SECTION 3.299. Newspapers, Magazines, Publishers, Exempt Writings

(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.

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