Did in-depth research reports qualify as exempt periodicals when many reports were issued each year but only as customer needs arose?

Plain-English summary

During an audit of a redacted research publisher, staff determined that a redacted publication did not qualify as a periodical under Regulation 1590 because it was not issued at stated intervals no longer than three months. Out-of-State Auditing asked Legal whether it agreed.

The publisher issued 19 reports in 1976, 16 in 1977, and 14 in 1978. According to information it supplied, each edition consisted of “in-depth studies sent to (customers) regularly as the need indicates.” The live annotation adds that the studies covered subjects requested by customers; the linked memorandum does not say that.

California nevertheless concluded that the reports were not exempt periodicals. The problem was not the number issued. The publisher described the studies as being sent when customer needs indicated, rather than on a regular schedule.

Because the reports were not regularly issued at average intervals as former Revenue and Taxation Code section 6362(a) required, their sales were taxable.

Source and live-annotation limits

The official memorandum does not include the December 28, 1979 audit request, reports, subjects, customer requests or needs, issue dates or schedules, taxpayer information, sales, customers, prices, invoices, returns, audit workpapers or determination, payment, appeal, or later outcome. The taxpayer, publication, and listed identifier are redacted.

The live annotation says the research facility's in-depth analysis covered subjects customers requested; that detail is absent from the linked memorandum. It also warns, “Subsequent statutory changes re periodicals,” without identifying the changes. The live entry preserves the irregular-as-needed and taxable conclusions but omits the December 28 audit request, Regulation 1590 audit determination, exact annual counts, quoted section 6362(a), redactions, and source and outcome limits.

The official PDF's direct path is an established transport failure in this repository. A fresh exact-URL Sofya fetch on September 5, 2026 succeeded; its returned official text matched both the committed ca/.cdtfa_text_cache/385-0274.txt and this page's original-text section byte-for-byte.

What this means for you

Research publishers and tax professionals

Publishing more than four times per year did not by itself satisfy this historical periodical exemption. Preserve issue dates, advance schedules, editorial calendars, content, customer-demand records, and sales evidence, and check the later statutory changes flagged by CDTFA.

Common questions

Q: Were more than four reports issued each year?

A: Yes. The source lists 14 to 19 reports annually over three years.

Q: Why were they still taxable?

A: They were issued as needs arose, not regularly at average intervals.

Q: Did the subject matter of the studies decide the result?

A: No. The stated reason was the lack of regular issuance.

Q: Does CDTFA treat this 1980 result as current without qualification?

A: No. The live annotation expressly warns of subsequent statutory changes concerning periodicals.

Citations and references

• Former California Revenue and Taxation Code § 6362(a) — quoted
• California Sales and Use Tax Regulation 1590
• December 28, 1979 audit memorandum — described but not included
• Reports, customer and issue records, audit records, sales, tax records, and outcomes — described or implicated but not documented

Verbatim support

From the official Legal memorandum:

According to information supplied by the taxpayer, each edition consists of “in-depth studies sent to (customers) regularly as the need indicates.”

We would conclude that “S--- R---” is not “regularly issued at average intervals” as required by Section 6362(a). As such it does not qualify as an exempt “periodical” and tax will apply to its sale.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.0274
• Original supporting opinion: 385.0274 PDF

Original ruling text

State of California
Board of Equalization

Memorandum
385.0274

To: Mr. E. H. Bush March 3, 1980
Out-of-State Auditing

From: Mary C. Armstrong
Legal

Subject: The R--- I--- of A---, Inc.
SC --- XX XXXXXX

This is in response to your memorandum of December 28, 1979. You have requested our opinion as to the correct application of tax on a publication, “S--- R---,” which is published by the referenced taxpayer.

During the course of an audit of the taxpayer, it was determined that “S--- R---” did not qualify as an exempt periodical under Regulation 1590 since it is not issued “at stated intervals not exceeding three months.” You wish to know whether we agree with this determination.

As we understand it, “S--- R---” was issued 19 times in 1976, 16 times in 1977 and 14 times in 1978. According to information supplied by the taxpayer, each edition consists of “in- depth studies sent to (customers) regularly as the need indicates.”

Revenue and Taxation Code Section 6362(a) provides that tax does not apply to the sale of:

“tangible personal property which becomes an ingredient or component part of any newspaper or periodical regularly issued at average intervals not exceeding three months and any such newspaper or periodical.”

We would conclude that “S--- R---” is not “regularly issued at average intervals” as required by Section 6362(a). As such it does not qualify as an exempt “periodical” and tax will apply to its sale.

MCA:ba