Did a free biweekly real-estate advertising publication qualify for Florida's shopper exemption?

Subject

Shoppers

Plain-English summary

The free biweekly real-estate publication qualified as an exempt “shopper.” It was published regularly, distributed without charge through newsstands, and consisted primarily of advertising by realtors, brokers, contractors, lenders, movers, appraisers, property managers, and other businesses.

The Department reviewed one sample issue. It cautioned that every later issue had to continue satisfying section 212.08(7)(w), including the publication and advertising requirements, to remain exempt.

What this means for you

Free distribution alone was not enough. The publication also had to be regular, primarily advertising, and distributed through an approved channel such as newsstands, mail, or home delivery.

Common questions

Q: Was the publication sold to readers? No.

Q: How often was it published? Every two weeks.

Q: Did one qualifying issue guarantee future exemption? No; each issue had to keep meeting the requirements.

Citations and references

• Fla. Stat. § 212.05 — sales and use tax
• Fla. Stat. § 212.06(16)(a) — publisher use of free copies
• Fla. Stat. § 212.08(7)(w) — shopper and community-publication exemption
• Fla. Admin. Code r. 12A-1.008(10)(a), (c) — shopper definition and advertising threshold
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00A-047

Original ruling text

SUMMARY

QUESTION: Is a real estate publication that is made
available free of charge, published on a regular basis, and
primarily composed of advertising exempt as a "shopper?"

ANSWER - Based on Facts Below: The subject publication is
published on a regular basis. It is composed primarily of
advertising. It is also made available at no charge.
Because the real estate publication meets all the
requirements for exemption under section 212.08(7)(w),
F.S., and Rule 12A-1.008(10)(a) and (c), it is exempt as a
"shopper."

Aug 08, 2000

Re: Technical Assistance Advisement 00A-047
Sales & Use Tax - Shoppers
Sections: 212.05; 212.06(16)(a); 212.08(7)(w), F.S.
Rules: 12A-1.008(10)(a) and (c), F.A.C

Dear :

This is in response to your request, dated June 23, 2000,
received June 30, 2000, for the Department's issuance of a
Technical Assistance Advisement ("TAA") concerning the above
referenced party and matter. Your letter has been carefully
examined and the Department finds it to be in compliance with
the requisite criteria set forth in Chapter 12-11, F.A.C. This
response to your request constitutes a TAA and is issued to you
under the authority of section 213.22, F.S.

Facts

Taxpayer is successor in interest to XXX (hereinafter "the
Publisher"). For years, the Publisher printed and published XXX
(hereinafter "the Publication"). As a result of subsequent
mergers involving the Publisher and other corporations, the

Publication is now printed and published by a division of
Taxpayer, a foreign corporation authorized to do business in
Florida.

The Publication consists primarily of advertising. Included are
advertisements by realtors, real estate brokers and others
offering various properties for sale or lease, advertisements by
contractors offering construction and development services,
advertisements by mortgage lending and other financial
institutions, moving and appraisal services, property management
companies, and other businesses. Taxpayer provides most of the
graphic design (previously provided by the Publisher) for the
ads, determines the layout of the Publication, and is paid by
businesses advertising in the Publication.

The Publication is published on a regular biweekly basis. It is
not available to the readership on a paid basis, but is
distributed free of charge through newsstands located in grocery
stores, gas stations, and various other public venues in the
area. A representative copy of the Publication has been
submitted to the Department.

Requested Advisement

Whether the Publication is exempt under the provisions of
section 212.08(7)(w), F.S.

Applicable Law

Section 212.05, F.S., provides in pertinent part:

It is hereby declared to be the legislative intent that
every person is exercising a taxable privilege who engages
in the business of selling tangible personal property at
retail in this state, including the business of making mail
order sales, or who rents or furnishes any of the things or
services taxable under this chapter, or who stores for use
or consumption in this state any item or article of
tangible personal property as defined herein and who leases
or rents such property within the state.

(1) For the exercise of such privilege, a tax is levied on
each taxable transaction or incident, which tax is due and
payable as follows:

(a)1.a. At the rate of 6 percent of the sales price of each
item or article of tangible personal property when sold at
retail in this state, computed on each taxable sale for the
purpose of remitting the amount of tax due the state, and
including each and every retail sale.

Section 212.08(7)(w), F.S., provides:

(w) Certain newspaper, magazine, and newsletter
subscriptions, shoppers, and community newspapers.-Likewise exempt are newspaper, magazine, and newsletter
subscriptions in which the product is delivered to the
customer by mail. Also exempt are free, circulated
publications that are published on a regular basis, the
content of which is primarily advertising, and that are
distributed through the mail, home delivery, or newsstands.
The exemption for newspaper, magazine, and newsletter
subscriptions which is provided in this paragraph applies
only to subscriptions entered into after March 1, 1997.
(Emphasis Supplied)

Section 212.06(16)(a) and (b), F.S., provides:

(16)(a) Notwithstanding other provisions of this chapter,
the use by the publisher of a newspaper, magazine, or
periodical of copies for his or her own consumption or to
be given away is taxable at the usual retail price thereof,
if any, or at the "cost price."

(b) For the purposes of this subsection, the term "cost
price" means the actual cost of printing of newspapers,
magazines, and other publications, without any deductions
therefrom on account of the cost of materials used, labor
or services cost, transportation charges, or other direct
or indirect overhead costs that are a part of printing
costs of the property. However, the cost of labor to
manufacture, produce, compound, process, or fabricate

expendable items of tangible personal property which are
directly used by such person in printing other tangible
personal property for sale or for his or her own use is
exempt. Authors' royalties, fees, or salaries, general
overhead, and other costs not directly related to printing
shall be deemed to be labor associated with manufacturing,
producing, compounding, processing, or fabricating
expendable items.

Rule 12A-1.008(10)(a) and (c), F.A.C., provides:

(a) The term "shopper" means a community publication made
available to its coverage area by way of distribution
through the mail, home delivery, or newsstands free of
charge, which is published on a regular basis (usually
daily or weekly) and which consists primarily of
advertising of a broad range of products and services
offered by several unrelated types of businesses or
individuals, and which has a conformity as to title and
general nature of content from issue to issue, and may
contain in each issue at least some news of general or
community interest, community notices, and could also
contain editorial comment or articles by different authors.

(c) In order to satisfy the "primarily advertising"
requirement of a "shopper" or "community newspaper," more
than 50 percent of the publication's copy must be devoted
to advertising in more than one-half of the published
editions during any 12-month period. However, in order to
be considered a newspaper, a community newspaper must carry
a minimum of 25 percent news consisting of current events
and matters of general interest which appeal to a wide
spectrum of the general public.

Discussion

Section 212.05, F.S., provides that tax is imposed on the sales
price of each item or article of tangible personal property sold
at retail in this state. Section 212.06(16)(a), F.S., further
provides that the use by a publisher of a newspaper, magazine,
or periodical or copies of the same for its own consumption or

to be given away is taxable. Use tax is due on the "cost price"
of the publication. See s. 212.06(16)(a), F.S.

Section 212.08(7)(w), F.S., and Rule 12A-1.008(10)(a) and (c),
F.A.C., provide exemptions for certain publications from the tax
imposed by the two sections mentioned above.

The subject Publication is distributed on a regular basis (biweekly) free of charge through newsstands located in grocery
stores, gas stations, and various other public venues in the
area. It consists primarily of advertising of a variety of real
estate, financial, property management, appraisal, and
construction services.

Based on the information provided in your letter and on review
of the included sample copy, the Publication satisfies the
exemption requirements of s. 212.08(7)(w), F.S. The Publication
also satisfies the exemption requirements of Rule 12A1.008(10)(a) and (c), F.A.C., as it is currently written.

It should be noted that this conclusion is based on the
examination of only one issue of the Publication. Each issue of
the Publication must continue to meet the requirements set forth
in section 212.08(7)(w), F.S., to continue qualifying for the
exemption.

This response constitutes a Technical Assistance Advisement
under section 213.22, F.S., which is binding on the Department
only under the facts and circumstances described in the request
for this advice, as specified in section 213.22, F.S. Our
response is predicated upon those facts and the specific
situation summarized above. You are advised that subsequent
statutory or administrative rule changes or judicial
interpretations of the statutes or rules upon which this advice
is based may subject similar future transactions to a different
treatment from that which is expressed in this response.

You are further advised that this response, your request, and
related backup documents are public records under Chapter 119,
F.S., and are subject to disclosure to the public under the
conditions of section 213.22, F.S. Confidential information

must be deleted before public disclosure. In an effort to
protect confidentiality, we request that you provide the
undersigned with an edited copy of your request for Technical
Assistance Advisement, the backup material and this response,
deleting names, addresses, and any other details that might lead
to identification of the taxpayer. Your response should be
received by the Department within 15 days of the date of this
letter.

Sincerely,

Case Bodiford
Attorney
Control # 41811