Is a harness-racing track program sold at retail exempt from sales tax as a newspaper or periodical?

Plain-English summary

Richard and Mary Pugliese, doing business as Five Point Grocery, sold copies of "Past Performances," a publication of Saratoga Harness Racing, Inc., and asked whether the receipts were exempt from sales tax as sales of a newspaper or periodical under § 1115(a)(5).

The Department held the publication is neither a newspaper nor a periodical, so its sales are taxable.

• The exemption has defined tests. Section 1115(a)(5) exempts "newspapers and periodicals." A newspaper (20 NYCRR 528.6(b)) must be issued at stated short intervals, not be a book, be available to the public, and contain matters of general interest and reports of current events. A periodical (20 NYCRR 528.6(c)) must be issued at least four times a year at stated intervals, not be a book, be available to the public, have continuity of title and general content, and have each issue contain a variety of articles by different authors.
• What "Past Performances" actually is. Each issue is mainly the track's official race program — lists of entered horses and their racing records, repeated facility information, and information or ads about upcoming races — plus, in most issues, one signed article and less than a page of short unsigned pieces.
• It fails the "stated intervals" requirement. The copies carry no statement of publication frequency; the publication is issued once for each ten-race program, not at fixed intervals.
• It fails the content requirements. Its general-interest items and current-events reports are not substantial in number or length, and each issue does not contain a variety of articles by different authors — most issues have just one signed article, with no evidence of a staff regularly producing unsigned articles.
• Result: it is neither a newspaper nor a periodical; the receipts are taxable as either tangible personal property or an information service.

What this means for you

A program or specialty listing isn't automatically an exempt "periodical." The newspaper/periodical exemption is not about the paper format — it's about meeting every element of the regulatory tests. A publication that is essentially a functional listing (here, a race card) with a little editorial content sprinkled in will usually fail.

Watch the two hardest elements: stated intervals and variety of articles. "Past Performances" was published per race program rather than on a calendar, and each issue leaned on a single article. To claim the exemption, a publisher should be able to show a fixed publication schedule and a genuine variety of articles by different authors in each issue.

If it's not exempt, decide which taxable category applies. The Department noted the receipts are taxable either as tangible personal property or as an information service under § 1105(c)(1). A publisher or reseller should determine which characterization fits and collect tax accordingly.

Common questions

Q: Why doesn't a racing program qualify as a periodical?
A: It isn't issued at stated intervals (it comes out once per ten-race program with no stated frequency), its general-interest content isn't substantial, and each issue lacks a variety of articles by different authors — so it fails the 20 NYCRR 528.6(c) test.

Q: Could it still be an exempt newspaper?
A: No. A newspaper must be issued at stated short intervals and contain substantial matters of general interest and reports of current events; the program's general-interest content was not substantial, so it didn't qualify.

Q: If the program isn't exempt, how are the sales taxed?
A: As taxable receipts from either the sale of tangible personal property or an information service under § 1105(c)(1).

Citations and references

Statutes, regulations and authority:

• Tax Law § 1105(a) — imposes sales tax on receipts from retail sales of tangible personal property
• Tax Law § 1115(a)(5) — exempts newspapers and periodicals
• Tax Law § 1105(c)(1) — taxes the service of furnishing information
• 20 NYCRR 528.6(b) — four-part definition of a "newspaper"
• 20 NYCRR 528.6(c) — five-part definition of a "periodical," including a variety of articles by different authors in each issue

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1981.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/h81_126s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-H-81(126)S
Sales Tax
July 13, 1981

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S810320C

On March 20, 1981, a Petition for Advisory Opinion was received from
Richard and Mary Pugliese (D/B/A Five Point Grocery), 42 Park Place, Saratoga
Springs, New York 12866.
The issue raised is whether Petitioners' receipts from sales of a
publication of Saratoga Harness Racing, Inc., entitled "Past Performances," are
exempt from New York State sales tax as receipts from sales of newspapers or
periodicals, pursuant to Section 1115(a)(5) of the Tax Law.
Section 1105(a) of the Tax Law imposes a tax on the receipts from retail
sales of tangible personal property. Section 1115(a)(5) of the Tax Law provides
for an exemption from such tax with respect to "newspapers and periodicals."
Section 528.6(b) of the Sales and Use Tax Regulations defines the term
"newspaper," in relevant part, as follows: "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." 20 NYCRR 528.6(b).
Section 528.6(c) of the Sales and Use Tax Regulations defines the term
"periodical," in relevant part, as follows: "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; (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." 20 NYCRR 528.6(c).
Section 1105(c)(1) of the Tax Law imposes a tax on receipts from the sale
of the service of the "...furnishing of information by printed, mimeographed or
multigraphed matter or by duplicating written or printed matter in any other
manner, including the services of collecting, compiling or analyzing information
of any kind or nature and furnishing reports thereof to other persons...."
The publication in question is available to the public at approximately
forty locations in New York State and are marketed throughout the United States
and Canada.
During the period April 17, 1980, through March 14, 1981, 218 issues of
"Past Performances" were published. From April 17 through November 22, issues
appeared daily except Sundays and except September 2 through September 6. Also,
one Sunday issue was printed as well as a second Saturday issue on July 5. "Past
Performances" was published three times each week during the period January 2,
1981 through March 14, 1981. During the calendar year 1981, it is expected that
"Past Performances" will be published 213 times.

TP-8 (4/80)

JAMES H. TULLY, JR., COMMISSIONER
LOUIS M. JACOBSON, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

2
TSB-H-81(126)S
Sales Tax
July 13, 1981

The publication neither singly nor when successsive issues are put together
constitutes a book.
Two hundred eighteen copies of the publication "Past Performances" were
submitted with the Petition. Each issue consists primarily of the official
program of Saratoga Harness Racing, Inc.'s race track (mostly lists of each horse
entered and its prior racing record), repeated information about race track
facilities, and information about or advertisements for future races at the
track. Most issues also contain one signed article and less than one full page
of unsigned short articles on various subjects. The publication has continuity
as to title and the nature of its content.
One of the criteria common to the above definitions of the terms
"newspaper" and "periodical" is that the publication must be published at stated
intervals. The 218 copies of "Past Performances" submitted with the Petition do
not contain any statement as to the frequency of publication. Rather than being
issued at specific intervals, the publication is apparently issued once for each
ten race program presented at Saratoga Harness Racing, Inc.'s facilities.
The items of general interest and reports of current events contained in
most of the issues submitted are not substantial either in number or in length.
Although Petitioners state that nine different authors contributed articles to
the issues submitted, each issue does not contain a variety of articles by
different authors. Not only do most issues contain only one signed article, there
is no evidence of the existence of a staff of writers regularly preparing
unsigned articles for each issue.
Accordingly, the publication at issue does not constitute either a
"newspaper" or a "periodical" within the meaning and intent of section 1115(a)(5)
of the Tax Law. Petitioners' receipts from the sale of the publication are
therefor not exempt from tax pursuant to Section 1115(a)(5). Rather, such
receipts are subject to tax as receipts from the sale of either tangible personal
property or an information service.

DATED: June 24, 1981

s/LOUIS ETLINGER
Deputy Director
Technical Services Bureau