What publication-refund items did Texas audit guidance allow or disallow after the Texas Monthly case?

Plain-English summary

This January 21, 1991 internal memo gave Texas audit personnel a nonexclusive list of items being allowed or disallowed for refunds related to the Texas Monthly case.

Allowed examples included tax reports and forms reports with synopses, reference manuals and other publisher publications, annotated tax and federal revenue forms with synopses, and AAA travel guides. Disallowed examples included reproductions of IRS publications, a business-expense log, listed electronic information and news services, stock quotations, Standard & Poor's and multiple-listing services, graphics and printing such as business cards and brochures, information lists and legal directories, and maps.

The stated audit guideline was whether the company published part of the item or merely reproduced it. Instructions and information compiled by the publisher could qualify; simply reproducing forms and their existing instructions did not.

What this means for you

The memo focused on original publisher contribution, not the physical appearance of the product. It also cautioned that both the allowed and disallowed lists were not exhaustive.

Common questions

Were all publications allowed? No.

What was the central test? Whether the company published part of the item or simply reproduced existing material.

Could publisher-created form instructions qualify? Yes, according to the memo's example.

Were information services and ordinary printing items allowed? The listed information services, graphics, business cards, catalogs, brochures, lists, directories, and maps were disallowed examples.

Did the memo provide a citation for the Texas Monthly case? No.

Citations and references

• Texas Monthly case (named without a citation in the memo)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9101L1067C02

Original ruling text

John Sharp,

DATE: January 21, 1991 AM 1465

TO: All Audit Personnel

FROM: Ledford Kelly

SUBJECT: Refunds Relating to Texas Monthly

The Credits Verifications Section of Revenue Accounting has compiled
a list of items relating to the Texas Monthly case which are either
being allowed or disallowed, based on information furnished to them
by Tax Administration. The following lists are not all inclusive:

Allowed items:

For ABC Publishing Company: Federal Tax Reports and Federal Tax Forms
Reports, including the synopses.
For XYZ Publishing Company: XYZ reference manuals and other XYZ Pub-
lications.
For COMPANY A: all annotated tax forms and federal revenue forms, in-
cluding the synopses. AAA travel guides.

Disallowed items:

For ABC: reproductions of IRS publications and Business Expense Log.
For XYZ: XYZ usage charges and , or any other abbreviation of XYZ.
Information services such as NEXIS, LEXIS, MEDIS, PHINET, Information
America; news services such as United Press International and Associ-
ated Press; stock quotations; Standard and Poor; and MLS, Multiple
Listing Services.
Graphics and other printing services such as business cards, stock
certificates, catalogs, brochures and other items purchased for pur-
poses such as advertising.
Lists of information such as , , *** Reporting and
Legal Directories. Maps.

In determining whether an item qualifies for a refund or not, Revenue
Accounting applies the following guideline which should also be used
in audit situations:

Is a portion of the item in question published by the company or is it
simply reproduced by the company? Specifically, if a publishing compa-
ny prepares and distributes the instructions for completing a form,
then the publication is exempt (i.e., ABC has compiled information and
instructions for completing federal tax reports, so the publication is
exempt. If, however, ABC only reproduces the forms and their related
instructions, the publication is not exempt.)

If you have any questions, contact me at 463-3940.