Did the weekly AD*LIB shopping guide qualify for exemption as a newspaper or periodical?

Plain-English summary

An unnamed requester's customer maintained that weekly AD*LIB was not taxable because it was a newspaper entered as second-class mail. The requester believed tax applied because the publication was not for resale and did not carry the required percentage or news. The March 19, 1969 request is absent.

Former section 6362 exempted property becoming an ingredient or component of a newspaper or periodical issued at average intervals no longer than three months. Tax Counsel T. P. Putnam said “newspaper” covered only publications commonly understood as newspapers; AD*LIB was not one for Sales and Use Tax Law purposes. Second-class mail status did not decide that classification.

The letter described a periodical as appearing at stated intervals, carrying general-interest news or information, and connecting issues through literary continuity, similar subject matter, and related articles. Former Ruling 50 excluded shopping guides or other publications whose advertising and product publicity exceeded 90 percent of an issue's printed area in more than half the issues during 12 months.

Although the sample was essentially a shopping guide, seven of its 24 pages listed television programs. Counsel treated that as general-interest information and concluded that AD*LIB qualified under section 6362, expressly assuming that other issues would carry similar nonadvertising material. No other issue, measurement record, tax amount, or outcome appears.

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. The live 385.1260 annotation continues to call AD-LIB exempt. The sources do not establish present treatment.

The official 385.1260 PDF does not include the March 19 request, sample or any other issue, publication and delivery schedules, customer or requester identity, second-class-mail record, newspaper evidence, content or advertising measurements, television listings, resale terms or documentation, printing agreement, prices or invoices, sales, returns, exemption documentation, tax calculations or payments, audit, assessment, claim, appeal, Ruling 50 enclosure, or outcome. The requester, customer, publisher, printer, buyers, transactions, and amounts are redacted or unidentified.

The source prints “purposes or the Bales and Use Tax Law,” “each issue or,” “90 percent or,” “[ruling 50,” “listings or television programs,” and “qualities for the exemption.” The original-text section preserves those forms rather than silently correcting the official record.

The live annotation preserves AD-LIB's not-a-newspaper and exempt-periodical conclusions, primary shopping-guide character, general-interest content, stated intervals, and date. It omits the request and competing customer/requester positions, weekly and second-class-mail facts, not-for-resale claim, section 6362 and complete periodical/advertising tests, Ruling 50, seven-of-24-page television-listing measure, conditional assumption about other issues, later 2002 warning, missing records, redactions, source forms, and absent outcome.

What this means for you

Shopping-guide publishers, printers, and tax professionals

Postal classification does not decide sales-tax classification. Preserve every issue, schedule and delivery record, content and advertising measurements, television listings, postal status, resale terms and documents, printing agreement, invoices, sales, returns, exemption records, tax calculations, and payments.

Common questions

Q: Was AD*LIB a newspaper?

A: No, according to the opinion.

Q: Why could it still qualify?

A: It appeared weekly and the sample devoted seven of 24 pages to television listings of general interest.

Q: Was the conclusion unconditional?

A: No. Counsel assumed that other issues would contain similar nonadvertising information.

Q: Did second-class mail status control?

A: No.

Q: Did the source review more than one issue?

A: No. The conclusion assumed that other issues carried nonadvertising information similar to the one sample.

Q: Did the letter decide the requester's resale concern?

A: No. It records the claim that AD*LIB was not for resale but does not analyze or resolve it.

Citations and references

• Former California Revenue and Taxation Code § 6362
• Former California Sales 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
• March 19 request, sample and other issues, postal and resale records, content measurements, transactions, tax records, and outcome — described or implicated but not documented

Verbatim support

From the official Tax Counsel letter:

Your customer maintains that "AD*LIB" is not subject to sales tax because it is considered a newspaper and is entered as such as second class mail in the post office.

Although the publication is essentially a shopping guide, seven of the 24 pages of the sample issue with which you provided us are devoted to listings or television programs.

Assuming that other issues of the publication will carry similar non-advertising information, we think that "AD*LIB" qualities for the exemption provided by section 6362.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.1260
• Original supporting opinion: 385.1260 PDF

Original ruling text

385.1260

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

April 30, 1969

Attention:

Gentlemen:

Re:

This is in reply to your letter of March 19, 1969, in which you request our opinion as to the application of the Sales and Use Tax Law to the publication, "ADLIB." Your customer maintains that "ADLIB" is not subject to sales tax because it is considered a newspaper and is entered as such as second class mail in the post office. You think tax is applicable because the publication is not for resale nor, in your opinion, does it carry the required percentage or news. The publication is issued weekly. Section 6362 of the Revenue and Taxation Code exempts from the tax tangible personal property which becomes an ingredient or component part of any newspaper or periodical regularly issued at average intervals not exceeding three months. The term "newspaper" as used in section 6362 is limited to those publications which are commonly understood to be newspapers. In our opinion "ADLIB" is not a newspaper for purposes or the Bales and Use Tax Law. The term "periodical," however, includes those publications which appear at stated intervals, each issue or which contains news or information of general interest to the public or to some particular organization or group of persons. Each issue must bear a relationship to prior or subsequent issues in respect to continuity of literary character or similarity of subject matter, and there must be some connection between the different issues or the series in the nature of the articles appearing in them. The term does not include shopping guides or other publications of which the advertising portion, including product publicity, exceeds 90 percent or the printed area of the entire issue in more than one half of the issues during any 12-month period [ruling 50, copy enclosed). In our opinion "ADLIB" qualifies as a "periodical." Although the publication is essentially a shopping guide, seven of the 24 pages of the sample issue with which you provided us are devoted to listings or television programs. Such information is of general interest to the

public. Assuming that other issues of the publication will carry similar non-advertising information, we think that "AD*LIB" qualities for the exemption provided by section 6362.

Very truly yours,

T. P. Putnam
Tax Counsel

By:
Gary J. Jugum

GJJ:ab
Enclosure

bc: San Francisco - District Administrator