SALT Report 3018 – Maine Revenue Services updated its guidance for those who sell publications in Maine because the sales tax exemption for certain publications will be repealed effective October 1, 2013. On that date, sales of publications regularly issued at intervals not exceeding 3 months will be subject to the 5.5% state sales tax rate.
Publications affected by this change, include magazines, newspapers and inserts, comic books, puzzle books, tabloids, advertising magazines, newsletters, bulletins and advertising material packaged for mail distribution, regardless of where the publication is produced, or whether it is sold over-the-counter or for home delivery. In addition, sales of publications to hotels that will provide the publications on a complimentary basis to hotel guests will also be taxable. This is because hotels will not be able to claim the resale exemption since they are giving these publications away.
Sales of digital copies of a publication are taxable so long as the publication is downloaded to the subscriber’s electronic device. However, if the subscriber is only allowed to access and view an online version of the publication and cannot download the publication, the subscription is exempt.
If a subscription offers both print and online access without downloads, the subscription is considered a bundled sale. Therefore, when a bundled transaction contains both taxable and exempt components, the entire amount is subject to sales tax. However, if the taxable and exempt components are separately stated, either on the invoice to the customer or in the books and records of the business, sales tax will only apply to the taxable amount.
This notice also addresses the application of sales tax to consignment sales, subscriptions, cancellations, vending sales, sales price, exempt sales, sales for resale, and reporting and remitting the tax.
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