When were printed inserts for Texas newspapers or magazines exempt from sales tax?

Plain-English summary

Printed inserts distributed as part of a qualifying newspaper were not taxable if the printer delivered them to the person responsible for distributing the newspaper. That result applied even when the printer's customer was not the newspaper itself.

The printer needed an exemption certificate from its customer and documentation showing direct delivery to the newspaper for distribution. If it instead delivered the inserts to the customer or another third party that was not responsible for newspaper distribution, the printer had to collect tax.

Magazine inserts did not qualify for the same exemption and were taxable whether billed as a lump sum or separately. The exception was a sale to the magazine publisher for resale as part of the magazine, supported by a valid, properly completed resale certificate.

What this means for you

For newspaper inserts, delivery destination and records were decisive. For magazine inserts, the ruling required tax unless the publisher bought them for resale and supplied a valid resale certificate.

Common questions

Were newspaper inserts always exempt? No. They had to be part of a qualifying newspaper and delivered by the printer to the person responsible for newspaper distribution.

Could the printer's customer be someone other than the newspaper? Yes, if the inserts were delivered directly to the newspaper for dissemination and the printer kept the required certificate and documentation.

What if the printer delivered the inserts back to its customer? The printer had to collect tax if that customer or other recipient was not responsible for newspaper distribution.

Were magazine inserts taxable? Generally yes, unless sold to the magazine publisher for resale as part of the magazine with a valid resale certificate.

Citations and references

• 34 Tex. Admin. Code § 3.299(a)(3) (newspapers and newspaper inserts)
• 34 Tex. Admin. Code § 3.287 (exemption certificates)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9101L1069B13

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

January 24, 1991

Dear *:

We received your letter questioning the taxability of newspaper
and magazine inserts.

Newspaper inserts that are distributed as a part of a publication
which itself constitutes a newspaper are not taxable provided that
the inserts are delivered by the printer to the person responsible
for the distribution of the newspaper. See section (a)(3) of the
enclosed Rule 3.299 relating to newspapers.

If your company is printing inserts and delivering them to the
newspaper for dissemination, then your charge to your customer
for the inserts is not taxable even though your customer is not
the newspaper. You should get an exemption certificate from your
customer and keep documentation showing the inserts were delivered
directly to a newspaper for distribution. Enclosed is a copy of
Rule 3.287 relating to exemption certificates.

When you deliver the inserts to your customer or to a third party
who is not responsible for distribution of the newspaper, you
should collect tax on your charge for the inserts.

Magazine inserts do not qualify for the exemption from the tax.
You should collect tax on your charge for the magazine inserts
whether billed lump sum or separate charges for each insert.
However, if the inserts are sold to the magazine publisher for
resale as part of the magazine, a valid and properly completed
resale certificate can be accepted in lieu of the tax.

This opinion is based on the facts presented. If there are
additional or different facts, the opinion may change.

If you have any questions you may call or write Tax Administration
Division. You may call toll free 1-800-252-5555, or our regular
number is 512/463-4600. my extension is 3-4658.

Sincerely,
Sherry Buckley
Tax Administration Division