Is an economic-commentary newsletter that comes out only 'approximately' quarterly an exempt periodical?

Plain-English summary

Sage Alternatives, Inc. publishes "Sage Advisory," an economic commentary that reviews and analyzes past events for subscribers. It says the publication comes out "approximately" quarterly and asked whether it is an exempt periodical under Tax Law § 1115(a)(5).

The Department said no — it's taxable, because it isn't published at stated intervals.

• A periodical must appear regularly. Under 20 NYCRR § 528.6(c)(1), a "periodical" must be published at stated intervals, at least four times a year; not be a book; be available to the public; have continuity of title and content; and carry a variety of articles by different authors. A newsletter can qualify, and USPS second-class mailing status is a factor (§ 528.6(c)(2)).
• "Sage Advisory" flunked the frequency test. Looking at the copies submitted, the Department found the last two issues were seven months apart — so despite the "approximately quarterly" label, the publication is not issued at stated intervals at least four times a year.
• Result: it does not qualify as an exempt periodical and is subject to sales tax.

What this means for you

"Approximately quarterly" isn't good enough. New York's periodical exemption requires publication at stated intervals, at least four times a year. If your issues actually come out irregularly — a seven-month gap, for instance — you fail the frequency requirement even if you intend to publish quarterly.

Regularity is provable from your own back issues. The Department decided this by looking at the dates on the copies submitted. If you're claiming the exemption, your publication history has to actually show the cadence you assert. Sporadic publishing is the easiest way to lose the exemption.

Second-class postal status helps your case. The regulation says USPS second-class (periodical) mailing status is considered in deciding whether a publication is a periodical. Qualifying for it is evidence you meet the standards; publishing irregularly undercuts both.

Common questions

Q: I intend to publish quarterly but sometimes slip. Is my newsletter still an exempt periodical?
A: Not if it isn't actually issued at stated intervals at least four times a year. The Department found a "Sage Advisory" with a seven-month gap between issues did not meet the frequency requirement and was taxable.

Q: What exactly does a periodical have to satisfy?
A: Under 20 NYCRR § 528.6(c)(1): published at stated intervals at least four times a year; not a book; available to the public; continuity of title and content; and a variety of articles by different authors.

Q: Does it matter that my newsletter's articles aren't signed?
A: No — a newsletter with unsigned articles prepared by a staff of writers is treated as having articles by different authors. Sage Advisory's problem was frequency/regularity, not authorship.

Citations and references

Statute and regulation:

• Tax Law § 1115(a)(5) — exempts receipts from retail sales of newspapers and periodicals
• 20 NYCRR § 528.6(c)(1) — a "periodical" must be published at stated intervals at least four times a year; not constitute a book; be available for public circulation; have continuity of title and general content; and contain a variety of articles by different authors
• 20 NYCRR § 528.6(c)(2) — a newsletter may qualify as a periodical if it meets the standards; unsigned articles by a writing staff count as articles by different authors; USPS second-class mailing status is considered

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1988.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a88_37s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-88(37)S
Sales Tax
July 20, 1988

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S880111B

On January 11, 1988, a Petition for Advisory Opinion was received from Sage Alternatives,
Inc., 5820 Main St., Suite 500, Williamsville, New York 14221.
The issue raised is whether Petitioner's publication "Sage Advisory" is an exempt periodical
as provided by § 1115(a)(5) of the Tax Law.
Petitioner states that it publishes its publication "approximately" on a quarterly basis. The
publication is an economic commentary in which past events are reviewed and analyzed for
subscribers. Petitioner has submitted copies of its publication for review. It is noted that the dates
of the publications submitted by Petitioner indicate a seven month interval between the last two
issues.
Section 1115(a)(5) of the Tax Law exempts "newspapers and periodicals." The definitions
of the terms "newspaper" and "periodical" are contained in section 528.6 of the sales and use tax
regulations which provides, in part:
(b)
Definition of newspaper. (1) In order to constitute a newspaper, a publication
must conform generally to the following requirements:
(i) it must be published in printed or written form at stated short intervals,
usually daily or weekly;
(ii) it must not, either singly or, when successive issues are put together,
constitute a book;
(iii) it must be available for circulation to the public; and
(iv) it must contain matters of general interest and reports of current events.

(c)
Definition of a periodical.
(1)
In order to constitute a periodical, a
publication must conform generally to the following requirements:
(i) it must be published in printed or written form at stated intervals, at least
as frequently as four times a year;
(ii) it must not, either singly or, when successive issues are put together,
constitute a book;
(iii) it must be available for circulation to the public;
(iv) it must have continuity as to title and general nature of content from issue
to issue; and
(v) each issue must contain a variety of articles by different authors devoted
to literature, the sciences or the arts, news, some special industry, profession, sport
or other field of endeavor.
RODERICK G. W. CHU, COMMISSIONER
TP-8 (9/88)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-88(37)S
Sales Tax
July 20, 1988

(2) A publication which may be known as or considered to be a newsletter
may qualify as a periodical if it conforms to the above standards. Where a newsletter
has no signed articles, but has a staff of writers who originally prepare articles, such
publication will be considered to have articles by different authors. If a publication
has been classified by the United States Postal Service as one which is entitled to
second class mailing privileges, that fact will be considered in determining whether
or not the publication is a periodical. (Emphasis supplied).
Upon review of Petitioner's publication, it is determined that it does not meet the criteria of
an exempt periodical because the "Sage Advisory" is not published at stated intervals. While
Petitioner has stated that his advisory is published "approximately" quarterly, it is apparent that such
is not the case. Accordingly, the "Sage Advisory" is subject to sales tax.

DATED: July 20, 1988

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.