97-041
Response
July 16, 1997
June 24, 1997
Dear Ms. Rees:
Please find enclosed two copies of the most recent
issues of the NEWSLETTER. Before embarking on publishing this monthly community
newsletter, we contacted the Utah State Tax Commission and asked if there was a
sales tax on advertising in a publication such as ours. The answer was “no”
after those we had spoken to referred to whatever guidelines they had in front
of them. Then, this last week we received a Sales and Use Tax Return form in
the mail. We then called the State Tax Commission and spoke to NAME and he was
kind enough to FAX a page of the Tax Code regarding newspapers, magazines and
advertising. In R865-195-65, Section 59-12-103 and 59-12-104, it states,
"2. To be classified as a newspaper, the publication must appear to be a
newspaper in the general or common sense and must contain the following
elements: a. published at short intervals, daily or weekly; b. must not, when
its successive issues are put together, constitute a book; c. must be intended
for circulation among the general public; d. must contain matters of general
interest and report on current events.
It is our opinion that our publication fits all
criteria for not being subject to sales and use tax. NAME suggested that we
consult with you regarding Item a. published at short intervals, daily, or
weekly; He stated that since NEWSLETTER is published monthly that it was open
to interpretation if it qualified as being published at short intervals. We
understand that there is specific use and meaning of punctuation in writing
legal and tax code. It is clear to us that in the use of commas as they appear
in Item A.2.a., the terms daily, or weekly are not
exclusively descriptive of the term short interval, and the way it is
worded allows other interpretations of the term short intervals. Our first
issue was published February of this year and we have not collected sales tax
on the advertisements that have appeared in NEWSPAPER. We would appreciate your
interpretation of the Tax Code in relationship to our publication at this time.
We have been operating in accordance with the information we received over the
phone prior to our embarking on this venture. Please inform us of our
publication's status in terms of exemption from sales and use tax.
Thank you. Sincerely,
NAME
July
16, 1997
NAME
ADDRESS
CITY STATE ZIP
Advisory Opinion - Application of Sales Tax to Sales
of Advertising Space
Dear NAME,
We
have received your request for an opinion as to the taxability of the
advertisements in your publication, the NEWSPAPER. As we understand the facts, the NEWSLETTER
is a monthly newsletter published for the CITY area containing matters of general
interest to the community.
The
advertising space sold in the NEWSPAPER is not subject to sales
tax. Utah Administrative Rule
R865-19S-65C states that “advertising
space sold in newspapers, magazines, or otherwise is not subject to tax.” Your publication
probably falls under the definition of “newspaper” as outlined in Utah
Administrative Rule R865-19S-65(C), because it is published at relatively short
intervals (monthly), its successive issues are not put together in a book, it
is intended for circulation among the general public, and it contains matters
of general interest to its readers.
But
even if the NEWSPAPER did not fall under the definition of a newspaper,
that is, even if the monthly publication interval were too long to qualify it
as a newspaper, it would still qualify as a “magazine or otherwise.” Therefore, the advertising space is not
subject to sales tax.
Of
course, your advertisers must pay sales tax on items they use and consume to
produce the artwork (if any) used in their advertisements.
Please
let us know if you have any other questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
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