Is a monthly financial newsletter of stock recommendations a tax-exempt periodical, or a taxable information service?

Plain-English summary

Generic Stock Investment Service, Inc. publishes a monthly financial newsletter — six pages an issue, about four and a half of them buy/sell analysis and recommendations on specific stocks — sold to the public at $200 a year. It asked whether the newsletter is a tax-exempt periodical.

The Department said no — it is a taxable information service.

• It looks like a periodical, on paper. The Department agreed the newsletter appears to satisfy the five-part periodical test in 20 NYCRR § 528.6(c)(1): published at least four times a year, not a book, available to the public, continuous in title and general content, and carrying a variety of articles.
• But there's a carve-out. Under 20 NYCRR § 528.6(c)(3)(ii), the periodical rule does not exempt "listings and compilations which constitute information services." And 20 NYCRR § 527.3(a)(3) says specifically that stock market advisory and analysis reports are information services.
• Result: because the newsletter's core is stock advice, it is a taxable information service under Tax Law § 1105(c)(1), not an exempt periodical under Tax Law § 1115(a)(5) — so its receipts are subject to New York State and local sales tax.

What this means for you

Calling something a "newsletter" or "periodical" doesn't make its receipts tax-free. New York's periodical exemption has an explicit exception: if the publication is really an information service — a listing or compilation of data furnished to subscribers — it stays taxable, even if it otherwise checks every box of the periodical definition.

Financial and stock-advisory publications are squarely in the taxable column. The regulation names stock market advisory and analysis reports as information services. A subscription product built around specific buy/sell recommendations is taxable, whatever its format or frequency.

Look at the substance of what subscribers are buying. A magazine of general-interest articles can be an exempt periodical; a data or advisory feed dressed up in article form is a taxable information service. If your product mainly delivers compiled information or recommendations, plan to collect sales tax.

Common questions

Q: My investment newsletter comes out monthly and has articles — isn't that a tax-exempt periodical?
A: Not if its substance is stock advisory/analysis. The Department treated exactly such a newsletter as a taxable information service under § 1105(c)(1), because § 528.6(c)(3)(ii) and § 527.3(a)(3) pull stock-advisory content out of the periodical exemption.

Q: What kinds of publications do get the periodical exemption?
A: Publications that meet the § 528.6(c)(1) test (at least quarterly, not a book, public, continuous, a variety of articles) and are not listings/compilations amounting to an information service.

Q: Does charging by subscription change the answer?
A: No. The taxability turns on the nature of the content (an information service), not on how it's sold.

Citations and references

Statute and regulation:

• Tax Law § 1105(c)(1) — imposes tax on furnishing information, including collecting, compiling, or analyzing information and furnishing reports to others (an "information service"), with certain exclusions
• Tax Law § 1115(a)(5) — exempts receipts from retail sales of newspapers and periodicals
• 20 NYCRR § 528.6(c)(1) — five requirements to be a "periodical": published at least four times a year; not a book; available to the public; continuity of title and general content; and a variety of articles by different authors
• 20 NYCRR § 528.6(c)(3)(ii) — the periodical rule does not exempt listings and compilations that constitute information services
• 20 NYCRR § 527.3(a)(3) — stock market advisory and analysis reports constitute information services

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1988.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a88_44s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-88 (44)S
Sales Tax
September 13, 1988

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S880608B

On June 8, 1988, a Petition for Advisory Opinion was received from Generic Stock
Investment Service, Inc., Norstar Bank Building, Ithaca, New York 14850.
The issue raised is whether Petitioner's publication qualifies as a periodical, and if so, is
exempt from sales tax pursuant to Section 1115(a)(5) of the Tax Law.
Petitioner provides a monthly newsletter which contains financial investment information.
Petitioner states that individual newsletters are not intended to comprise a book or manual.
Subscriptions to Petitioner's newsletter are available to the general public at a cost of $200.00 per
year. The newsletter has continuity as to title and general nature of content from issue to issue. Each
issue contains a variety of articles prepared by a writing staff.
It is noted that the sample copies of Petitioner's newsletter which were submitted as part of
the petition each consist of six pages, four and one-half pages of which consist of analysis and
recommendations regarding the purchase or sale of specific stocks. The remainder of the newsletter
consists of approximately one page of articles devoted to the discussion of various aspects of the
methodology of the newsletter and approximately one-half page devoted to investment or financial
news articles.
Section 1105(c)(1) of the Tax Law imposes tax upon:
The furnishing of information by printed, mimeographed or multi
graphed 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, but excluding the furnishing of information
which is personal or individual in nature and which is not or may not
be substantially incorporated in reports furnished to other persons,
and excluding the services of advertising or other agents, or other
persons acting in a representative capacity, and information services
used by newspapers, radio broadcasters and television broadcasters
in the collection and dissemination of news.
Section 1115(a)(5) of the Tax Law states that receipts from the retail sale of newspapers and
periodicals are exempt from tax.
Section 528.6(c)(1) of the Sales and Use Tax Regulations defines a periodical as a
publication which meets the following requirements:
(i)
TP-9 (9/88)

it must be published in printed or written form at stated intervals, at least as
frequently as four times a year;

-2­
TSB-A-88 (44)S
Sales Tax
September 13, 1988
(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.

However, section 528.6(c)(3)(ii) of the Sales and Use Tax Regulations provides that the
provisions of section 528.6(c)(1) shall not be construed to exempt as a periodical "listings and
compilations which constitute information services."
Section 527.3(a)(3) of the Sales and Use Tax Regulations specifically provides that stock
market advisory and analysis reports constitute information services.
Therefore, even though Petitioner's newsletter may conform to the requirements of section
528.6(c)(1), the newsletter does not qualify as a periodical because it falls within the exception
provided under section 528.6(c)(3).
Accordingly, Petitioner's newsletter is considered to be an information service pursuant to
section 1105(c)(1) of the Tax Law and is subject to state and local sales tax.

DATED: September 13, 1988

s/FRANK J. PUCCIA
Director
Technical Services Bureau

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