Thursday, July 07, 2011

Printing and Publications

Riveting Reading MaterialI had a rant all set about the "Amazon tax", but I decided you needed some actual content, as opposed to me editorializing, so here you go.  I might do it in a day or so, after the steam stops coming out of my ears.

There are several issues to consider when it comes to printing and publications.

First of all, printed products are usually taxable.  They're tangible personal property and therefore, by default, taxable.  But there are plenty of exemptions, which we'll talk about.

Take newspapers for instance.  You know, those things that get ink all over your hands.  We used to read them when we were riding in the stagecoach.  Now we have iPads.

Anyway, in some states, there's a sales tax on newspapers. Consumers usually don't see this because the tax is absorbed into the price when sold from a machine or street vendors. In other states, there is simply no tax on newspapers. And I'll bet that, in those states, there are editors who are complaining about all of the big corporate exemptions.  But are they complaining about the exemption they get for newspapers? Didn't think so.

Dang. And I wasn't going to editorialize.

Magazines are different. They are often taxable when sold over the counter, but there are some states where they are exempt. And if they are taxable when sold over the counter, they're usually not taxable when sold by subscription.  The subscription one is tricky.  There are states that DO tax subscriptions.  And they have a field day with doctors' offices. 

Newsletters and other periodicals, when sold by non-profits, are often not taxable, with some restrictions.

Then, there is the definition of what precisely IS a newspaper, magazine or newsletter. For example, newspapers often specifically have to be printed on newsprint and come out at least weekly. And magazines often must be published at least quarterly, have advertising, and soft covers.  And then there's the question of taxability if the publication is delivered digitally. 

Finally, there's the printing of advertising, catalogs, brochures, and similar custom printed documents.

There are a couple of states that make this easy.  In those states, custom printing is considered a service and is not taxable.  Done!

However, most states will say that custom printing is taxable.

One general exception for custom printing is product that is shipped out of the state.   While there are usually specific laws that state this, it's rooted in this golden rule.

There are a couple of states that say that custom printing, if shipped via common carrier (like the Postal Service) to the individual customers and prospects, even within the state, is not taxable. This presents a bookkeeping challenge. If you have 100,000 brochures printed, how many will be mailed to your customers, and how many will be kept for handing out at tradeshows, etc?  And the method of delivery is important.  In one state, the law requires that the delivery must be by US Mail.  Not Fed Ex.  The US Mail.  Gotta be careful to read the entire rule.

To summarize the big points:

Stock printing: generally taxable
Newspapers: often taxable
Magazines: usually taxable
Publications by non-profits: often not taxable
Subscriptions: often not taxable
Custom printing: usually taxable
Printing shipped out of state: generally not taxable
Custom printing shipped within state to individual customers: sometimes not taxable

Remember, every state will be completely different.

The Sales Tax Guy

See the disclaimer - this is for education only.  Research these issues thoroughly before making decisions.  Remember: there are details we haven't discussed, and every state is different.  Here's more information

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1 comment:

ralleydesew said...
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