SALT Report 2466 – The Missouri Department of Revenue issued a letter ruling regarding a Taxpayer’s purchases of items used to print a publication that it distributes on a monthly basis. Some copies are, for a fee, directly mailed to customers while the other copies are delivered to banks, grocery stores, and restaurants where they are available to the general public free of charge.
The Taxpayer requested guidance as to 1) whether its publication qualifies as a newspaper, 2) whether its purchases of ink and newsprint are exempt, and 3) whether its purchases of newspapers printed and purchased from an independent printer are subject to tax.
In its response, the Department referred to Missouri Code of State Regulations, 12 CSR 10-110.400(2)(C) which defines newspapers as, “publications that are published at stated short intervals, usually daily or weekly, and contain news of current events available for distribution to anyone; that do not, when successive issues are put together, constitute a book; and that are generally in sheet form.” Based on that regulation the Department determined that the Taxpayer is publishing a newspaper.
The next issue is, if the Taxpayer is publishing a newspaper, what items used to produce the newspaper are exempt from sales and use tax. The Department referred to Section 144.030.2(9), RSMo, which provides an exemption for purchase of, “newspaper, ink, computers, photosensitive paper and film, toner, printing plates and other machinery, equipment, replacement parts and supplies used in producing newspapers published for dissemination of news to the general public.”
Based on that statute the Taxpayer’s purchases of newsprint and ink that are used “in producing newspapers published for dissemination of news to the general public” are exempt under Section 144.030.2(9), RSMo. Further, the statute does not require that the newspapers be sold in order for the exemptions to apply.
Finally, the Department determined that the Taxpayer is subject to sales and use tax on its purchases of newspapers that are printed and sold to it by an independent printer. The exemption above, 144.030.2(9), RSMo, only applies to purchases of the items listed in the statute. Therefore, if the Taxpayer purchases newspapers printed by another publisher the purchaser of the items necessary to produce the newspapers would be the printer. Therefore, the printer’s purchases would be exempt, and the Taxpayer would be required to pay sales tax on the sale price of the newspapers if they are purchased from a Missouri printer, and use tax if they are purchased from an out-of-state printer.
For Further Information