Which Christian Science Publishing Society publications were newspapers or periodicals, and did that classification alone make their California retail sales exempt?

Plain-English summary

Marysville Branch Office Supervisor Dan Tokutomi sent Legal Division a redacted correspondent's letter by route slip. The correspondent had insisted on a written answer but supplied no return address.

The memo understood that a redacted California retailer purchased five publications from a redacted Massachusetts supplier and sold them at retail in California. One copy of each publication was submitted for review.

The source redacts every title but describes the five numbered publications:

• Publication 1 appeared quarterly and contained Bible passages used in Sunday sermons, a daily individualized-study outline, and passages for responsive readings.
• Publication 2 appeared weekly with articles and first-hand-experience testimonies concerning a redacted religion.
• Publication 3 appeared monthly as a French version of a redacted title, with articles, testimonies, and a church directory adapted to each language.
• Publication 4 appeared monthly as the official organ of a redacted organization, with articles and a worldwide directory of churches and redacted entries.
• Publication 5 was an international daily newspaper providing typical news journalism.

Legal staff classified Publications 1 through 4 as periodicals and Publication 5 as a newspaper. The live annotation maps those results to Christian Science Quarterly Bible Lessons, The Christian Science Sentinel, Le Heraut de la Science Chretienne, The Christian Science Journal, and The Christian Science Monitor, respectively.

Classification did not decide exemption. The memo says the general sales-and-use-tax exemption for newspapers and periodicals was repealed effective July 15, 1991, and points to sections 6362.3, 6362.7, and 6362.8 as later exemptions.

As one example, section 6362.8(b)(2) could exempt an organization's sales if it qualified under Internal Revenue Code section 501(c)(3) and the newspaper or periodical neither received revenue from nor accepted commercial advertising. Staff needed more facts about the redacted seller's sales, federal tax-exempt status, or other nonprofit status before determining whether any exemption applied.

Source and live-annotation limits

The official PDF does not include the correspondent's letter, route slip, attachment, return address, any of the five publications or issues, titles, articles or testimonies, Bible or sermon content, study outline, responsive readings, church directories, organization or religion identity, retailer or Massachusetts supplier identity, purchase or resale agreements, prices or invoices, California retail sales or uses, advertising or revenue records, federal tax-exempt determination, nonprofit records, returns, exemption documentation, tax calculations or payments, audit, assessment, claim, appeal, further submission, final exemption decision, or later outcome. The parties, publications, religion, churches, directory entries, transactions, and amounts are redacted or unidentified.

The source prints “issued weekly and consist,” “tax exempt statue,” and a broken supplier redaction ending --- --- -in Massachusetts. The original-text section preserves those forms rather than silently correcting the official record.

The live annotation supplies all five Christian Science Publishing Society titles and frequencies and preserves their four-periodical/one-newspaper classifications. It condenses the conditional section 6362.8 example into a statement that sales are exempt if the publisher qualifies under section 501(c)(3) and the publications receive no revenue from and accept no commercial advertising. The source itself says further sales and organizational facts were required before staff could decide whether any exemption applied. The live entry omits the correspondence route, missing address, California retailer and Massachusetts supplier, submitted copies, detailed content, July 15, 1991 repeal, sections 6362.3 and 6362.7, incomplete record, redactions, source forms, and absent final decision and outcome.

What this means for you

Religious publishers, retailers, and tax professionals

Establish publication classification separately from exemption eligibility. Preserve every issue and its content and frequency, publisher and retailer identities, supplier contracts, invoices and retail sales, federal tax-exempt and nonprofit evidence, advertising acceptances and revenue, returns, exemption documents, tax calculations, and payments.

Common questions

Q: Which publication qualified as a newspaper?

A: The Christian Science Monitor.

Q: Did the other four qualify as periodicals?

A: Yes.

Q: Did counsel decide that every California retail sale was exempt?

A: No. Additional nonprofit, advertising, and sales facts were required.

Q: Did the supporting memo identify the five titles?

A: No. It numbered and described them but redacted their names; the live annotation supplies the title mapping.

Q: What happened to the general newspaper-and-periodical exemption?

A: The memo says it was repealed effective July 15, 1991.

Q: Did section 6362.8(b)(2) automatically apply?

A: No. Counsel gave a conditional example and requested additional sales, federal tax-exempt, and nonprofit facts.

Citations and references

• California Revenue and Taxation Code §§ 6362.3, 6362.7, and 6362.8(b)(2)
• Internal Revenue Code § 501(c)(3)
• Inbound letter, five publications and issues, sales, advertising, nonprofit and federal tax-exempt records, final exemption decision, and outcome — described or implicated but not documented

Verbatim support

From the official Legal Division memorandum:

After reviewing each of the publications, we believe that Publications 1 through 4 qualify as “periodicals,” and Publications 5 qualifies as a “newspaper”.

As you know, effective July 15, 1991, the general exemption from sales and use tax for the sale and use of newspapers and periodicals was repealed.

In order for us to determine whether any of the exemptions apply we will need further facts regarding sales by the --- and whether or not the --- qualifies for tax exempt statue under section 501 (c) (3) of the Internal Revenue Code or is otherwise a non-profit organization.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.1424
• Original supporting opinion: 385.1424 PDF

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. Dan Tokutomi
Branch Office Supervisor
Marysville Branch Office – KHD

From:

Ronald L. Dick, Staff Counsel
Legal Division – MIC: 82

385.1424

Date:

May 11, 1994

Subject:

Your office sent us a letter you received from --- of the --- a copy is attached. The letter was sent by route slip and noted that --- insisted upon our written response but did not provide us with an address for ---. From --- letter, we understand that the --- --- --- purchases five publications from --- --- -in Massachusetts, and the --- sells the publications at retail in California. --- sent for review one copy of each of the five publications and asked whether the retail sale of the publications in California is subject to sales tax. The publications, as numbered by --- are:

1. --- --- ---. The publication is published quarterly and comprises passages from the
   Bible which are in the Sunday church sermons, an outline for daily individualized study, and the text of Bible passages for responsive readings.
2. --- --- --- The publication is issued weekly and consist of articles and testimonies of
   first-hand experiences related to the --- religion.
3. --- --- --- The publication is issued monthly. It is the French version of the --- --- and
   contains articles and testimonies as well as a directory of churches and --- --- --appropriate to each language.
4. --- --- --- The publication is issued monthly. It is the official organ of the --- --- ---. It
   consists of articles and a worldwide directory of churches and --- --- ---.
5. --- --- --- The publication is an international daily newspaper which provides typical
   news journalism.

After reviewing each of the publications, we believe that Publications 1 through 4 qualify as “periodicals,” and Publications 5 qualifies as a “newspaper”. As you know, effective July 15, 1991, the general exemption from sales and use tax for the sale and use of newspapers and periodicals was repealed. Various exemptions from sales and use tax for the sale and use of periodicals have been added to the Revenue and Taxation Code since that time. See Revenue and Taxation Code sections 6362.3, 6362.7, and 6362.8. For example, if the --- --- --- is an organization that qualifies for tax exempt status under section 501 (c) (3) of the Internal Revenue Code, its sale of the newspaper or the periodicals is exempt under Revenue and Taxation Code section 6362.8, subdivision (b) (2) if the newspaper or periodical does not receive revenue from, or accept, any commercial advertising. In order for us to determine whether any of the exemptions apply we will need further facts regarding sales by the --- and whether or not the --- qualifies for tax exempt statue under section 501 (c) (3) of the Internal Revenue Code or is otherwise a non-profit organization. RLD: plh Attachment