Was a weekly pension-advocacy newsletter an exempt periodical, and did the printer make a retail sale?

Plain-English summary

An unnamed inquirer asked about the exempt status of a weekly newsletter printed by an unidentified firm for an unidentified corporation. California treated sample issues then “in the file” as newspapers or periodicals under former Ruling 50. Those samples are not published.

Separately and without relying on the publication's exempt status, the printer apparently did not make the retail sale because the corporation appeared to resell the newsletter. That conclusion rested on an absent subscription form. The corporation's purpose was advocating pension plans, but that fact did not justify treating the purported subscription price as a political donation or the newsletter as a giveaway.

The source uses tentative terms—“does not appear,” “apparently,” and “purported”—and includes no printing or subscription amounts, completed transactions, or outcome.

Later authority and source limits

A February 5, 2002 official staff email published with Annotation 385.0920 warns that, under then-current section 6362.7 and Regulation 1590, periodicals were no longer exempt unless sold by subscription and delivered by mail or common carrier, or covered by another exemption such as nonprofit distribution. This later warning does not alter the independent apparent-resale reasoning, but the record supplies no current exemption or delivery facts.

The official 385.1160 PDF does not include the inquiry, weekly newsletter or sample issues, publication or delivery schedule beyond “weekly,” corporation or pension-plan advocacy records, printer identity, printing agreement or invoice, subscription form, subscribers, subscription terms or prices, payments, resales, political donations, returns, resale documentation, tax calculations or payments, audit, assessment, claim, appeal, or outcome. The inquirer, firm, corporation, subscribers, transactions, and amounts are redacted or unidentified.

The source prints retai1 with the numeral one. The original-text section preserves that form rather than silently correcting the official record.

The live annotation preserves weekly publication, the corporation's pension-plan advocacy, and an exempt conclusion. It conflicts with the source by dating the item August 21 rather than July 21. It omits the inquiry and printer, sample-issue basis, newspaper-or-periodical wording and Ruling 50, independent apparent-resale analysis, subscription form, subscription-price-versus-donation issue, tentative language, later 2002 warning, missing records, redactions, source form, and absent outcome.

What this means for you

Advocacy publishers, subscription organizations, printers, and tax professionals

Analyze publication status separately from resale. Preserve every issue, schedule and delivery record, advocacy and organization records, printing agreement and invoices, subscription form and terms, subscriber payments, resale documentation, donation records, returns, tax calculations, and payments.

Common questions

Q: Did the newsletter qualify under Ruling 50?

A: Yes.

Q: Did the printer appear to make a retail sale?

A: No. The subscription form indicated that the corporation resold the newsletters.

Q: Did pension advocacy make the subscription price a donation?

A: No, not on the facts described.

Q: Were the sample issues and subscription form published?

A: No. The opinion says they were in the file but does not reproduce them.

Q: Which issue date controls?

A: The supporting opinion's formal July 21, 1950 date; the live annotation's August 21 date remains an unresolved conflict.

Citations and references

• Former California Sales and Use Tax Ruling 50
• California Revenue and Taxation Code § 6362.7 and Regulation 1590 — discussed in the February 5, 2002 staff email published with Annotation 385.0920
• Inquiry, sample issues, subscription form, printing and subscription transactions, resale and donation records, tax records, and outcome — described or implicated but not documented

Verbatim support

From the official Board staff opinion:

Without regard, however, to the exempt status of this publication, it does not appear that the printer makes a retai1 sale of the news letter as they are apparently resold by the corporation for whom they are printed, as indicated by the subscription form.

The mere fact that the corporation which publishes the news letter is organized for the purpose of advocating various pension plans does not appear to justify a conclusion that the news letter is given away and that the purported subscription price is in reality a donation for political purposes.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.1160
• Original supporting opinion: 385.1160 PDF

Original ruling text

385.1160

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

July 21, 1950

You have inquired as to the exempt status of a weekly news letter printed by this firm for the
_____.
You are advised that we regard the news letter, sample issues of which are in the file, as newspapers or periodicals within the meaning of Ruling 50. Without regard, however, to the exempt status of this publication, it does not appear that the printer makes a retai1 sale of the news letter as they are apparently resold by the corporation for whom they are printed, as indicated by the subscription form. The mere fact that the corporation which publishes the news letter is organized for the purpose of advocating various pension plans does not appear to justify a conclusion that the news letter is given away and that the purported subscription price is in reality a donation for political purposes.

RGH