>what is different about the printer that is producing a product for the customer<<

That's a good point, and the answer is in the law itself. There is a special provision for construction firms that allows them to take the deduction even if they do not own the property produced.

[KJ Judd]

Printers are considered manufacturer's for several purposes in Wisconsin. And it is printing not publishing. They do letterhead, brochures, etc.

Jainen - do you have a cite in the law where I can read on printers not being eligible? (One of the problems of working as a true sole proprietor without any employees is I have no one to bounce takes on the new law off of.)

[jainen]

Certainly

>>Printers are considered manufacturer's<<

Certainly printers are manufacturers. The question for purposes of this deduction is, who OWNS what is produced. A publisher prints up a book and distributes it to bookstores and hopes somebody buys it. If nobody does, the publisher takes it back and nobody owes them anything. If a printer takes an order for, say, a church recipe book, but nobody buys it, the church is stuck with the overstock and they still have to pay the printer. Same with a company's annual report or a concert promoter's flyers or the sort of things printers produce as ordered by customers.

The same situation exists for machine shops that manufacture auto parts. There are some simlar examples in the regs and IRS reports surrounding this law, but you'll have to look them up.