Was a free monthly city publication containing 60% to 70% advertising exempt as a shopper or community newspaper, or taxable as a magazine?

Plain-English summary

The free monthly publication was taxable as a magazine and did not qualify for the shopper or community-newspaper exemption. Although 60% to 70% of each issue was paid advertising, the Department found that its overall character was incompatible with those exempt categories.

The publication carried celebrity interviews, event photographs, business and fashion features, environmental reports, event listings, and shopping content. It also had the objective look and feel of a magazine and repeatedly called itself a magazine in its own credits and publisher material.

Because "magazine" was not statutorily defined, the Department used the term's plain and ordinary meaning. It also applied the rule that tax exemptions are narrowly construed, resolving doubt in favor of taxation.

What this means for you

Free distribution and a high advertising percentage do not automatically create an exempt shopper or community newspaper. The Department looked at the publication as a whole, including editorial mix, presentation, and how the publisher described it.

The ruling's test was qualitative rather than a single advertising-percentage threshold.

Common questions

Q: Did free distribution make the publication exempt? No.

Q: Was 60% to 70% advertising enough for the shopper exemption? No. The Department still classified the publication as a magazine based on its overall character.

Q: Why did the publisher's own wording matter? The publication repeatedly described itself as a magazine, reinforcing the Department's plain-meaning classification.

Q: What was the final tax result? The publication was taxable as a magazine under the cited provision.

Citations and references

• Fla. Stat. § 212.05(1)(i) — tax on magazines sold or used in Florida
• Fla. Stat. § 212.08(7)(w) — exemptions for specified subscriptions, shoppers, and community newspapers
• Sudath Van Lines, Inc. v. Department of Environmental Protection, 668 So. 2d 209 (Fla. 1st DCA 1996) — ordinary meaning for undefined terms
• State v. Belle, 286 So. 2d 529 (Fla. 1974) — strict construction of exemptions
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-056

Original ruling text

SUMMARY

The Department determined that the taxpayer is not entitled
to claim the exemption for "shoppers" and "community
newspapers" because its publication is incompatible with it
being a "shopper" or "community newspaper." It determined
that the publication is taxable as a "magazine" based upon
the objective plain and ordinary meaning of that term,
within its common use in the English language. The
Publication, objectively has the look and feel of a
"magazine." Furthermore, the taxpayer itself repeatedly
refers to the publication as a "magazine" throughout the
publication.

Aug 20, 1997

Re: Technical Assistance Advisement 97A-056
Sales and Use Tax - Taxability of Publication
Sections: 212.05, 212.06, F.S
Petitioner:

XXX (Taxpayer)

XXX (Publication)

Dear :

This is a response to your request dated June 10, 1997, received
July 1, 1997, for the issuance of a Technical Assistance
Advisement ("TAA") concerning the above referenced 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. This response to your request constitutes
a TAA and is issued to you under the authority of s. 213.22,
F.S.

STATED FACTS

You provide the following facts, in part:

XXX (hereinafter Taxpayer), a Florida corporation, is the

publisher and distributor of [Publication]. Taxpayer
distributes approximately 60,000 copies of each issue of
[Publication], on a monthly basis, free of charge,
primarily to restaurants, hotels, retail outlets and
residential areas in and around XXX.

Each issue of [Publication] contains approximately 60% to
70% of paid advertising of a broad range of products and
services offered by numerous unrelated businesses including
but not limited to: local real estate developers and
brokers; retail clothing, home furnishing and accessories
stores; malls; night clubs; entertainment attractions;
restaurants; and hotels. The balance of each issue of
[Publication] contains reports of current events and
matters of general interest which appeal to a wide spectrum
of the general public, including news of general and
community interests, editorial comments and articles,
including but not limited to: celebrity interviews with
personalities in the world of film, fashion, music, arts,
sports and politics; photographs capturing special events
and popular spots in and around XXX including parties,
clubs, restaurant openings, gallery openings and special
events; articles introducing new businesses and trends;
features dealing with international fashion; environmental
reports on the country's most current issues, including
those topics most relevant to Florida; a mini planner for
the month, giving readers information on events, new
places, music, food, books, etc.; and articles containing a
sampling of the best gifts from XXX most popular shops and
boutiques.

The facts presented in this TAA request are virtually identical
to the facts presented in TAA 95A-018 issued to the taxpayer on
May 4, 1995, and July 17, 1995.

The Department has sample copies of the publication. During
review of the sample copies, it became readily apparent that
taxpayer considers the publication to be a magazine. On the
inside credits, Taxpayer refers to each publication as a
"Magazine." Taxpayer advertises that it is part of the XXX. In
the January 1995, edition, the Publisher and Co-Publisher, in

the "Letter from the Publisher" article refer to the publication
in the following manner:

"... [Publication] is now the second-largest monthly city
magazine in the United States." (E.S.)

REQUESTED ADVISEMENT

You assert that the Publication is exempt as a free "shopper or
community newspaper" under s. 212.08(7)(w), F.S., and that it is
not taxable as a "magazine" under s. 212.05(1)(i), F.S.

LAW AND ANALYSIS

The Department, specifically incorporates its previous TAA
issued to the taxpayer, herein.

Section 212.05, F.S., expressly taxes the sale or use of
magazines, and provides, in part:

212.05 Sales, storage, use tax.-- 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:
...
(i) At the rate of 6 percent on the retail price of
magazines sold or used in Florida. (E.S.)

The term "magazines" as provided above is not defined. Absent a
statutory definition, words should be given their plain and
ordinary meaning. Sudath Van Lines, Inc. v. Department of

Environmental Protection, 668 So.2d 209 (Fla. 1st DCA 1996);
Specialty Restaurants Corp. v. City of Miami, 501 So.2d 101, 102
(Fla. 3rd DCA 1987).

The exemption for "Shoppers and community newspapers" is
authorized by s. 212.08(7)(w), F.S., which states, in part:

(w) Certain newspaper, magazine, and newsletter
subscriptions, shoppers, and community newspapers.--...
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. (E.S.)

Exemptions from taxing statutes are special privileges granted
by the legislature and must be strictly construed, "with any
doubt being resolved in favor of the state." State v. Belle,
286 So.2d 529 (Fla. 1974). See also United States Gypsum v.
Green, 110 So.2d 409 (Fla. 1959); Green v. Pederson, 99 So.2d
292 (Fla. 1957). Where there are two possible reasonable
interpretations of an exemption, the narrower interpretation is
the preferred interpretation. See Green v. Pederson, supra,
Housing by Vogue, Inc. v. Department of Revenue, 403 So.2d 478
(Fla. 1 DCA 1981), Pioneer Oil Co. v. Department of Revenue, 401
So.2d 1319 (Fla. 1981), State ex rel. Szabo Food Services, Inc.
v. Dickinson, 286 So.2d 529 (Fla. 1973).

In short, if publication is a "magazine" it is incompatible with
it being a "shopper" or "community newspaper" and it is not
exempt from tax under s. 212.08, above.

The Department believes, after examining the sample publications
that they are "magazines." This is based upon the objective
plain and ordinary meaning of that term, within its common use
in the English language. The Publication, objectively has the
look and feel of a "magazine." It is clear that even the
taxpayer believes it is a "magazine," as that term is plainly
and ordinarily meant. This analysis is consistent with the

judicially mandated narrow interpretation of the exemption
provided under s. 212.08(7)(w), F.S.

CONCLUSION

Publication is taxable as a magazine.

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 confidential
information, we request you notify the undersigned in writing
within 15 days of any deletions you wish made to the request or
this response.

Should you have any further questions concerning this matter,
please do not hesitate to contact me.

Sincerely,

Eric A. de Moya, Esq.
Tax Law Specialist
Technical Assistance and Dispute Resolution
(904) 922-4714

Control No. 29633