Does a subscription investment-analysis publication qualify for New York's tax exemption for periodicals, in both its hardcopy and electronic versions?

Plain-English summary

PricewaterhouseCoopers asked on behalf of a client (a publisher of international political/financial media) whether its subscription publication, "Publication C," qualifies as an exempt periodical. Publication C provides news, analyses, political forecasts, and investment recommendations, with an indexed risk-level chart and staff-written articles (no bylines). It comes out four times a year in hardcopy and 12 times a year electronically — the same quarterly content electronically, plus monthly electronic-only updates at no extra charge. It's subscription-only (not sold on newsstands) but open to anyone who pays.

New York exempts periodicals that meet a five-part regulatory test: published at least four times a year, not a book (alone or combined), available to the public, having continuity of title/content/format across issues, and containing varied articles. The Department found Publication C's hardcopy edition satisfies these requirements — it's not a book, has consistent literary character and format, and is available to any subscriber — so the hardcopy version qualifies as an exempt periodical.

The electronic version is a different story. New York's periodical exemption for electronically delivered content only extends the tax-free treatment if the electronic edition matches the paper edition's content exactly (aside from advertising) — a "shadow" of the print product, not something extra. Because Publication C's electronic subscribers get additional monthly updates that aren't in the quarterly hardcopy edition, the electronic version has different content than the print edition, so it does NOT qualify for the periodical exemption. Instead, the Department classified the electronic version's charges as sales of a taxable information service.

What this means for you

Publishers offering print + digital subscription bundles

If you want your electronic edition to share your print edition's periodical exemption, the electronic content (aside from ads) has to be identical to what's in the paper edition — no bonus digital-only content, updates, or extras. Adding exclusive digital content breaks the exemption for the whole electronic subscription, even if the underlying print edition still qualifies.

Publishers of digital-only or updated-more-frequently products

If your electronic product updates more often or contains more than your printed counterpart, expect the electronic version to be taxed separately as an information service rather than riding on the print periodical exemption — structure pricing and invoicing to reflect that if you also sell a qualifying hardcopy edition.

Accountants and tax professionals

This is a clean template for split print/digital periodical products: apply the five-part periodical test to the print edition first, then separately check whether the electronic edition is truly a mirror of the print content before assuming the exemption carries over.

Common questions

Q: Does my quarterly print publication qualify as a tax-exempt periodical?
A: It can, if it meets the five-part test: published at least four times a year, not a book, available to the public, continuity of format/content, and varied articles.

Q: Does the exemption automatically extend to my electronic edition?
A: Only if the electronic edition contains the exact same content as the print edition (aside from advertising) — any additional digital-only content breaks the exemption for that edition.

Q: What happens if the electronic version has extra content?
A: It's taxed separately as a sale of a taxable information service under § 1105(c)(1), even while the matching print edition stays exempt.

Q: Can another publisher rely on this Advisory Opinion?
A: No. It binds the Department only for the petitioner and facts described; another publisher would need matching facts (same print/digital content relationship) to rely on the same result.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(6) (tangible personal property; newspapers/periodicals)
• Tax Law § 1105(a), (c)(1) (retail sale; information services)
• Tax Law § 1115(a)(5) (periodical exemption)
• 20 NYCRR 528.6 (periodical definition and requirements)

Prior rulings referenced:

• American Theater Press, Inc., TSB-A-81(7)S
• The Bureau of National Affairs, Inc., TSB-A-98(55)S
• CCH Incorporated, TSB-A-03(13)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2007.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a07_6s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-07(6)S
Sales Tax
March 16, 2007

Office of Tax Policy Analysis
Technical Services Division
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S050720A

On July 20, 2005, the Department of Taxation and Finance received a Petition for
Advisory Opinion from PricewaterhouseCoopers LLP, 300 Madison Avenue, New York,
New York 10017. Petitioner, PricewaterhouseCoopers LLP, provided additional information
pertaining to the Petition on April 7, 2006.
The issue raised by Petitioner is whether Petitioner's client’s publication (hereinafter
"Publication C") qualifies as a periodical that is exempt from sales tax pursuant to section
1115(a)(5) of the Tax Law.
Petitioner submits the following facts as the basis for this Advisory Opinion.
Petitioner’s client (hereinafter "The Company") publishes media dealing with
international political and financial issues. The Company publishes Publication C which is
designed to provide subscribers with news, analyses, political forecasts, and recommendations on
a variety of topics within the broad subject area of financial investment. Based on the potential
impact of news items, a risk level is assigned and indexed. The index is presented on a chart or
table within Publication C. The publication also includes other charts, tables, and graphs that are
complementary to the analytical articles, political forecasts, or recommendations. Publication C
is available in hardcopy and electronic formats. It is only available through subscription.
Petitioner further asserts that:
•

Publication C is published four times a year in hardcopy form and is published 12
times a year electronically (four quarterly versions plus monthly updates);

•

Publication C does not either singly or when successive issues are put together
constitute a book or reference manual at year end;

•

The Company accepts subscriptions for Publication C from anyone who pays the
subscription fee;

•

each issue of Publication C bears a relationship to prior or subsequent issues with
respect to continuity of literary character, subject matter, style, and format; and

•

articles or materials contained in Publication C are written or prepared by The
Company's staff of writers. There are no author by-lines.

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Sales Tax
March 16, 2007

There is no difference between the quarterly electronic and hardcopy versions. However,
subscribers to the electronic version receive electronic monthly updates as part of the
subscription at no additional charge.
Petitioner submitted sample copies of the print version of Publication C as part of its
Petition.
Applicable law and regulations
Section 1101(b)(6) of the Tax Law defines tangible personal property, in part, as:
Corporeal personal property of any nature. . . . Such term shall also include
newspapers and periodicals where the vendor ships or delivers the entire edition or issue
of the newspaper or periodical, with or without the advertising included in the paper
edition or issue, but not including anything, other than advertising, not in such paper
edition or issue, to the purchaser by means of telephony or telegraphy or other electronic
media, but only where the amount of the sale price to such purchaser of such newspaper
or magazine or the subscription price, in the case of a subscription to a newspaper or
periodical, including any charge by such vendor for shipping or delivery to the purchaser,
is separately stated to such purchaser.
Section 1105 of the Tax Law provides, in part:
Imposition of sales tax. . . . there is hereby imposed and there shall be paid a tax .
. . upon:
(a) The receipts from every retail sale of tangible personal property, except as
otherwise provided in this article.
*

*

*

(c) The receipts from every sale, except for resale, of the following services:
(1) The furnishing of information by printed, mimeographed or multigraphed
matter or by duplicating written or printed matter in any other manner, including the
services of collecting, compiling or analyzing information of any kind or nature and
furnishing reports thereof to other persons, . . .
Section 1115(a) of the Tax Law provides, in part:
Receipts from the following shall be exempt from the tax on retail sales imposed
under subdivision (a) of section eleven hundred five and the compensating use tax
imposed under section eleven hundred ten:

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Sales Tax
March 16, 2007

*

*

*

(5) Newspapers and periodicals.
Section 528.6 of the Sales and Use Tax Regulations (Regulations) provides, in part:
(a) Exemption The sale of newspapers and periodicals is exempt from sales and
compensating use tax.
*

*

*

(c) Definition of a periodical. (1) In order to constitute a periodical, a publication
must conform generally to the following requirements:
(i) it must be published in printed or written form at stated intervals, at
least as frequently as four times a year;
(ii) it must not, either singly or, when successive issues are put together,
constitute a book;
(iii) it must be available for circulation to the public;
(iv) it must have continuity as to title and general nature of content from
issue to issue; and
(v) each issue must contain a variety of articles by different authors
devoted to literature, the sciences or the arts, news, some special industry,
profession, sport or other field of endeavor.
*

*

*

(3) Nothing in this section shall be construed to exempt as a periodical the
following:
(i) advertising material, such as catalogs, flyers, pamphlets and brochures;
(ii) listings and compilations which constitute information services;
(iii) publications which are issued at stated intervals but which are books
or parts of a book.

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Sales Tax
March 16, 2007

Opinion
The Company engages in the publication of hardcopy and electronic versions of
Publication C. Petitioner asserts that (1) Publication C is published four times a year in hardcopy
and electronic form with monthly updates to the electronic version; (2) Publication C does not
either singly or when successive issues are put together constitute a book or reference manual at
year end; (3) The Company accepts a subscription from anyone who pays the subscription fee;
(4) each issue of Publication C bears a relationship to prior or subsequent issues with respect to
continuity of literary character, subject matter, style, and format; and (5) articles or materials
contained in Publication C are written or prepared by The Company's staff of writers.
The sample copies of Publication C submitted by Petitioner indicate that Publication C is
not available on newsstands.
Examination of the sample copies of Publication C indicates that they do not either singly
or when successive issues are put together constitute a book or reference manual. Publication C,
therefore, appears to meet the requirements for being a periodical pursuant to section
528.6(c)(1)(ii) of the Regulations.
It also appears from the examination of Publication C that it has continuity of literary
character, subject matter, style, and format; and thus the publication meets the periodical
requirements of section 528.6(c)(1)(iv) of the Regulations.
Petitioner states that The Company accepts a subscription from anyone who pays the
subscription fee. It appears that even though Publication C is not sold on newsstands, it is
available to the general public by subscription for the purposes of section 526.8(c)(1)(iii) of the
regulations.
See American Theater Press, Inc., Adv Op St Tx Comm, August 7, 1981,
TSB-A-81(7)S for a discussion of the requirement that a publication must be available to the
public.
Based on the representations of Petitioner and an examination of the sample copies
provided by Petitioner, it appears that Publication C meets the requirements of an exempt
periodical set forth in section 528.6(c)(1) of the Regulations. The hardcopy version of
Publication C, therefore, qualifies as an exempt periodical under section 1115(a)(5) of the Tax
Law.
For the electronic version of Publication C to be exempt from sales and use tax, there
must be a tangible paper (hardcopy) edition or issue of the publication which is shipped,
delivered, or sold by conventional means. The entire electronic edition (with or without the
advertising contained in the hardcopy version) must be transmitted to The Company’s customers
by electronic media. In addition, the electronic version cannot include anything (other than such
advertising) which is not in the hardcopy version. See section 1101(b)(6) of the Tax Law, and
The Bureau of National Affairs, Inc., Adv Op Comm T&F, August 6, 1998, TSB-A-98(55)S.

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Sales Tax
March 16, 2007

Petitioner states that subscribers to the electronic version of Publication C receive monthly
updates at no additional charge. An electronic version of Publication C that provides monthly
updates to the quarterly hardcopy version does not have the same content as the hard­
copy version. Therefore, sales of such an electronic version are subject to sales tax under section
1105(c)(1) of the Tax Law. See CCH Incorporated, Adv Op Comm T&F, April 1, 2003,
TSB-A-03(13)S; The Bureau of National Affairs, Inc., supra.

DATED: March 16, 2007

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.