| (a) Newspapers.
(1) Newspaper--A publication:
(A) printed on newsprint;
(B) whose average sales price per copy over a 30-day
period does not exceed $3.00. The average sales price per copy shall
be presumed to be the newspaper's masthead price unless the taxpayer
provides contemporaneous documentary evidence satisfactory to the
comptroller that adequately demonstrates the actual average sales
price;
(C) that is printed and distributed periodically at
daily, weekly, or other short intervals of four weeks or less;
(D) for the dissemination of news of a general character
and of a general interest, including advertising.
(2) Newspaper includes a publication containing articles
and essays of general interest by various writers and advertisements
that is produced for the operator of a licensed and certificated carrier
of persons and distributed by the operator to its customers during
their travel on the carrier.
(3) Newspaper also includes publications for the dissemination
of news of a general character and of a general interest that is printed
on newsprint and distributed to the general public free of charge
at daily, weekly, or other short intervals of four weeks or less.
(4) The term newspaper does not include magazines,
handbills, circulars, flyers, sales catalogs, or the like, unless
these items are distributed as a part of a newspaper and the items,
after being printed, are delivered by the printer to the person responsible
for the distribution of the newspaper.
(5) The sale of newspapers whether sold or distributed
by individual copy or subscription is exempt.
(b) Magazines.
(1) Magazine--Those publications usually paper-backed
and sometimes illustrated that appear at regular intervals and contain
stories, articles, essays by various writers, and advertisements.
(2) The sale of subscriptions to magazines entered
as periodicals class (formerly called second class) mail and sold
for a semiannual or longer period of time is exempt from the sales
tax. Except as provided in subsection (d) of this section, other sales
of magazines are taxable.
(3) For the purposes of this section, controlled circulation
magazines means magazines paid for by advertisers rather than by recipients
of the magazines.
(A) The publishers of controlled circulation magazines
must collect sales tax from persons who advertise in their magazines
based upon the sales price of the magazine. The sales price of the
magazine must be separately stated from the charge for advertising
and must be a reasonable amount for such publication. The sales price
will be considered reasonable if the publication meets the requirement
for periodicals class postal rates, as set forth in the postal regulations.
(B) Controlled circulation magazines do not include
those magazines provided to members of an organization as part of
their membership if:
(i) either a part of their membership dues are identified
as the sales price of the magazine plus tax; or
(ii) the membership dues do not identify the sales
price of the magazine, but sales tax was paid by the organization
on the cost of publication.
(c) Publishers.
(1) Newspaper publishers may claim a manufacturing
exemption as set out in §3.300 of this title (relating to Manufacturing;
Custom Manufacturing; Fabricating; Processing). Newspaper publishers
may also claim the exemption for packaging supplies as set out in §3.314
of this title (relating to Wrapping, Packing, Packaging Supplies,
Containers, Labels, Tags, Export Packers, and Stevedoring Materials
and Supplies). Persons printing newspapers may accept an exemption
certificate in lieu of the sales tax from the publisher.
(2) Magazine and other publishers of tangible personal
property for sale will be considered manufacturers under Tax Code,
Chapter 151 and should see §3.300 of this title and §3.314
of this title concerning the status of their purchases.
(3) Magazine publishers of tangible personal property
distributed free of charge are not considered manufacturers under
Tax Code, Chapter 151 or §3.300 of this title. These publishers
must pay tax on their purchases of equipment and materials used to
produce the free magazine.
(d) Exempt writings.
(1) Periodicals and writings are exempt from tax if
published and distributed by a religious, philanthropic, charitable,
historical, scientific, or other similar organization not operated
for profit. Periodicals and writings published and distributed by
an educational organization are subject to the tax.
(2) Material provided in Braille and audio recordings
of writings and periodicals recorded and distributed by a religious,
philanthropic, charitable, historical, scientific, or other similar
organization for use by the visually impaired are exempt from tax.
(3) The phrase "similar organization" used in this
section shall include, but not necessarily be limited to, organizations
qualifying for exemption from federal income taxes under 26 United
States Code §501(c)(3), with the exception of educational organizations.
"Similar organizations" must be organized for a benevolent purpose
and must not be operated for profit.
(4) The term "distributed" used in this section shall
mean the shipment, marketing, or sale of periodicals or writings.
(5) The terms "periodicals" and "writings" used in
this section shall mean printed reading materials including those
presented on audio tape, videotape, and computer disk. Examples include
books, Bibles, United Way newsletters, American Cancer Society magazines,
brochures, newspapers, hymnals or sheet music, and similar items.
Items that contain printed materials susceptible to being read, but
that primarily serve other purposes or functions, are not exempt.
Examples of such nonexempt items include bookmarks, clothing, posters,
art work, photographs, novelties, and souvenirs.
(6) The phrase "educational organization" used in this
section shall mean all public and private schools, colleges and universities,
and other similar institutions that are organized for the systematic
dissemination of knowledge through a formal program of instruction.
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| Source Note: The provisions of this §3.299 adopted to be effective January 1, 1976; amended to be effective March 24, 1978, 3 TexReg 817; amended to be effective December 21, 1983, 8 TexReg 5038; amended to be effective April 3, 1985, 10 TexReg 939; amended to be effective December 19, 1984, 9 TexReg 6142; amended to be effective May 21, 1986, 11 TexReg 2103; amended to be effective November 5, 1986, 11 TexReg 4373; amended to be effective November 5, 1987, 12 TexReg 3924; amended to be effective October 5, 1990, 15 TexReg 5502; amended to be effective February 21, 1992, 17 TexReg 1127; amended to be effective April 18, 2000, 25 TexReg3289; amended to be effective October 12, 2004, 29 TexReg 9551; amended to be effective October 12, 2015, 40 TexReg 7096 |
