SALT Report 1794 – The Missouri Department of Revenue issued a Letter Ruling regarding a Taxpayer’s separately stated charges for newspaper delivery. The Taxpayer publishes a daily newspaper in Missouri and he offers a variety of prepaid subscriptions that range from one month to one year. When someone signs up for a newspaper subscription they are given the option of picking up each copy of the newspaper or having the newspaper delivered by carrier or mail. On the Taxpayer’s billing statements he lists a charge for the subscription price of the newspaper and a separately stated charge for delivering the newspaper.
Missouri Code of Regulations 12 CSR 10-110.400(3)(E) explains the application of sales tax to the sale and delivery of newspapers, “If the purchaser is required to pay for delivery, handling, postage costs or similar service charges as part of the sale price of the publication, the entire sale price is subject to tax. If the purchaser is not required to pay the service charge as part of the sale price of the publication, the amount paid for the service is not subject to tax if the charge for such service is separately stated. If the charge for the service is not separately stated, the entire sale price is subject to tax.”
The Department determined that the Taxpayer’s delivery charges are not subject to tax for the following reasons:
- Subscribers are not required to pay for delivery charges as part of the sale price
- Subscribers have the option to pick up the newspaper at a distribution center, and
- The Taxpayer’s billing statements reflect a charge for the subscription price of the newspaper as well as a separately stated charge for the delivery
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