Were quarterly publications consisting almost entirely of advertising exempt from Florida sales tax as free shoppers?

Subject

Free Publications Which Are Primarily Advertising

Plain-English summary

The freely distributed copies of both publications qualified for the shopper exemption. They were regularly published, almost entirely advertising, and distributed through newsstands or mass mail.

The approximately 3,000 annual copies of Publication #1 mailed in exchange for a postage charge were not free and did not qualify. The publisher could provide the prescribed certificate to buy printing, paper, and ink tax-free. Refunds of tax paid to a dealer had to be obtained from that dealer, within the stated three-year period, and the exemption did not reach tax paid before its July 1, 1991 effective date.

What this means for you

A nominal mailing charge could remove a copy from the free-publication exemption. Distribution method, advertising percentage, regular publication, and vendor documentation all mattered.

Common questions

Were newsstand copies free of tax? Yes.

Were postage-charged mailed copies exempt? No.

Could production inputs be purchased exempt? Yes, with the prescribed shopper or community-newspaper certificate.

Citations and references

• Fla. Stat. §§ 212.08(7)(w), 213.22, and 215.26
• Fla. Admin. Code rr. 12A-1.008(10) and 12A-1.014(7)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94A-032

Original ruling text

May 17, 1994

Re: TAA 94A-032
Sales Tax; Free Publications Which Are Primarily
Advertising
Section 212.08(7)(w), Florida Statutes
Rule 12A-1.008(10), Florida Administrative Code
FEI No.: XXX
FEI No.: XXX

Dear :

This response is in reply to your October 27, 1993,
petition for the Department's issuance of a Technical Assistance
Advisement ("TAA") pursuant to s. 213.22, F.S., concerning the
captioned matter. Your petition 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. Therefore, the
Department is herewith granting your request for the issuance of
a TAA and the ensuing discourse shall embody said ruling.

DISCUSSION OF FACTS

The salient facts pertaining to the matter under advisement
as derived from your petition and supporting documents are as
follows:

Taxpayer publishes two publications, XXX (hereinafter
"Publication #1") and XXX (hereinafter "Publication #2").
"Publication #1" is free of charge except for approximately
3,000 of the approximately 4,000,000 copies published each year,
for which there is a postage charge required for those who wish
to have copies mailed to them. The publication is published
every quarter and its primary purpose is advertising of business
concerns in the area and not the dissemination of news.
Approximately 100% of the space is devoted to such advertising.
The publication is primarily distributed from newsstands located
in restaurants, service stations and hotels.

"Publication #2" is no longer being published. Its last
issue was published for the Winter, 1993 quarter. During its
circulation the publication was free of charge and published
every quarter. The principal purpose of the publication was
advertising of business concerns in the area and not the
dissemination of news. Approximately 100% of the space was
devoted to such advertising. The publication was primarily
distributed through a mass mailing to all residents in the
county.

RELEVANT AUTHORITY

Section 212.08(7)(w), F.S., states:

"(w) Newspapers, shoppers, and community newspapers.
Likewise exempt are newspapers. Also exempt are free,
circulated publications which are published on a regular
basis, the content of which is primarily advertising, and
which are distributed through the mail, home delivery, or
newsstands."

Rule 12A-1.008(10)(a)(c), F.A.C., provides:

"(10) Effective July 1, 1991, Shoppers' andcommunity
newspapers' which satisfy the criteria provided in this
subsection are exempt from tax.
"(a) The term shopper' means a community publication made available to its coverage area by way of distribution through the mail, home delivery, or newsstands free of charge, which is published on a regular basis (usually daily or weekly) and which consists primarily of advertising of a broad range of products and services offered by several unrelated types of businesses or individuals, and which has a conformity as to title and general nature of content from issue to issue, and may contain in each issue at least some news of general or community interest, community notices, and could also contain editorial comment or articles by different authors.... "(c) In order to satisfy theprimarily advertising'
requirement of a shopper' orcommunity newspaper,' more

than 50 percent of the publication's copy must be devoted
to advertising in more than one-half of the published
editions during any 12-month period. However, in order to
be considered a newspaper, a community newspaper must carry
a minimum of 25 percent news consisting of current events
and matters of general interest which appeal to a wide
spectrum of the general public."

CASE LAW

First, as s. 212.08(7)(w), F.S., constitutes a statutory
exemption, the Department in construing said provision must
adhere to and be guided by the long-standing and fundamental
precept of statutory construction, established by the Florida
Supreme Court, which mandates that exemptions from or exceptions
to taxing statutes must be strictly construed against the
taxpayer. See Asphalt Pavers v. Dept. of Revenue, 584 So.2d 57
(Fla. 1st DCA 1991); Dade Cty. Taxing Auth. v. Cedars of
Lebanon, 355 So.2d 1205 (Fla. 1978), reh. den. April 5, 1978;
Williams v. Jones, 326 So.2d 425 (Fla. 1975), reh. den. March 4,
1976; Straughn v. Camp, 293 So.2d 689 (Fla. 1974); United States
Gypsum Company v. Green, 110 So.2d 409 (Fla. 1959).

Additionally, when a statute is ambiguous, the title may be
examined in order to determine the legislative intent. 49 Fla.
Jur. 2d Statutes section 156. The title of s. 212.08(7)(w),
F.S., refers to "newspapers, shoppers, and community
newspapers." Therefore, in construing s. 212.08(7)(w), F.S., the
Department must refer to the title in interpreting an ambiguous
statute, which effectively bars the body of the statute from
being construed more broadly than its title. Further support is
lent to this interpretation by construing the title and the body
of the statute under the rule of ejusdem generis, since the
title of s. 212.08(7)(w), F.S., refers to "newspapers, shoppers,
and community newspapers." 49 Fla. Jur. 2d Statutes section
128.

Further, the Florida Supreme Court overturned the newspaper
exemption provided in Section 212.08(7)(w), F.S., in 1992. See
Department of Revenue v. Magazine Publishers of America, 604
So.2d 459 (Fla. 1992). However, the part of the exemption

regarding free circulated publications remained intact.
Further, in a predecessor decision, Campus Communications v.
Dept. of Rev., 473 So.2d 1290 (Fla. 1985), the Florida Supreme
Court had already held that a free-distribution publication
which had its origin as a student newspaper was a "newspaper"
within the meaning of the statutory exemption from sales tax for
newspapers considering that the publication included a broad
range of news stories including staff-written and wire service
material with a relatively low percentage of space devoted to
advertisements.

In creating the exemption for shoppers and community
newspapers, effective July 1, 1991, by the amendments to s.
212.08(7)(w), F.S., enacted by s. 93, Ch. 90-132, L.O.F., the
Legislature acted with full knowledge of the Florida Supreme
Court's decision in Campus Communications. Additionally, it is
pointed out that a statute may contain constitutional and
unconstitutional provisions even within the same section. See
State ex rel. Landis v. Green, 144 So. 681 (Fla. 1932). When
part of a statute is declared unconstitutional but the remaining
provisions can be given effect independent of the void
provision, such other provisions are not affected by the
determination of unconstitutionality. 10 Fla. Jur. 2d 312,
Constitutional Law s. 98.

CONCLUSIONS OF LAW

Applying the foregoing statutory law, rule, and case law in
evaluating "Publication #1" and "Publication #2" as to the
matter of eligibility for the exemption as a "shopper", we are
able to clearly determine from examination of the Publications
satisfaction of all the requirements of a shopper as stated in
Rule 12A-1.008(10), F.A.C. However, the number of copies of
"Publication #1" for which there is a postage charge for
mailing, would not meet the requirement of a free publication
and would not be eligible for the exemption. Therefore, the
Department hereby affirms that "Publication #1" (except for
those copies for which there is a postage charge) and
"Publication #2" qualify for the exemption provided in s.
212.08(7)(w), F.S., as a "shopper".

Rule 12A-1.008(10)(d), F.A.C., provides that in order for
the producer of a shopper or community newspaper to exempt the
purchase of printing of the shopper or community newspaper or to
exempt the purchase of taxable items such as paper and ink which
go into and become a part of a shopper or community newspaper, a
blanket exemption certificate of the following suggested format
should be provided to vendors:

SHOPPER/COMMUNITY NEWSPAPER EXEMPTION CERTIFICATE
SELLER'S NAME: ______
SELLER'S ADDRESS:______
The undersigned hereby swears and affirms that the purchases on
or after _(date) from the above named vendor are for the
following purposes as checked in the space provided:
( ) The purchase of printing of a "shopper" or "community
newspaper" as defined in Rule 12A-1.008(10), F.A.C.
( ) The purchase of items such as paper and ink for the
sole and exclusive purpose of incorporation into a "shopper" or
"community newspaper" as defined in Rule 12A-1.008(10), F.A.C.,
as a part thereof, and no part of which will be diverted to any
other use.
PURCHASER: _________
PURCHASER'S ADDRESS: _____
PURCHASER'S CERTIFICATE OF REGISTRATION NO. (Sales Tax No.) IF
REGISTERED: ________
BY: ____ TITLE: ___
(signature)
DATE: __

As we discussed in our telephone conversation, a refund of
taxes previously paid must be secured from the selling dealer.
Rule 12A-1.014(7), Florida Administrative Code, states:

"A taxpayer who has overpaid tax to a dealer, or who has
paid tax to a dealer when no tax is due, must secure a
refund of the tax from the dealer and not from the
Department of Revenue."

Section 215.26, F.S., provides a three year statute of
limitations for obtaining a refund of taxes paid in error.

The amendment to s. 212.08(7)(w), F.S., created by Chapter
90-132, Laws of Florida, to exempt shoppers and community
newspapers, became effective July 1, 1991. Therefore, taxes
paid prior to this date would not be eligible for the exemption.

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 and your request
are public records under Chapter 119, F.S., which are subject to
disclosure to the public under the conditions of s. 213.22, F.S.
Your name, address, and any other details which might lead to
identification of the taxpayer must be deleted by the Department
before disclosure. In an effort to protect the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

Bonnie Everton
Technical Assistant

/e
Cont. #11712