Did two free Florida advertising publications and the advertising inserts mailed with them qualify for the shopper-publication sales-tax exemption?

Plain-English summary

The two free publications could qualify for the shopper exemption, but their separate advertising inserts did not.

Each publication was mailed free of charge, appeared regularly, and carried advertising for a broad range of unrelated businesses. The Department said each would qualify only if more than half of its editions during a 12-month period contained more than 50% advertising.

The inserts failed. They were unrelated to the publications' front-page banners and lacked continuity in title and general content from issue to issue. The Department also said the cited rule treating certain inserts as components of newspapers or magazines did not extend that treatment to shoppers.

The official ruling begins with a status notice that Rule 12A-1.008 was amended effective June 19, 2001.

What this means for you

The exemption depended on a full 12-month advertising-content test, not a few samples. Separate inserts also had to be analyzed independently under the rule that applied to this 1995 ruling.

Common questions

Q: Were the publications automatically exempt because they were free and mostly advertising? A: No. More than half of each publication's editions in a 12-month period had to exceed 50% advertising.

Q: Did the submitted samples otherwise meet the shopper requirements? A: Yes, according to the ruling, apart from proving the 12-month advertising percentage.

Q: Were the advertising inserts exempt as part of the shoppers? A: No. They lacked the required continuity and the newspaper-or-magazine insert provision did not extend to shoppers.

Q: Can this 1995 rule analysis be used without checking later law? A: No. The official source says Rule 12A-1.008 was amended effective June 19, 2001.

Citations and references

• Fla. Stat. § 212.08(7)(w) — newspaper, shopper, and community-newspaper exemption
• Fla. Admin. Code r. 12A-1.008(2)(d)1.b. and (10) — publication and insert rules
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95A-028

Original ruling text

Status: Rule 12A-1.008 F.A.C., amended effective June 19, 2001.

Jul 18, 1995

RE: TAA 95A-028
Sales Tax
Advertising Publications and Inserts
Section 212.08(7)(w), Florida Statutes
Rule 12A-1.008(10), Florida Administrative Code

Dear :

This response is in reply to your letter dated January 30, 1995, in which you request, on behalf of your client, XXXX (hereinafter "Company"), the issuance of a Technical Assistance Advisement pursuant to s. 213.22, F.S., concerning the taxability of advertising publications and inserts. On August 3, 1993, a Letter of Technical Advice was issued regarding the same issue. Your request 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, XXXXX (hereinafter "Publication #1") and XXXX (hereinafter "Publication #2").

"Publication #1" is a publication identified by its name, which is a registered mark printed on the front banner of every issue. The publication consists of four pages. The publication is distributed throughout the XXXX areas forty-five times each year. It is distributed through the U.S. Mail, free of charge to

the residents. The content of "Publication #1" is 100% advertising in every issue, for a broad range of products and/or services offered by unrelated types of businesses.

"Publication #2" is a "magazine-like" publication consisting of approximately sixteen (16) pages. The publication is distributed five (5) times annually over a similar distribution area as "Publication #1." Its content includes local and national advertising for a broad range of products and/or services offered by unrelated businesses. "Publication

2" is distributed free of charge to the recipient through the U.S. Mail. Every issue of the publication is nearly 100% advertising.

In addition, each publication will be distributed with advertising inserts. Every insert will be identified with a supplement line stating that it is distributed as part of either "Publication #1" or "Publication #2." The inserts will consist of single and/or multiple advertisements for a single advertiser or in some cases multiple advertisers. The taxpayer concludes that the inserts are exempt based on Rule 12A-1.008(2)(d)1.b., F.A.C., which states that inserts are a component part of a newspaper or magazine when such inserts are labeled with a masthead, logo, or supplement line as part of the designated newspaper or magazine publication into which they are to be inserted.

Sample copies of publications have been submitted for our review.

Taxpayer seeks advisement as to whether the two publications including the inserts qualify for the exemption provided under s. 212.08(7)(w), F.S.

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. 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, case law, and policy in evaluating the publications under advisement the department holds to its previous conclusion issued in the August 3, 1993, Letter of Technical Advice that "Publication #1" and "Publication #2" do satisfy all of the above discussed requirements of a shopper except that of consisting of primarily advertising in more than one-half of the published editions during any 12-month period. Therefore, determination of whether the "primarily advertising" requirement has been satisfied would necessarily require the examination of a full complement of the editions of both publications for a twelve month period to determine if more than one-half of each of the publications for such period contained in excess of 50% advertising.

Accordingly, it would appear that the publications would qualify for exemption from sales and use tax specified in s. 212.08(7)(w), F.S., as a shopper, provided that, like the samples examined, more than one-half of the editions published in a 12-month period contained in excess of 50% advertising.

The advertising inserts, however, do not satisfy all facets of the above criteria for a "shopper", as they are unrelated to the front page banner, lacking in conformity as to title and general nature of content from issue to issue.

The department does not concur with the taxpayer's position that the advertising inserts would fall under the umbrella of Rule 12A-1.008(2)(d)1.b., F.A.C., as being a component part of "Publication #1" and "Publication #2" as shoppers. The rule cited limits the exception to inserts as a component part of newspapers and magazines and does not extend to shoppers. Further, there is no intent expressed in Rule 12A-1.008(10)(a), F.A.C., to include advertising inserts as a component part of

shoppers. Therefore, the Department holds to its previous conclusion issued in the August 3, 1993, Letter of Technical Advice that the advertising inserts do not qualify for the exemption from sales and use tax provided in s. 212.08(7)(w), F.S., as constituting 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:___

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. #19392