Did a monthly California Appaloosa Association catalog of horses available at auction qualify as an exempt periodical?

Plain-English summary

The California Appaloosa Association issued a monthly catalog to members and other interested people. The linked memorandum's subject line calls it a “Monthly horse-auction catalog”; the live annotation adds that it listed horses currently available for sale at auction.

California concluded that the catalog was not an exempt periodical. Historical Ruling 50 expressly excluded catalogs from the periodical definition, even when issued regularly at intervals no longer than three months to a particular organization or reader group.

The association's sales of the catalogs to others therefore were taxable.

Source and live-annotation limits

The official PDF does not include the April 26, 1966 compliance memorandum, catalog or issues, horses or auction listings, association or member records, amended Ruling 50, sales, customers, prices, invoices, returns, audit or assessment, or later outcome. It supplies no specific transaction and labels the association subject “Indefinite.”

The live annotation says the catalog listed horses currently available at auction and cites Regulation 1590. Neither detail appears in the linked memorandum, which instead applies Ruling 50. The live entry omits the April 26 request, association members and interested parties, Ruling 50's March 9, 1966 amendment date, stated-interval and group-interest discussion, association-sales conclusion, missing materials, and source and outcome limits.

What this means for you

Auction organizations, catalog publishers, and tax professionals

A regular monthly schedule and specialized readership do not necessarily overcome a rule that separately classifies catalogs. Preserve the publication, issue schedule, contents, readers, sales, and tax records needed to apply current catalog provisions.

Common questions

Q: Was the catalog issued regularly?

A: Yes, monthly.

Q: Why did it fail the periodical exemption?

A: The historical rule expressly excluded catalogs.

Q: What sales were taxable?

A: The association's sales of the catalogs to others.

Citations and references

• Former California Sales and Use Taxes Ruling 50, as amended March 9, 1966
• California Sales and Use Tax Regulation 1590 — cited by the live annotation, not the supporting memorandum
• April 26, 1966 Marysville compliance memorandum — described but not included
• Catalog, ruling copy, membership and sales records, tax records, and outcomes — described or implicated but not documented

Verbatim support

From the official Tax Counsel memorandum:

Since the ruling specifically states that the term periodical does not include catalogs, it is our opinion that the publication of the aforementioned catalogs would not constitute an exempt "periodical" as defined in the ruling, notwithstanding the fact such catalogs may be regularly issued at average intervals not exceeding three months to a particular organization or group of persons.

Accordingly, tax should apply to the sales of such catalogs by the California Appaloosa Association to others.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.0260
• Original supporting opinion: 385.0260 PDF

Original ruling text

385.0260

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

3006 Monthly horse-auction catalog.

July 14, 1966

To:

Marysville - Compliance

From:

Tax Counsel (EDM) - Headquarters

Subject:

California Appaloosa Association - Indefinite

This is in reply to your memorandum of April 26, 1966, in which you ask for our opinion on whether the California Sales and Use Tax Law applies to a published catalog issued monthly by the California Appaloosa Association to its members and other interested parties. As indicated in sales and use taxes ruling 50, as amended March 9, 1966, the tax does not apply with respect to newspapers and periodicals regularly issued at average intervals not exceeding three months. The term "periodical" as used herein is limited to those publications which appear at stated intervals, each issue of which contains news or information of general interest to the public, or to soma particular organization or group of persons. Since the ruling specifically states that the term periodical does not include catalogs, it is our opinion that the publication of the aforementioned catalogs would not constitute an exempt "periodical" as defined in the ruling, notwithstanding the fact such catalogs may be regularly issued at average intervals not exceeding three months to a particular organization or group of persons. Accordingly, tax should apply to the sales of such catalogs by the California Appaloosa Association to others.

EDM: em