Did a monthly society publication containing simian-related news qualify as an exempt periodical?

Plain-English summary

A redacted printer prepared, printed, and mailed the monthly The Simian for a society identified only as “X” in the opinion. CDTFA's live annotation identifies it as the Simian Society of America.

The publication went primarily to society members, included some advertising, and otherwise consisted mainly of items about simians and of interest to people who liked them. The society said California tax did not apply to the printer's charges; the printer believed tax applied to the complete printing bill because it mailed copies to California members.

California agreed with the society that tax did not apply to the printer's sales of the publication. The monthly schedule satisfied the frequency requirement, and the recurring news and information for a particular group satisfied the historical periodical definition.

The opinion instructed the printer to obtain the certificate described in paragraph (c) of former Ruling 50 to support its gross-receipts deduction for publication sales to the society.

Source and live-annotation limits

The official PDF does not include the April 20 request, The Simian or any issue, articles or other simian content, advertising, member or society records, publication or mailing records, printing agreement or bill, Ruling 50 enclosure, paragraph (c) certificate, prices, invoices, sales or uses, gross-receipts deduction, returns, exemption documentation, tax calculations or payments, audit, assessment, claim, appeal, or later outcome. The printer, society in the source, members, advertisers, transactions, quantities, prices, and tax amounts are redacted or unidentified.

The source prints section 6362(a} and repeats any periodical regularly issued at average intervals not exceeding three months and any periodical regularly issued at average intervals not exceeding three months. The original-text section preserves those forms rather than silently repairing the bracket or repetition.

The live annotation supplies the Simian Society of America identity and preserves the title, monthly schedule, member mailing, simian news and items, date, regular-publication analysis, periodical result, and sales-tax exemption. It omits the request and counsel, redacted printer and source society, publication/printing/mailing services, some advertising, the parties' competing tax positions and California-member rationale, section 6362(a), Ruling 50, component-property and complete periodical definitions, continuity test, required certificate and deduction, missing records, source forms, and absent outcome.

What this means for you

Printers, association publishers, and tax professionals

Preserve every issue and article, advertising, publication and mailing schedules, member lists, printing agreement and bills, component-material records, exemption certificates, invoices and sales, gross-receipts deductions, returns, tax calculations, and payments. Apply current law.

Common questions

Q: Did some advertising prevent periodical treatment?

A: No. The opinion still found the described publication qualified.

Q: Why did it qualify?

A: It appeared monthly and contained recurring news and information for the society's group of readers.

Q: Did the printer need documentation?

A: Yes. Counsel directed the printer to obtain the certificate specified in former Ruling 50.

Q: Did the opinion identify the society by name?

A: No. It calls the client “X” Society; the live annotation supplies Simian Society of America.

Q: Did the source show the certificate or deduction?

A: No.

Citations and references

• Former California Revenue and Taxation Code § 6362(a)
• Former California Sales Tax Ruling 50, Newspapers and Periodicals
• April 20 request, publication and ads, printing and mailing records, Ruling 50 enclosure and certificate, sales, deductions, tax records, and outcome — described or implicated but not documented

Verbatim support

From the official Assistant Tax Counsel opinion:

In our opinion the Society is correct and tax does not apply in this instance.

In our opinion "The Simian" qualifies as a "periodical" under the definition as set forth above. Since, it appears, the publication is issued monthly, the tests as to regularity and frequency as set forth in the statute and regulation are met.

You should request from your client a certificate of the type set forth in paragraph (c) of Ruling 50 in order to support a deduction from your gross receipts with respect to your sales to the Society of the publication in question.

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 385.2000
• Original supporting opinion: 385.2000 PDF

Original ruling text

385.2000

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

May 8, 1970

Gentlemen:
This is in reply to your letter of April 20, 1970 in which you inquire as to our opinion as to the application of the Sales and Use Tax Law to your activities in preparing "The Simian", a monthly publication, for your client the "X" Society. We understand that you handle the publication, printing and mailing of "The Simian". The publication is primarily sent to members of the Society. The publication includes some advertising; however, it consists primarily of items of interest related to Simians and Simian lovers. The Society has taken the position that the California tax does not apply to the charges made by you for preparing the publication. You have taken the position that tax applies on the complete printing bill since the Society has members in California to whom you mail the publication. In our opinion the Society is correct and tax does not apply in this instance. As Section 6362(a} of the Revenue and Taxation Code and our Ruling 50, "Newspapers and Periodicals", copy enclosed, provide, tax does not apply to the gross receipts from the sale of tangible personal property which becomes an ingredient or component part of any periodical regularly issued at average intervals not exceeding three months and any periodical regularly issued at average intervals not exceeding three months and any such periodical. The term "periodical" is limited to those publications which appear at stated intervals, each issue of 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 of the series in the nature of the articles appearing in them. In our opinion "The Simian" qualifies as a "periodical" under the definition as set forth above. Since, it appears, the publication is issued monthly, the tests as to regularity and

frequency as set forth in the statute and regulation are met. Accordingly, as stated above, the tax does not apply. You should request from your client a certificate of the type set forth in paragraph (c) of Ruling 50 in order to support a deduction from your gross receipts with respect to your sales to the Society of the publication in question.

Very truly yours,

Gary J. Jugum
Assistant Tax Counsel

GJJ:ab [lb]