Who owed state tax on newspaper advertising inserts while Louisiana's newspaper exemption was suspended through June 30, 2002?

Plain-English summary

During the historical newspaper-exemption suspension, an advertiser owed tax on flyers it bought and gave to a newspaper for insertion, while a commercial newspaper publisher could buy components for resale into newspapers it sold.

The ruling described a 4% state rate and a suspension continuing through June 30, 2002.

Advertiser purchases

An advertiser or agent hired a printer, obtained flyers, and furnished them to the newspaper without charge. The newspaper charged separately for inserting and distributing them.

Because the advertiser bought the printed matter rather than reselling it, the advertiser owed tax on the full sales or cost price of both the flyers and printing services.

Commercial publisher purchases

A publisher selling its newspapers could continue to acquire comic inserts, television schedules, Sunday magazines, and other newspaper components for resale without state sales or use tax.

Publishers with wholesaler accounts could present Form LGST-9 for advance-tax exemption. Other qualifying publishers could claim credit on their returns for advance tax paid to vendors.

Why inserts followed newspapers

The cited regulation treated printed matter distributed with and as part of a newspaper—including inserts—as part of the newspaper. The same printed matter not placed in and distributed with a newspaper did not receive that treatment.

Common questions

Q: Did the advertiser's plan to place the flyer in a newspaper make its printer purchase exempt during the suspension?

A: No.

Q: Could a publisher buy inserts for resale into newspapers it sold?

A: Yes.

Q: What historical suspension end date did the ruling state?

A: June 30, 2002.

Citations and references

• La. R.S. 47:305(D)(1)(e) — newspaper exemption
• LAC 61:I.4401(D)(3) — inserts distributed as part of newspapers
• Act 18 of the 2000 First Extraordinary Session
• Act 33 of the 2000 Regular Session
• Form LGST-9 — historical advance-sales-tax exemption form
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 01-015

Original ruling text

Revenue Ruling
No. 01- 015
October 10, 2001
State Sales Tax or Use Tax is Payable on Advertisers’ Purchases of Advertising
Inserts to be Distributed With Newspapers, for the Duration that “Newspaper”
Exemption is Suspended
The purpose of this ruling is to discuss the Louisiana sales and use taxability of newspaper
advertising inserts, including those purchased by advertisers and those purchased by newspaper
publishers.
The Louisiana sales tax law, Title 47, Section 305(D)(1)(e) of the Louisiana Revised Statutes,
provides an exemption from the tax on the sale at retail, the use, the consumption, the
distribution, and the storage to be used or consumed in Louisiana of newspapers. Since July 1,
1986, this exemption has been fully or partially suspended, without interruption, by several
resolutions or Acts of the Louisiana Legislature. The most recent acts of the Legislature (Act 18
of the First Extraordinary Legislative Session of 2000 and Act 33 of the 2000 Regular
Legislative Session) continued the suspension of the newspaper exemption through June 30,
2002. The applicable rate of tax during this period is 4 percent.
Advertising flyers that are inserted into newspapers are, for purposes of this Louisiana sales tax
exemption, considered a part of the newspapers into which they are inserted. Section
61:I.4401(D)(3) of the Louisiana Administrative Code provides, in pertinent part, as follows:
“This exemption for newspapers includes all printed matter that goes into the
making-up of a newspaper if such printed matter is distributed with and as a part
of the newspaper, including inserts. This definition does not include magazines
and does not include any other printed matter, regardless by whom printed, that is
not a part of and is not distributed with a newspaper. Thus, printed matter that
goes into a newspaper and is distributed with it is exempt from sales tax while the
same printed matter that does not go into a newspaper or is not distributed with it
is not exempt.”
Except for the suspension of the “newspaper” exemption by Acts 18 and 33, printed matter
purchased to be inserted into and distributed as part of newspapers would be exempt from state
sales tax regardless of whether the purchase is made by an advertiser or by a newspaper
publisher. However, because the newspaper exemption is suspended, advertisers cannot claim
the exemption when purchasing printed matter from printing firms that the advertiser has
delivered to newspaper publishers for insertion and distribution as part of newspapers.
In the typical scenario, an advertiser or its agent will engage a printing firm to print a quantity of
flyers. The advertiser or its agent will then furnish the flyers to a newspaper publisher without

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue
employees. It is issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of
law and is not binding on the public. It is a statement of the department's position and is binding
on the department until superseded or modified by a subsequent change in statute, regulation,
declaratory ruling, or court decision.

Revenue Ruling No. 01-015
Page 2 of 2

charge. The publisher will insert and distribute the flyers with a newspaper. The publisher will
charge the advertiser or its agent for the service of inserting and distributing the flyers. The
advertiser or the advertiser’s agent will owe the state sales or use tax on the full acquisition “cost
price” or “sales price” of the flyers and printing services acquired from the printing firm. The
tax will be payable at the rate applicable to suspended exemptions.
Even though the “newspaper” exemption is suspended, commercial newspaper publishers whose
publications and inserts are for sale can continue to acquire comic inserts, printed television
schedules, Sunday magazines, and other property for resale as part of their newspapers without
the payment of state sales or use tax. Newspaper publishers who have been issued state sales tax
wholesaler accounts can, when making purchases, claim advance sales tax exemption by
presenting Department of Revenue exemption form LGST-9 to their vendors. Other publishers of
newspapers for sale can, when filing their state sales tax returns, claim credit for the advance
sales taxes that they have paid to their vendors on property purchased for resale.

Cynthia Bridges
Secretary

By:

Raymond E. Tangney
Senior Policy Consultant
Policy Services Division