Could an association obtain a Texas sales-tax refund for monthly publications prepared and mailed to members by an outside publisher?

Plain-English summary

An association sent information to an outside publisher each month. The publisher compiled, printed, bound, and mailed the publication to members, then billed the association for the publication plus sales tax. Members received it as a membership benefit.

The association asked for a refund for the period described in the letter as “later 1986 through September, 1987.” The Comptroller denied it because the association was acting as publisher rather than as a purchaser of publications. The Texas Monthly court case referenced in the request therefore did not entitle it to a refund.

What this means for you

Outsourcing physical production and mailing did not make the association merely a buyer of finished publications. The Comptroller focused on its role in producing the recurring member benefit.

Common questions

Was the refund allowed? No.

Why? The association was treated as the publisher.

Who produced and mailed the publication? An outside publisher.

Did the letter explain the referenced court case? No. It only said that it did not provide a refund on these facts.

Citations and references

• Texas Monthly court case (referenced by name only; no citation appears in the ruling text)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9102L1070C01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP
Comptroller February 4, 1991

Dear ***:

Thank you for your recent question regarding the Texas Monthly
Court Case and refunds on publications. Your letter is restated
in part with response below.

Facts: An association submits information to a publisher monthly.
The publisher compiles the information into printed matter. The
publisher prints, binds, and mails the publication out to the as-
sociation members monthly. The publisher then bills the associa-
tion for the publication, plus sales tax. The publication is a
benefit from the membership in the association. There is only an
association membership charge, which no sales tax is collected
on.

Question: For the period from later 1986 through September, 1987
is the association entitled to a refund for the sales tax paid
on this publication?

Response: The association is acting as a publisher rather than a
purchaser of publications. As a result, they are not entitled
to a refund as a result of the Texas Monthly Court Case.

This opinion is based on the facts you presented. Other facts,
though similar, may yield different results.

If you have questions or need more information, please call our
toll-free number 1- 800- 531- 5441. My direct line number is
463-4680 [FAX (512) 475- 0900]. You may write to me in care of
Tax Administration Division.

Sincerely,
Al Van Allen
Tax Administration Division