Ezel / Tax Rulings / CA

Did a press-clipping bureau sell tangible clippings when it monitored publications for subscribers and charged per clipping?

Short answer No. California treated the subscriber agreement as a service contract, and unit pricing based on the number of clippings did not make the receipts taxable sales.
State
CA
Ruling
Annotation 515.1260
Tax type
Sales and Use Tax
Issued
1951-07-27
Issued by
California State Board of Equalization
Requested by
California Board of Equalization staff reviewing press-clipping bureaus
Topics
monitoring services subscription services
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1951. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1951
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a California State Board of Equalization office memorandum dated July 27, 1951, published by CDTFA as support for a sales and use tax annotation. The source expressly says the issue was not free from doubt and concerns general press-clipping bureau agreements with subscribers, including per-clipping unit charges. Another monitoring, media-intelligence, research, or clipping service should check current subscription, content-reproduction, copyright, digital-delivery, database-access, unit-pricing, and sales-and-use-tax rules. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

California reviewed whether press-clipping bureaus rendered services or sold tangible personal property to subscribers.

Although the source said the issue was not free from doubt, it treated the subscriber agreement as a service contract rather than a sale of the individual clippings.

Charges calculated on a per-clipping basis did not change the service classification, so the bureau's gross receipts were not taxable under the opinion.

What this means for you

Monitoring and clipping services

Unit pricing did not by itself make the delivered clippings the transaction's primary object.

Accountants and tax professionals

Document the monitoring work, subscriber instructions, selection process, delivery method, per-item charges, reproductions, and any standalone content sales.

Common questions

Q: Were press-clipping subscriptions taxable sales?

A: No.

Q: Did charging per clipping change the result?

A: No.

Source

Original ruling text

STATE BOARD OF EQUALIZATION

515.1260

OFFICE CORRESPONDENCE
Place: Sacramento, California
Date: July 27, 1951
To:

REDACTED TEXT

From: R. G. Hamlin
Re:

Press Clipping Bureau
You have asked whether press clipping bureaus should be regarded as rendering a service or as sellers of tangible personal property, for sales tax purposes. A review of our files indicates that press clipping bureaus generally have no procured seller’s permits, and have not been paying the tax. Nor has correspondence been found in our files indicating that the question has been previously presented to us. Although the matter may not be free from doubt we are of the opinion that the agreement between the press clipping bureau and its subscribers constitutes a contract for the rendering of a service, rather than an agreement for the sale of tangible personal property. Accordingly, we do not regard the tax as applicable to the gross receipts derived therefrom, even though the charges are based on a unit basis per clipping.

RGH:ja

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