Did a monthly subscription newsletter containing information for stock-market investors qualify as an exempt publication?

Plain-English summary

A redacted prospective publisher's March 20, 1967 letter to the San Luis Obispo office asked about the exempt status of a proposed publication. The office referred the request for reply.

Assistant Counsel understood that the publisher planned a monthly newsletter containing information for stock-market investors and sold through subscriptions. The publisher asked whether it was exempt under former Sales Tax Ruling 50.

After reviewing the absent exhibit and other submitted information, counsel concluded that Computerized Security Analysis was an exempt publication. The one-page opinion gives no further content, frequency, subscription, delivery, or classification analysis.

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 1967 opinion does not establish current exemption treatment.

The official 385.1440 PDF does not include the March 20 request, submitted information, exhibit, proposed newsletter, articles or investment information, publication schedule, publisher or subscriber identity, subscription agreement, price or invoice, sale or use, delivery terms or proof, returns, exemption documentation, tax calculations or payments, audit, assessment, claim, appeal, or later outcome. The publisher, investors, subscribers, transactions, and amounts are redacted or unidentified.

The source begins with the control number 190.0480, while its exact official URL, PDF metadata, live annotation, title, facts, and date identify Annotation 385.1440. CDTFA's separately published actual source for Annotation 190.0480 begins with a March 25, 1953 landscape-gardener opinion and is unrelated. The original-text section preserves the erroneous number rather than silently changing it.

The live annotation preserves the title, monthly schedule, stock-market-investor content, subscription method, date, and exempt result. It calls the newsletter an “exempt periodical,” while the supporting source says only “exempt publication.” It omits the request and San Luis Obispo referral, Ruling 50, absent exhibit and submitted information, wrong control number and unrelated actual 190.0480 source, later 2002 warning, missing records, redactions, and absent outcome.

What this means for you

Investment-newsletter publishers and tax professionals

The historical opinion supports its stated result only for the reviewed proposal. Preserve the complete newsletter and exhibit, content and publication schedule, subscription agreement, invoices and sales, delivery records, returns, exemption documents, tax calculations, and payments, and apply current law.

Common questions

Q: How often was the newsletter proposed to appear?

A: Monthly.

Q: Who was the intended audience?

A: Stock-market investors.

Q: Did the PDF explain the result in detail?

A: No. It states the conclusion after referring to the submitted information and an exhibit that is not included.

Q: Does the supporting source itself call the newsletter a periodical?

A: No. It calls the title an exempt publication; the live annotation uses the periodical label.

Q: Why does the source begin with 190.0480?

A: That is an erroneous control number. The actual official 190.0480 source concerns landscape contractors, while the URL, metadata, live entry, title, facts, and date support 385.1440 here.

Citations and references

• 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 20 request, exhibit, publication, subscriptions, sales, tax records, and outcome — described or implicated but not documented
• California Sales and Use Tax Annotation 190.0480 — erroneously printed as the control number; its separately published source is unrelated

Verbatim support

From the official Assistant Counsel opinion:

It is our understanding that you intend to publish a monthly news letter which will contain information to investors in the stock market. The publication is to be sold through subscriptions.

You ask our opinion as to whether or not the publication is exempt under Ruling 50.

Upon review of the enclosed exhibit, and the information you submitted to us, we are of the opinion that the publication "Computerized Security Analysis" is an exempt publication.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.1440
• Original supporting opinion: 385.1440 PDF

Original ruling text

190.0480

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 16, 1967

Dear Mr.
Your letter of March 20, 1967, addressed to our San Luis Obispo office regarding the exempt status of a publication you propose to publish has been referred to this office for reply. It is our understanding that you intend to publish a monthly news letter which will contain information to investors in the stock market. The publication is to be sold through subscriptions. You ask our opinion as to whether or not the publication is exempt under Ruling 50. Upon review of the enclosed exhibit, and the information you submitted to us, we are of the opinion that the publication "Computerized Security Analysis" is an exempt publication.

Very truly yours,

Glenn L. Rigby
Assistant Counsel

GLR:lt [lb]