Did Shippers' Cyclopedia qualify as an exempt periodical when freight-rate replacement sheets had historically appeared at least every three months but followed no timetable?

Plain-English summary

A redacted publisher identified as “L” rented Shippers' Cyclopedia, a shipping-rate and carriage guide used by the freight-trucking industry throughout California and the United States. It did not sell the guide. Subscribers kept it until cancellation; failure to return it within 30 days after the contract term automatically renewed the contract for another year.

Loose-leaf replacement sheets kept the guide current. Although the publisher's experience was that sheets appeared at least every three months, there was no prearranged timetable; a new sheet was issued only when a freight rate changed.

Assistant Counsel Glenn L. Rigby recommended that the Board deny the publisher's May 24 petition for redetermination because the publication was not regularly issued. Historical frequency did not replace a regular schedule when updates depended entirely on external rate changes. The publisher could request a Board hearing before August 10, 1967.

Source and live-annotation limits

The official PDF does not include the petition, Shippers' Cyclopedia, loose-leaf publication or any replacement sheet, subscriber or rental contract, cancellation or return record, freight-rate schedule or change, reviewed publication copies, Ruling 50, publisher records, prices, invoices, rentals, sales or uses, returns, exemption documentation, tax calculations or payments, audit, assessment, Board hearing request, Board action, refund, appeal, or later outcome. The publisher, subscribers, copied recipient, transactions, quantities, rates, prices, and tax amounts are redacted or unidentified.

The source prints section 6352 as the regular-publication provision and says replacement-sheet issuance depended upon their being a change in freight rates. The original-text section preserves those forms rather than substituting a different section or silently correcting the wording.

The live annotation preserves the title, rental and subscriber facts, loose-leaf updates, irregular schedule, historical three-month frequency, absence of a timetable, freight-rate trigger, date, and nonexempt result. It omits the petition and counsel, publisher “L,” industry and geographic use, annual term, guide return and automatic renewal, Ruling 50 contention, reviewed copies, model-change comparison, printed section 6352 citation, recommendation rather than final Board action, hearing offer, missing records, redactions, source form, and absent outcome.

What this means for you

Loose-leaf publishers, logistics businesses, and tax professionals

Track a fixed update schedule separately from event-driven changes. Preserve every guide and replacement sheet, publication calendar, triggering rate change, subscriber and rental contract, cancellation and return record, contract renewal, invoice and payment, return, exemption document, tax calculation, and assessment record.

Common questions

Q: Had replacement sheets appeared at least every three months?

A: Yes, historically.

Q: Why did the guide still fail?

A: Updates occurred only when freight rates changed, not under a prearranged timetable.

Q: What did counsel recommend?

A: Denial of the petition for redetermination.

Q: Does the source show that the Board denied the petition?

A: No. It records counsel's recommendation and offers a hearing, but not the Board's final action.

Q: What happened if a subscriber did not return the guide?

A: The contract automatically renewed for another year if the guide was not returned within 30 days after the term.

Citations and references

• Former California Revenue and Taxation Code § 6352, as printed in the source
• Former California Sales Tax Ruling 50
• May 24 petition, reviewed publications, rental contracts, replacement sheets, freight-rate changes, sales, tax records, Board action, and outcome — described or implicated but not documented

Verbatim support

From the official Assistant Counsel opinion:

Although in the past it has been the experience of “L” that the replacement sheets are issued at least every three months there is no prearranged timetable for the replacement publication. Its issuance is entirely dependent upon there being a freight rate change.

Inasmuch as your publications are issued at irregular intervals; i.e., their issuances are entirely dependent upon their being a change in the freight rates, we are recommending to the Board that your petition be denied.

Should you desire a hearing before the Board, please let us know before August 10, 1967.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.1920
• Original supporting opinion: 385.1920 PDF

Original ruling text

385.1920

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

July 20, 1967

Gentlemen:
Your petition for re-determination dated May 24, 1967 has been referred to this office for reply. It is our understanding that "L" is a publisher of a shipping rate and carriage guide called “The Shippers' Cyclopedia”. This guide is used by the freight trucking industry throughout the United States and California. These guides are not sold but are rented on an annual basis to various subscribers. The guide is kept current by “L” through the issuance of a loose leaf freightrate publication. Although in the past it has been the experience of “L” that the replacement sheets are issued at least every three months there is no prearranged timetable for the replacement publication. Its issuance is entirely dependent upon there being a freight rate change. The guide is retained by the lessee until the contract is cancelled at which time it is returned to “L”. However, if the guide is not returned within 30 days after the term of the contract, the contract is automatically renewed for another year. It is our understanding that "L" contends that the guides rented to the California subscribers are exempt publications under Ruling 50. We have carefully reviewed your petition and the accompanying copies of the publication in question, and we are of the opinion that the petition should be denied. In the past, we have taken the position that publications issued from time to time as changes in models dictate do not qualify for the periodical's exemption inasmuch as such publications are not "regularly" issued. Section 6352 of the Sales and Use Tax Law requires as a condition that the publication be “regularly” issued. Inasmuch as your publications are issued at irregular intervals; i.e., their issuances are entirely dependent upon their being a change in the freight rates, we are recommending to the Board that your petition be denied. Should you desire a hearing before the Board, please let us know before August 10, 1967. Very truly yours,

Glenn L. Rigby
Assistant Counsel
GLR:ph [lb]