Did a free weekly shopper publication qualify for Florida's advertising-publication exemption?

Plain-English summary

A publisher produced a free weekly shopper publication distributed through mail, home delivery, and newsstands. Advertising occupied more than 60% of the printed inches in the sample issues.

Florida found the samples qualified for the exemption for free, regularly circulated publications whose content was primarily advertising and whose distribution used the approved methods.

The exemption had to be tested issue by issue. The publication needed to continue meeting the content and distribution requirements, supported by adequate records.

What this means for you

Publication status is not permanent. Each issue's advertising mix and distribution method must support the exemption.

Common questions

Was charging readers allowed? The ruling addressed a publication distributed free of charge.

How much advertising did the samples contain? More than 60% of total printed inches.

Could one sample establish all future issues? No. Florida stated that each issue stands on its own.

Citations and references

• Fla. Stat. § 212.08(7)(w) (free advertising publications)
• Fla. Stat. § 212.06(16) (publisher use of publications)
• Fla. Admin. Code r. 12A-1.008(3) (exempt periodicals)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 05A-047

Original ruling text

SUMMARY
QUESTION 1: Are the provided Publications exempt under the provisions of Section 212.08(7), F.S.?
ANSWER 1 - Based on Facts Below: Yes. The Publications are distributed on a regular basis, through the mail and
free of charge. They consist primarily of advertising. Based on the information provided and on a review of the
included sample copies, the Publications satisfy the exemption requirements of s. 212.08(7)(w), F.S.

November 14, 2005

Re: Technical Assistance Advisement 05A-047
Sales and Use Tax - Shoppers
Sections 212.05, 212.06(16), 212.08(7)(w), F.S.
Rule 12A-1.008(3), F.A.C.
XXX ("Taxpayer")
FEI #: XX
Dear:
This is in response to your letter dated August 29, 2005, and other correspondence provided requesting a Technical
Assistance Advisement (TAA) regarding the above referenced party and matter. Your letter has been carefully
examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C.
This response to your request constitutes a TAA and is issued to you under the authority of Section 213.22, F.S.
FACTS
You state in your letter referenced above that the Taxpayer publishes, prints and distributes a newspaper, XXX
(Publication). This Publication is published on a weekly basis, and each issue contains advertising. The free
distribution includes home delivery and newsstands. You have provided three copies of the Publication for our review.
You state that the Publication is primarily advertising. The advertising space is over 60% of the total printed inches.
ISSUE PRESENTED
Whether the Publication is exempt under the provisions of Section 212.08(7)(w), F.S., as a newspaper.
TAXPAYER POSITION
You state in your letter:

We believe this periodical should be exempt from sales and use tax based on [Section 212.08(7)(w), F.S., and Rule
12A-1.008(3)(a), F.A.C.]
APPLICABLE STATUTES AND RULES
Section 212.05, F.S., provides in pertinent part:
It is hereby declared to be the legislative intent that every person is exercising a taxable privilege who engages in the
business of selling tangible personal property at retail in this state, including the business of making mail order sales,
or who rents or furnishes any of the things or services taxable under this chapter, or who stores for use or
consumption in this state any item or article of tangible personal property as defined herein and who leases or rents
such property within the state.
(1) For the exercise of such privilege, a tax is levied on each taxable transaction or incident, which tax is due and
payable as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of tangible personal property when sold at
retail in this state, computed on each taxable sale for the purpose of remitting the amount of tax due the state, and
including each and every retail sale....
Section 212.06(16), F.S., provides:
(16)(a) Notwithstanding other provisions of this chapter, the use by the publisher of a newspaper, magazine, or
periodical of copies for his or her own consumption or to be given away is taxable at the usual retail price thereof, if
any, or at the "cost price."
(b) For the purposes of this subsection, the term "cost price" means the actual cost of printing of newspapers,
magazines, and other publications, without any deductions therefrom on account of the cost of materials used, labor
or services cost, transportation charges, or other direct or indirect overhead costs that are a part of printing costs of
the property. However, the cost of labor to manufacture, produce, compound, process, or fabricate expendable items
of tangible personal property which are directly used by such person in printing other tangible personal property for
sale or for his or her own use is exempt. Authors' royalties, fees, or salaries, general overhead, and other costs not
directly related to printing shall be deemed to be labor associated with manufacturing, producing, compounding,
processing, or fabricating expendable items.
Section 212.08(7)(w), F.S., provides:
(w) Certain newspaper, magazine, and newsletter subscriptions, shoppers, and community newspapers.--Likewise
exempt are newspaper, magazine, and newsletter subscriptions in which the product is delivered to the customer by
mail. Also exempt are free, circulated publications that are published on a regular basis, the content of which is
primarily advertising, and that are distributed through the mail, home delivery, or newsstands. The exemption for
newspaper, magazine, and newsletter subscriptions which is provided in this paragraph applies only to subscriptions

entered into after March 1, 1997.
12A-1.008 (3), F.A.C., provides:
(3)(a) Periodicals that meet the following requirements are exempt from tax:

1. The periodical is published on a regular basis;
2. The periodical is distributed free of charge to the recipient by mail, home delivery, rack machines, newsstands, or
   similar method; and
3. The content of the periodical is primarily advertising.
   (b) The sale of subscriptions to periodicals that are delivered to the subscriber by mail are exempt.
   (c) Distributors of tax exempt periodicals may issue an exemption certificate to their vendors in lieu of paying tax on
   the publishing or printing costs of, or for the purchase of items, such as paper and ink, that are incorporated into and
   become a component part of, the publication.
   RESPONSE
   Section 212.05, F. S., provides that tax is imposed on the sales price of each item or article of tangible personal
   property sold at retail in this state. Section 212.06(16)(a), F.S., further provides that the use by a publisher of copies of
   a newspaper, magazine, or periodical for its own consumption or to be given away is taxable. Use tax is due on the
   "cost price" of the publication. Section 212.08(7)(w), F.S., and Rule 12A-1.008(3), F.A.C., provide exemptions for
   certain publications from the tax imposed by Chapter 212, F.S.
   Each issue will stand on its own in the determination of whether or not it meets the requirements of the exemption.
   Taxing statutes are strictly construed against the taxing authority, and statutes granting exemptions are strictly
   construed against the taxpayer. See Asphalt Payers v. Dept. of Revenue, 584 So.2d 57 (Fla. 1st DCA 1991) (citing
   the rule that exemptions from tax are strictly construed against the taxpayer with any ambiguity resolved in favor of the
   administrative agency); State ex rel. Szabo Food Services. Inc. v. Dickinson, 286 So.2d 529 (Fla. 1973)(noting that
   although taxing statutes are strictly construed against a taxing authority, under Florida law exemptions are strictly
   construed against the taxpayer); United States Gypsum Co. v. Green, 110 So.2d 409 (Fla. 1959)(also stating that
   exemptions from tax are strictly construed against the taxpayer). Taxpayers are required to maintain records
   demonstrating entitlement to exemptions from tax. Section 212.13(2), F.S. Insufficient or incomplete records result in
   an assessment for unpaid tax.
   The Publication is distributed on a regular basis, free of charge, through home delivery and newsstands. Based on the
   information provided in your letter and on review of the included sample copies, the Publication satisfies the
   exemption requirements of s. 212.08(7)(w), F.S. The Publication also satisfies the exemption requirements of Rule
   12A-1.008(3), F.A.C. Assuming you have provided representative samples, the Publication consists primarily of
   advertising. Assuming that you continue to publish these Publications with primarily advertising and they are

distributed through the mail, or similar methods, they satisfy the requirements provided in Section 212.08(7)(w), F.S.,
and are exempt. We must caution you, however, that this conclusion is based on the examination of the sample
copies. The exempt Publications will need to continue to meet the requirements set forth in section 212.08(7)(w), F.S.,
in order for the exemption to continue.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the
Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22,
F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that
subsequent statutory or administrative rule changes, or judicial interpretations of the statutes or rules, upon which this
advice is based, may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public records under
Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential
information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this
response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.
Sincerely,
Valerie Koenitzer, C.P.A.
Senior Tax Specialist
Technical Assistance and Dispute Resolution
(850) 922-9412
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