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Petitioner prints calendars, napkins, greeting cards, and
forms according to the specifications of its customers.
Petitioner orders the types of paper and supplies needed for
print jobs after receiving job orders. Petitioner does not
maintain a stock of paper or other materials because each job
requires paper of a different weight and finish. Usually when a
job is completed, any materials left over are scraps and are not
used for other jobs.2
On average, it takes 2 to 3 weeks from the time an order is
placed to complete the job and ship the order to the customer.
Petitioner holds title to (and bears the risk of loss of) the
supplies and printed goods until the final goods are shipped to
its customers. After the goods are shipped, the client is billed
for the order. Petitioner usually receives payment for an order
within 45 days of shipment.
A large portion of petitioner's work is done for one
customer, Suzy's Zoo Greeting Cards. For the taxable year ending
May 31, 1991, Suzy's Zoo Greeting Cards accounted for
approximately 70 percent of petitioner's accounts receivable at
the start of the taxable year and approximately 80 percent of the
accounts receivable at the end of the taxable year.
2 Petitioner usually donates the scraps to a school or
makes scratch pads out of the them.
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Last modified: May 25, 2011