Were third-party printing costs for free, regularly mailed local business directories exempt from Florida sales tax?

Plain-English summary

The publishers produced magazine-quality local business directories, generally 175 to 275 pages, and hired another company to print them. Residents received the directories free through the U.S. mail.

Florida found that the directories met all five elements of the exemption: they were free, circulated publications, published on a regular annual or semiannual schedule, composed primarily of advertising, and distributed by mail, home delivery, or a qualifying comparable method.

The fabrication and printing costs were therefore exempt from sales and use tax. The cited rule also allowed distributors of exempt periodicals to provide vendors an exemption certificate for printing costs and component items such as paper and ink.

What this means for you

The exemption depends on the publication's complete distribution and content model. A free advertising piece must still qualify as an identifiable publication and be issued on a regular schedule through an approved channel.

Common questions

Did free distribution matter? Yes.

How often were the directories issued? Annually or semiannually at consistent times from year to year.

What was their primary content? Advertising for local businesses.

Citations and references

• Fla. Stat. § 212.08(7)(w) and Fla. Admin. Code r. 12A-1.008(3), as discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-021

Original ruling text

SUMMARY
QUESTION: Taxpayer publishes various directories containing information on local companies. The
issue in this case is: Are charges for the fabrication costs of Taxpayer's directories exempt from sales tax,
pursuant to the exemption in section 212.08(7)(w), F.S., and Rule 12A-1.008(3), F.A.C., for 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 newstands?
ANSWER: The directories meet the five discrete requirements under the statute and rule. They are: 1)
free; 2) a circulated publication; 3) published on a regular basis from year to year; 4) composed of
primarily advertising; and 5) distributed through the mail, home delivery, or newsstands. Therefore, the
directories are exempt from sales and use tax.

April 16, 2009
XXX
Re:

Technical Assistance Advisement 09A-021
Publication Exemption
Sales and Use Tax
Sections 212.05, 212.08(7)(w), Florida Statutes (F.S.)
Rule 12A-1.008, Florida Administrative Code (F.A.C.)
XXX d/b/a: XXX
FEI #: XXX
XXX d/b/a: XXX
FEI #: XXX
XXX d/b/a: XXX
FEI #: XXX
XXX d/b/a: XXX
FEI #: XXX
(collectively “Taxpayer”)

Dear XXX:
This is in response to the letter dated February 19, 2008, and other correspondence
provided, requesting this Department’s issuance of a Technical Assistance Advisement
(TAA) pursuant to section 213.22, F.S., and Rule Chapter 12-11, F.A.C., regarding the
above referenced matter and party. An examination of your letter has established that
you have complied with the statutory and regulatory requirements for issuance of a TAA.
Therefore, the Department is hereby granting your request for a TAA.
FACTS
Your letter dated February 19, 2008, provides in part:

Technical Assistance Advisement
Page 2 of 7

. . . We are a publishing company that produces magazine-quality business
directory of approximately 175 to 275 pages, for local residents. These
directories are mailed to homes via the US Postal Service free of charge. The
majority of the content is business advertising. They are published 2 times per
year for different geographical franchise areas. We employ another company to
print the publication.

You also provided a copy of the publication.
Your fax dated February 17, 2009, provides clarification regarding the printing schedule
of each directory:
XXX
XXX Publication for XXX years
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXXst.
A draft is sent to the printer again in XXX and the publication is printed and
distributed on or about XXXst.

XXX
XXXPublication for XXX years
A draft is sent to the printer in October and the publication is printed and
distributed on or about Nov. 30th.

XXX
XXX Publication for XXX year
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXX 31st.

XXX
XXX Publication for XXX years
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXX 31st.

XXX
XXX Publication for XXX years
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXX 31st.

Technical Assistance Advisement
Page 3 of 7

XXX
XXX Annual for XXX years
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXX 31st.
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXXst.

XXX
XXX Publication for XXX years
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXXst.

XXX
XXX Annual Directory for XXX
A draft is sent to the printer in XXX and the publication is printed and distributed
on or about XXXst.
A draft is again sent to the printer in XXX and the publication is printed and
distributed on or about XXXst.

You further clarified that the XXX directory may, instead, state “XXX” when distributed
to zip codes and neighborhoods surrounding XXX. Both covers are the same directory.
Similarly, you clarified that the XXX may, instead, state “XXX” on the cover and the
XXX directory may, instead, state “XXX” or “XXX.”
ISSUE
Whether charges for fabricating the directories are exempt from sales tax, pursuant to the
exemption in Section 212.08(7)(w), F.S., for 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.
TAXPAYER POSITION
Your letter provides that you believe that the directories are exempt publications because
the directories meets the requirements of Section 212.08(7)(w), F.S. You provide that the
directories are published regularly, the directories are distributed free of charge, and the
content of the directories is primarily advertising.
You cite Rule 12A-1.008(3), F.A.C., for support of your position.
APPLICABLE STATUTES AND RULES

Technical Assistance Advisement
Page 4 of 7

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.)
Rule 12A-1.008, F.A.C., relating to periodicals exempt from tax, provides, in part:
(3)(a) Periodicals that meet the following requirements are exempt from tax:

1. The periodical is published on a regular basis;
2. The periodical is distributed free of charge to the recipient by mail, home
   delivery, rack machines, newsstands, or similar method; and
3. The content of the periodical is primarily advertising.
   (b) The sale of subscriptions to periodicals that are delivered to the subscriber by
   mail are exempt.

Technical Assistance Advisement
Page 5 of 7

(c) Distributors of tax exempt periodicals may issue an exemption certificate to
their vendors in lieu of paying tax on the publishing or printing costs of, or for
the purchase of items, such as paper and ink, that are incorporated into and
become a component part of, the publication.
DISCUSSION
First, tax exemptions are to be narrowly construed, and doubtful language should be
construed against the taxpayer. Sebring Airport Auth. v. McIntyre, 642 So.2d 1072, 1073
(Fla. 1994); United States Gypsum Co. v. Green, 110 So.2d 409, 413 (Fla. 1959).
The section’s exemption applies to “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.” See Section 212.08(7)(w), F.S.
Therefore, for the directories to be exempt, they must satisfy all of the five discrete
requirements:
1) “free”;
2) a “circulated publication[]”;
3) “published on a regular basis”;
4) composed of “primarily advertising”; and
5) “distributed through the mail, home delivery, or newsstands.”
We will analyze each requirement:

1. Free
   Your letter provides that the directories are distributed for free. Therefore, the first
   requirement is met.
2. Circulated Publication
   The court in Department of Revenue v. Val-Pak Direct Marketing Systems, Inc., 862
   So.2d 1, 3-4 (Fla. 2 Dist. Ct. App. 2003), discussed the second requirement, dealing with
   the meaning of the word “publication.” The court stated, in part:
   The word publication - - like most, if not all words - - has a range of meanings. In
   some contexts, publication is a noun denoting the action of disseminating
   information. . . . Section 212.08(7)(w), however, does not use publication to
   denote or describe an action. In the context of the statute, which exempts the sale
   of certain tangible items from the sales tax, the word publication can only be
   understood as a concrete noun - - that is, a noun describing a tangible item.
   When used as a concrete noun, publication is commonly understood to mean “a
   published work,” Webster’s Third New International Dictionary 1836 (1993)

Technical Assistance Advisement
Page 6 of 7

(emphases supplied), or “an issue of printed material offered for sale or
distribution,” The American Heritage Dictionary of the English Language 1464
(3d ed. 1992) (emphasis supplied). As these definitions indicate, publication is a
word commonly used to describe newspapers, magazines, and books. . . . A
publication is presented in an identifiable form as a work or an issue. . . .
Id. at 3-4.
This case illustrates that format can control whether an advertisement qualifies for the
exemption under section 212.08(7)(w), F.S. Under Val-Pak Direct Marketing Systems,
Inc., and the common understanding of the word “publication,” the directories are
publications and, therefore, the second requirement is met.

3. Published on a Regular Basis
   The term “regular” is not defined in section 212.08(7)(w), F.S., or in Rule 12A-1.008,
   F.A.C. The term “regularly”, however, is defined in Black’s Law Dictionary 890
   (Abridged 6th ed. 1991) to mean “At fixed and certain intervals, regular in point of time.
   In accordance with some consistent or periodical rule or practice.”
   You provide that each directory is published either annually or semi-annually. The
   annual directories are published at the same date from year to year. Two of the semiannual directories are published January and July 31st from year to year. The other semiannual directory is published December and July 31st from year to year.
   The information provided indicates that the directories are published at fixed and certain
   intervals in accordance with some consistent practice. Therefore, the directories are
   published on a regular basis from year to year and the third requirement is met.
4. Composed of “Primarily Advertising”
   Advertising is defined as “[t]he action of drawing the public’s attention to something to
   promote its sale.” Black’s Law Dictionary 1891 (8th ed. 2004). Here, the directory is
   promoting the sale of local businesses. Approximately eighty percent of the directory
   promotes businesses by subject matter and the other twenty percent alphabetically.
   Therefore, the directory is “primarily advertising” and the fourth requirement is met.
5. Distributed through the Mail, Home Delivery, or Newsstands
   Your letter provides that the directories are mailed to homes. Therefore, the fifth
   requirement is met.
   CONCLUSION
   Based upon the facts provided, charges for fabricating the directories are exempt from
   sales tax, pursuant to the exemption in Section 212.08(7)(w), F.S., for free, circulated

Technical Assistance Advisement
Page 7 of 7

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.
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
on 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 than 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 s. 213.22, F.S. Confidential information must be deleted before public
disclosure. In an effort to protect confidentiality, we request 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 which 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,

H. French Brown, IV
Attorney
Technical Assistance and Dispute Resolution
(850) 922-4708
Ctrl# 42259