Publisher publishes and prints at its own printing plant the following publications:

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Dora Berry
6 years ago
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1 LOUISIANA SALES TAX NEWSPAPER INDUSTRY In the last 10+ years, several major Legislative changes have occurred that affect the newspaper industry as it relates to the taxation of production and distribution of publications: The sales tax exemption for newspapers that was formerly provided by R.S. 47:305(D)(1)(e), and which was fully or partially suspended at varying rates since 1986, was repealed and replaced 1 with an exclusion for newspapers 2 from the definition of tangible personal property. The advance sales tax, formerly imposed upon retailers on their purchases of tangible personal property for resale, was repealed. 3 A sales, use, lease, and rental tax exclusion for machinery and equipment used primarily to produce news publications was added. 4 The law was amended to provide a special methodology for the payment and collection of the tax on purchases by a publishing business of printing services provided by an unrelated third party to print news publications was added. 5 The sales tax exemption for certain raw materials used in the printing process (see R.S. 47: ) was restored to three-quarters effectiveness, with only the one percent ( permanent penny ) remaining due. 7 The following sales tax matrix provides a synopsis of the interpretation of Louisiana laws regarding the taxation of various components of producing and distributing a publication. The matrix is divided into two categories - Production and Distribution. This matrix should be viewed as providing best practices, but should not be relied upon as tax advice being rendered by the LPA, Broussard Partners & Associates or Roedel Parsons. A. PRODUCTION Publisher publishes and prints at its own printing plant the following publications: I. Paid Distribution, Newspaper resale certificate 8 resale certificate 9 Page 1 of 6

2 Tax due (1%) 10 None 11 II. Free Distribution, Non-Newspaper Product 12 Tax due (1%) 13 Tax due applicable local rate Tax due (1%) 14 Tax due applicable local rate III. Paid Distribution, Non-Newspaper Product 15 None; paper, ink, and packaging material 16 can be purchased tax-free with resale certificate None; paper, ink, and packaging material can be purchased tax-free with resale certificate Tax due (1% on items listed in R.S. 47:305.44; 4% on all other items) None on items listed in R.S. 47:305.44; all other items taxable at applicable local rate Publisher/Printer prints the following publications for non-related publisher: IV. Paid Distribution, Newspaper resale certificate resale certificate Page 2 of 6

3 Tax due (1% on items listed in R.S. R.S. 47:305.44; 4% on all other items) None on items listed in R.S. 47:305.44; all other items taxable at applicable local rate V. Free Distribution, Non-Newspaper Product 17 Since the advance sales tax is no longer levied, can be purchased tax-free with a resale certificate can be purchased tax-free with resale certificate Tax due (1% on items listed in R.S. R.S. 47:305.44; 4% on all other items) None on items listed in R.S. 47:305.44; all other items taxable at applicable local rate VI. Paid Distribution, Non-Newspaper Product None; can be purchased tax-free with resale certificate None; can be purchased tax-free with resale certificate Tax due (1% on items listed in R.S. R.S. 47:305.44; 4% on all other items) [Ray is 4% correct?] Materials that are eligible for the exemption provided by R.S. 47: can be purchased tax-free. The partial and indefinite suspension does not apply to local sales and use taxes B. DISTRIBUTION I. Paid Distribution, Newspaper 1. Sale Of Newspaper By Publisher, Convenience Stores, Newsstands, et al. no state or local sales tax due on publication that qualifies as a newspaper, whether directly by publishers to subscribers, by dealers, convenience stores or newsstands to subscribers or purchasers, to dealers for resale, or through coin racks Page 3 of 6

4 II. Free Distribution, Non-Newspaper Product 1. Free Distribution By Publisher None 18 None III. Paid Distribution, Non-Newspaper Product 1. Sale of Non-Newspaper By Publisher (a) From Publisher s Coin Racks None 19 Tax due at applicable local rate (b) All Other Sales By Publisher Tax due (4%) Tax due - applicable local rate IV. Sale Of Newspaper or Non-Newspaper/Printing Services To Publisher/Buyer (Subsequent Paid Distribution) None; publisher/buyer can purchase the printed newspapers tax-free with resale certificate None; publisher/buyer can purchase the printed newspapers tax-free with resale certificate C. NEWS PUBLICATIONS I. Sale Of Non-Newspaper/Printing Services To Publisher/Buyer (Subsequent Free Distribution) If the printed product qualifies as a news publication 20, the publisher/buyer can acquire the printed product/printing services tax-free with R-1320 state sales tax exemption certificate 21. The publisher/buyer will then calculate and pay the state sales tax directly to the state LDR in accord with R.S. 47:301(3)(h) 22 or 47:301(13)(i) 23 If the printed product does not qualify as a news publication, tax due (4%) Page 4 of 6

5 If the printed product qualifies as a news publication, the publisher/buyer can acquire the printed product tax-free with R-1320 state sales tax exemption certificate or comparable local sales tax exemption certificate. The publisher/buyer will then calculate and pay the tax directly to the local tax authority in accord with R.S. 47:301(3)(h) or 47:301(13)(i) If the printed product does not qualify as a news publication, tax due applicable local rate 1 Act 480 of 2007, effective July 1, 2008, added R.S. 47:301(16)(m) [now renumbered as (16)(p)], which provides: (p) For purposes of sales and use taxes imposed by the state or any of its political subdivisions, the terms tangible personal property shall not include newspapers. 2 Prior to July 20, 2010, newspaper was defined for tax purposes by Louisiana Department of Revenue (LDR) as (3) an unbound publication appearing at regular intervals, having a second class mailing privilege, having a bona fide paid circulation to actual subscribers, publishing a substantial part of its content as news matter, and containing reports of happenings of recent occurrence of a varied character, such as political, social, moral and religious subjects and designed for the information of the general reader. LAC 61:I.4401C(3) Effective July 20, 2010, that definition was repealed., (Louisiana Register, Vol. 36, No. 7, p. 1566) and a new definition of newspaper was never adopted by LDR 3 Act 393, Section 3, of 2007, repealed R.S. 47:306(B) and (C), effective January 1, Act 339 of 2007, effective July 1, 2007, added R.S. 47:301(3)(i)(ii)(aa)(I)(eee) 5 Act 67 of 2002, effective July 1, 2002, added R.S. 47:301(3)(h), (13)(g) and (24) 6 R.S. 47: provides: A. The sales and use taxes imposed by the state under R.S. 47:302, R.S. 47:321, and R.S. 47:331 and by any political subdivision shall not apply to purchases and sales of the following, including all chemical supplies necessary to produce such items whether manufactured by a printer or purchased from a subcontractor: (1) Artwork. (2) Blankets and bars. (3) Chemicals. (4) Color separations. (5) Dies. (6) Film, including negatives. (7) Offset plates. (8) Press proofs and photomechanical proofs. (9) Layouts. (10) Typesetting. (11) Rubber plates. (12) Paper. (13) Ink. B. The exemption provided in Subsection A shall apply on and after the effective date of this Act. 7 Sunset of R.S. 47:302(R) and R.S. 47:331(D), effective July 1, R.S 47:321(H) did not sunset, thus, the exemption in R.S. 47: is not effective as to the 1 cent state sales tax imposed by R.S. 47:321(A) 8 Resale certificate can be obtained online at Page 5 of 6

6 9 Most, if not all, local taxing authorities accept the state issued resale certificate 10 R.S. 47:321(A) 11 BP Oil Co. v. Plaquemine Parish Government, 642 So.2d 1230 (La. 1994) and 651 So.2d 1322 (La Excludes news publications 13 Not deemed resale items, not further processed into articles of tangible personal property for sale at retail [R.S. 47:301(10)(c)(i)(aa)], and the exemption under R.S. 47: only applicable when the printed product is to be sold. 14 See Footnote 4 15 Excludes news publications 16 Includes but is not limited to rubber bands, bags, sleeves 17 Includes the purchase of newsprint, ink and other printing materials for all free distribution, non-newspaper products, including news publications 18 Not sale at retail and no use tax 19 Not sale at retail ; see R.S. 47:301(10)(b)(i) 20 News publication is defined as any printed periodical that appears at regular intervals, contains reports of a varied character, social, cultural, sports, moral, religious, or other subjects of general public interest, contains no more than seventy-five percent advertising; and is not owned or published as an auxiliary to another nonpublishing business, organization, or entity. See R.S. 47:301(24) 21 R-1320 state sales tax exemption certificate can be obtained online at 22 R.S. 47:301(3)(h) provides: (h) (i) For purposes of a publishing business which distributes its news publications at no cost to readers and pays unrelated third parties to print such news publications, the term "cost price" shall mean only the lesser of the following costs: (aa) The printing cost paid to unrelated third parties to print such news publications, less any itemized freight charges for shipping the news publications from the printer to the publishing business and any itemized charges for paper and ink. (bb) Payments to a dealer or distributor as consideration for distribution of the news publications. (ii) The definition of "cost price" provided for in this Subparagraph shall be applicable to taxes levied by all tax authorities in the state. 23 R.S. 47:301(13)(i) provides: (i) (i) For purposes of a publishing business which distributes its news publications at no cost to readers and pays unrelated third parties to print such news publications, the term "sales price" shall mean only the lesser of the following costs: (aa) The printing cost paid to unrelated third parties to print such news publications, less any itemized freight charges for shipping the news publications from the printer to the publishing business and any itemized charges for paper and ink. (bb) Payments to a dealer or distributor as consideration for distribution of the news publications. (ii) The definition of "sales price" provided for in this Subparagraph shall be applicable to taxes levied by all tax authorities in the state. Page 6 of 6

Department of Finance Post Office Box 3278 and Administration

STATE OF ARKANSAS OFFICE OF THE DIRECTOR 1509 West Seventh Street, Suite 401 Department of Finance Post Office Box 3278 and Administration Little Rock, Arkansas 72203-3278 Phone: (501) 682-2242 Fax: (501)