Did the exemption for books and periodicals from qualified nonprofit publishers depend on which retailer sold the publication?

Plain-English summary

A seller asked about books and periodicals published and distributed by nonprofit religious, philanthropic, charitable, and similar organizations.

The Comptroller explained that "published and distributed" meant the qualified nonprofit both produced the publication and shipped, marketed, or sold it. The exemption did not give one retailer an advantage over another.

If two retailers sold a book from a qualified nonprofit publisher, the sale was exempt at either store. If the publisher did not meet Rule 3.299's criteria, the sale was taxable at either store.

What this means for you

The letter made the publisher's qualification decisive, not the identity of the retailer. A store reselling a qualifying nonprofit publication received the same stated treatment as another seller of that publication.

Common questions

Did a retailer have to be the nonprofit publisher? No. The example applied the exemption at either store selling the qualifying publication.

What did "published and distributed" mean? The nonprofit produced the publication and also shipped, marketed, or sold it.

What if the publisher did not qualify? The sale was taxable regardless of the store.

Citations and references

• 34 Tex. Admin. Code Rule 3.299 — criteria for the nonprofit-publication treatment discussed in the letter

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9106L1114C03

Original ruling text

June 11, 1991

Dear **:

Thank you for your recent letter regarding the sale of books and
periodicals that are published and distributed by non-profit religious,
philanthropic, charitable and similar organizations.

The term published and distributed simply means that the qualified
non-profit organization ships, markets, or sells the publications it produces
in addition to publishing them. This means the ***** does not have a
competitive advantage over anyone. If both firms sold a book by a qualified
non-profit publisher, the sale would be exempting either store. If the
publisher did not fit the criteria in rule 3.299 (enclosed), the sale would be
taxable in either store.

I hope this information proves helpful.

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 or write.
You may reach me by calling toll free, (800) 531-5441. My direct line number
is (512) 463-4680. The number for FAX transmissions is (512) 475-0900. You
may write to me in care of Tax Administration Division

Sincerely,

Al Van Allen
Tax Administration Division