Was a newspaper publisher's combined print-and-digital subscription charge taxable even though digital-only access was not?

Plain-English summary

The publisher had to collect Florida sales tax on the entire price of its combined print-and-digital newspaper subscription.

Florida treated printed newspapers delivered by carrier as taxable tangible personal property. It treated a stand-alone digital-access subscription as a nontaxable service because no tangible item was transferred. But the combined subscription included both printed newspapers and digital access in the same sale, so separately describing a digital component did not remove that amount from the taxable sales price.

The submitted invoices were lump-sum invoices and did not satisfy the rule for excluding transportation charges. Under that rule, a delivery charge must be separately stated and avoidable solely by the buyer. The ruling therefore included the delivery charge in the taxable combined price on the invoices reviewed.

Common questions

Was digital-only newspaper access taxable? No. The ruling treated a transaction consisting only of digital transmissions as a nontaxable service.

Was the combined print-and-digital subscription taxable? Yes. Because the same sale included printed newspapers, the entire sales price was taxable.

Did separately identifying a digital fee make it exempt? No. The Department found that the fee paid for the combined subscription, not solely for a separate digital-only service.

Were delivery charges excluded? Not on the sample invoices. They did not separately state the relevant charge and meet the rule's avoidability requirement.

Could subscribers later opt out and change the original tax result? No. The ruling says tax was due on the total sales price at the time of sale; a later opt-out was irrelevant.

Citations and references

• Fla. Stat. §§ 212.02(15), (16), (19), 212.05, 212.08(7)(v), and 212.08(7)(w).
• Fla. Admin. Code rr. 12A-1.008(1)(b)1., 12A-1.039(1)(a), and 12A-1.045(4)(a).
• Department of Revenue v. Quotron Systems, Inc., 615 So. 2d 774 (Fla. 3d DCA 1993).

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 22A-022

Original ruling text

QUESTION: Whether the
for Taxpayer’s
subscription
service is subject to Florida sales or use tax?
ANSWER: Yes, Taxpayer’s
for
subscription service is
subject to Florida sales or use tax because the fee is for the sale of both tangible personal
property and digital content or services.
October 26, 2022

Re:

Technical Assistance Advisement – TAA #: 22A-022
(“Taxpayer”)
Sales and Use Tax – Newspapers, On-line Subscriptions
Sections 212.02, 212.05 and 212.08, Florida Statutes - (“F.S.”)
Rules 12A-1.008 and 12A-1.039, Florida Administrative Code - (“F.A.C.”)
BP #:
(“Taxpayer”)
FEIN:

Dear

,

This is in response to your letter dated
, requesting this Department’s issuance of
a Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S., and Rule Chapter
12-11 F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request 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 s. 213.22, F.S.
REQUESTED ADVISEMENT
Taxpayer requests that the Department confirm that the
sales or use tax for the following reasons:
•

is not subject to Florida

The fee is charged solely to obtain access to digital news content;

Technical Assistance Advisement
October 26, 2022
Page 2

•
•
•

At the time of the initial subscription or subsequent renewal, the subscriber is informed
of the
which is paid to access the digital news content;
At the time of the initial subscription or subsequent renewal, the subscriber is informed
that the
can be avoided by an election of the subscriber (i.e., by declining
the digital content access); and
The
is separately stated on the subscriber’s invoice.

Taxpayer provides copies of the following:
•
•
•

Invoice
Invoice
Invoice
FACTS

The request dated

, provides:

Taxpayer is the leading source for news and information in the
United States.
Taxpayer has a broad portfolio that consists of newspapers, magazines, websites, and consumer
events. Taxpayer publishes several newspapers throughout Florida, including the
the
region in Florida.
Taxpayer currently offers a variety of subscription models in order to cater to its subscribers’
specific desires and to help ensure subscriber retention. These include digital access only
subscriptions,
subscription services which include access to the features
described below, and a print only subscription (“Print Subscription”) at a non-bundled
comparable rate for subscribers who desire to opt-out of the
subscription service offering. The
subscription service includes the
following distinct and separate features:
•
•
•
•
•

Printed newspaper publications;
An enhanced digital replica of each printed newspaper accessed on the
website;
Mobile news apps with articles from the
website;
iOS and Android e-Newspaper apps that provide access to digital replicas of the
newspaper publications; and
news emails containing top headlines of the week.

To access the digital services, subscribers must activate a digital account provided by Taxpayer.
For new subscribers of
subscription services, the subscriber is charged
an
on the invoice that grants access to the digital content. As noted above, this is
an optional fee for digital content and the subscriber may opt-out to receive print-only content.

Technical Assistance Advisement
October 26, 2022
Page 3

At the time of the initial subscription, the customer is provided an invoice that separately states
the carrier delivery charge and the
.
The
•
•
•
•
•
•
•
•
•
•
•

is comprised of the following cost components borne by Taxpayer:
Digital news production costs;
Video production, editing and software costs;
Digital editors and user-engagement staff;
Incremental content fees (wire services,
, Stock listings, puzzles, op-ed
columnists) for online distribution and exclusive digital-only comics;
Reporting and production time devoted to updating digital replica edition pages;
Exclusive entertainment pages published in the digital replica edition;
Web hosting costs;
Website and application development costs;
Digital replica edition software costs;
Online subscription processing software; and
Online audience measurement and tracking software.

Delivery charges and sales tax are included in the subscription fees. Taxpayer currently collects
and remits sales tax on its subscription sales and deducts the delivery charge before calculating
the total tax due.
We note that none of the three (3) sample invoices submitted with this request separately state
the various cost components. In other words, all three (3) sample invoices are “lump sum.” The
“
” and “
” sample invoices do notify the consumer of the option of picking up
their newspapers in order to avoid transportation costs.
TAXPAYER POSITION
Florida sales and use tax is applied to the “sales price” of the retail sale of tangible personal
property and certain enumerated taxable services. The word “sale” is defined to include printing
of material, which includes newspapers in printed form. Florida has specifically recognized that
certain services are afforded an exemption from sales and use tax, including the provision of
professional services. For the reasons discussed below, Taxpayer asserts that the
is exempt from sales and use tax as a digital access service, which is characterized as a tax-exempt
professional service for Florida sales and use tax purposes.
a.

The separately stated
is a charge for a digital news content and is
not taxable as tangible personal property.

As addressed above, the
is an optional fee that Taxpayer’s subscribers pay
exclusively to access digital news content. The Fee does not grant any rights to access or use any

Technical Assistance Advisement
October 26, 2022
Page 4

tangible personal property. The fee is separately stated on the subscriber’s invoice. Currently,
Florida law does not consider the sale of a digital news subscription to be the retail sale of taxable
tangible personal property. Instead, the sale of a digital news subscription is categorized as the
provision of exempt professional services. This issue was addressed in Department of Revenue v.
Quotron Systems Inc., as explained below.
In Quotron, the Department determined that a digital news subscription was tangible personal
property because the information could be “seen” via a customer’s display screen and a customer
could print the information, if desired. The taxpayer in Quotron provided “high-speed electronic
delivery of various financial news and information to its subscribers via display on video screens.”
The court held that although a customer could print the information through the digital news
subscription, this was not considered an integral fact to taxability. The court ultimately
determined that digital news subscription was not tangible personal property because:
[Taxpayer’s] images on a screen are not capable of being touched or possessed; they are transient
and have no enduring existence. The electronic images which appear on the video display screens
of a subscriber’s desk unit do not constitute “tangible personal property” as defined by Chapter
212, Florida Statutes, nor does the transmission of such images constitute a “sale.”
Similar to the taxpayer in Quotron, Taxpayer provides access to digital news content for
subscribers through the payment of a separate
. A subscriber accesses the digital
content via the Internet through a computer or electronic device. Taxpayer’s sale of digital news
content is not subject to tax per the reasoning in Quotron, as the
is separately
stated from the Print Subscription and does not involve the sale of tangible personal property.
Taxpayer understands that certain criteria must be met in order for the
to be
considered exempt from Florida’s sales tax. The Department issued a Declaratory Statement
regarding the taxability of delivery charges by a newspaper that provides guidance in this
instance. See In Re: The Petition of the Miami Herald Publishing Company, 02-2-DS, Florida
Declaratory Statement (Issued 12/23/2002). The Declaratory Statement provides that as to the
sale of newspapers with optional delivery charges, the newspaper publisher is not required to
collect sales tax on the charge for newspaper delivery by independent carriers if the following
criteria are satisfied:
•
•
•

At the time of the initial subscription or subsequent renewal, the subscriber is informed
of the carrier delivery charge and mail delivery charge;
At the time of the initial subscription or subsequent renewal, the subscriber is informed
that the delivery charge can be avoided by an election to either pick-up the newspaper at
a distribution center or to receive the newspapers by mail; and
The carrier delivery charge is separately stated on the invoice.

Based on the Declaratory Statement, Taxpayer’s subscriber must be informed prior to making
the order or renewal of a separate charge for Taxpayer’s digital news content, apart from a

Technical Assistance Advisement
October 26, 2022
Page 5

predetermined price for the print copy. The subscriber must also have the option to avoid the
purchase of the digital news content. Also, the charge for the
must be separately
stated.
In the present case, all of these criteria are met. Consequently, the
requirements established by the Department.

satisfies the

The Declaratory Statement is consistent with the opinion in Department of Revenue v. B&L
Concepts, Inc., 612 So.2d 720 (Fla. 5th DCA 1993) that addressed service charges by a lessor
leasing furniture and home entertainment products. The court determined that the service
charge for order processing was a service that was part of the sale and part of the “sales price”.
This was because the service processing fee was required, and therefore not optional. The court
determined that delivery fees and late fees, unlike processing fees, were optional (and thus
incidental) to the rentals and were avoidable by the lessee. Similarly, in U.S. Gypsum Co. v. Green,
110 So.2d 409 (Fla. 1959), the court determined that freight charges that were incurred after the
moment of purchase were not part of the taxable “sales price”. In the same manner, in Green v.
Surf Club, Inc., 136 So.2d 354 (Fla. 3rd DCA 1961), service charges that were automatically added
to the restaurant bill as a gratuity were considered by the court to be part of the taxable amount,
as the charge could not be avoided by the purchaser.
Due to the foregoing, where Taxpayer’s
is solely to obtain digital news content
access and the Fee provides no rights to access or use any tangible personal property, the
separately stated fee is not subject to Florida sales and use tax. This is consistent with the
Department’s guidance and the applicable Florida statutes and case law outlined in this letter.
b.

The separately stated
is a charge for a digital news content and is
exempt from sales and use tax as a professional service.

The court in Quotron also addressed whether a digital news subscription was the provision of
exempt professional services per Fla. Stat. § 212.08.11 The court concluded that since the digital
news subscription was not considered the sale of tangible personal property or the sale of taxable
information services, the digital news subscription would be considered the provision of exempt
professional services. The Department has consistently held this position with respect to digital
subscriptions.
LAW AND DISCUSSION
Generally, Florida law imposes a state sales and use tax, at the rate of six percent (6%),1 on the
privilege of engaging in the retail sale of any tangible personal property in this state. See s.
1

Discretionary county sales surtax, if any, is also owed if the six percent (6%) Florida state sales tax applies. See s.
212.054, F.S. The surtax applies only to the first $5,000 of the sales amount on any item of tangible personal
property. See s. 212.054(2)(b), F.S.

Technical Assistance Advisement
October 26, 2022
Page 6

212.05(1)(a)1.a., F.S. Tangible personal property is defined as “property which may be seen,
weighed, measured, or touched or is in any manner perceptible to the senses ….” See 212.02(19),
F.S. Rule 12A-1.039(1)(a), F.A.C., further provides “[i]t is the specific legislative intent that each
and every sale … is taxable, unless such sale … is specifically exempt. The exempt nature of the
transaction must be established by the selling dealer.”
The term “sale” is defined in s. 212.02(15)(a), F.S., to mean “[a]ny transfer of title or possession,
or both ... of tangible personal property for a consideration.” This includes the sale of printed
material and newspaper subscriptions with delivery by a carrier or means other than by mail.
See ss. 212.02(15)(c), and 212.08(7)(w), F.S., and Rule 12A-1.008(1)(b)1., F.A.C. (Emphasis added).
In most cases, the taxability of a service is dependent on whether the service is considered to be
part of the “sales price” of a taxable item. Section 212.02(16), F.S., defines "sales price” as “the
total amount paid for tangible personal property, including any services that are a part of the sale
. . ..” When tangible personal property and services are sold as part of the same sale, the entire
sales price is subject to tax. Section 212.08(7)(v), F.S., provides an exemption for professional,
insurance, or personal services transactions that involve inconsequential elements of tangible
personal property for which no separate charge is made. Conversely, Florida sales tax applies to
services that are part of the sale of tangible personal property. (Emphasis added).
Based upon the facts provided, Taxpayer offers print only subscriptions, which are delivered by
carrier, digital access only subscriptions and the
subscriptions.
The sale of the print only subscriptions is subject to sales tax as the sale of tangible personal
property, pursuant to s. 212.02(15)(a), F.S.
Regarding the digital access only subscriptions, Florida courts have held that electronic images of
financial information displayed on a screen are not “tangible personal property,” as defined in s.
212.02(19), F.S. See Department of Revenue v. Quotron Systems, Inc., 615 So.2d 774 (Fla. 3rd DCA
1993); Henley Holdings Inc. v. Department of Revenue, No. 89-4381 (Fla. 2d Cir.Ct. July 22, 1991),
affd. 599 So.2d 1282 (Fla. 1st DCA 1992). The Department has cited Quotron, supra, and Henley
Holdings, supra, in regard to transactions involving only digital transmissions via the Internet to
a customer’s computer. The Department has determined that such sales, without any other
evidence of the transfer of something tangible, are not sales of tangible personal property for
purposes of ss. 212.02(19), and 212.05, F.S. Sales of digital transmissions instead constitute
services not subject to tax pursuant to Chapter 212, F.S.
The sale of the digital access only subscriptions is not subject to sales tax, as there is no transfer
of a tangible item as part of the transaction.
Regarding the
subscriptions, Taxpayer provides that it includes digital
news content and printed newspaper publications, which are delivered by carrier. For this
subscription, Taxpayer charges an
.

Technical Assistance Advisement
October 26, 2022
Page 7

Taxpayer asserts that, similar to the Taxpayer in Quotron, Taxpayer provides access to digital
news content for subscribers through the payment of a separate
. Taxpayer further
asserts the
is solely to obtain digital news content access and the fee provides no
rights to access or use any tangible personal property. Taxpayer’s assertions are contrary to its
own facts and the law.
The
is the sales price charged to subscribers for the
subscription service, which provides access to digital services and delivery of printed newspaper
publications. Thus, the
is not solely to obtain access to digital services. Further, the
fee comprises tangible personal property and a digital access service sold as part of the same
sale. Quotron is inapplicable here and separately stating the
does not alter this
result. Therefore, the entire sales price is subject to tax. Tax is due on the total sales price charged
to the subscriber at the time of sale. It is irrelevant that subscribers may subsequently opt out of
the
subscription service.
As a result, the invoices submitted for review, which state that the
digital services are nontaxable in the state of Florida, are inaccurate.

for access to

Further, Rule 12A-1.045(4)(a), F.A.C, provides:
(4)(a) The charge for transportation services is not subject to tax when both of the
following conditions have been met:

1. The charge is separately stated on an invoice or bill of sale; and,
2. The charge can be avoided by a decision or action solely on the part of the purchaser.
   …
   Because none of the three (3) sample invoices submitted with the request satisfy the Rule, the
   delivery/transportation charge is subject to Florida Sales Tax (as part of the entire
   ).
   Taxpayer also asserts that the digital news subscription service is an exempt professional service.
   Taxpayer’s assertion is contrary to its own facts and the law. The
   subscription service is not a pure service transaction because the sale of tangible personal
   property is involved. Florida sales tax applies to services that are part of the sale of tangible
   personal property, according to s. 212.02(16), F.S. (Emphasis added).
   Taxpayer relies upon the Declaratory Statement issued in In Re: The Petition of the Miami Herald
   Publishing Company to support its position that the
   is not taxable if certain criteria
   are met. Taxpayer’s reliance is misplaced. The declaratory statement expressly addresses
   optional delivery charges and collecting sales tax on the charge for newspaper delivery by
   independent carriers, not access to digital content or services.

Technical Assistance Advisement
October 26, 2022
Page 8

CONCLUSION
The
is the sales price charged for the sale of the
subscriptions, which provides printed newspaper publications delivered by carrier and access to
digital content or services. The entire sales price is subject to sales tax. Tax is due on the total
sales price charged to the subscriber at the time of sale.
This response constitutes a TAA under s. 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 s.
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 TAA, 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 ten (10) days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850)717-7347.
Sincerely,

Felicia S.W. Thomas
Felicia S.W. Thomas, Esq.
Senior Attorney
Technical Assistance & Dispute Resolution
(850)717-7347
CC:

Record ID: 7000748782

Technical Assistance Advisement
October 26, 2022
Page 9

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