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Ezel / Tax Rulings / TX
TX 8705L0819A10 Sales and/or Use Tax (State,Local,MTA) 1987-05-22

Were newsletter subscription charges, shipping and handling, and binders taxable in Texas?

Short answer: Newsletter subscription charges and a $5 shipping-and-handling fee were taxable. Included binders could be bought for resale, but binders given away were taxable to the publisher.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This 1987 Texas Comptroller letter addresses one publisher's newsletter, shipping charge, and binder distribution. The name of the newsletter and the item described after the subscription charge are redacted, and the letter cites no statute or rule. Verify current publication, delivery-charge, resale-certificate, use-tax, and local-tax rules. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said the total charge for subscriptions to the publisher's redacted newsletter was taxable. The letter also refers to the collection of another redacted item as taxable, but the source does not reveal what that item was.

The separately described $5 shipping-and-handling charge was also subject to tax.

Binder treatment depended on how the publisher distributed them. Binders included in the newsletter's selling price and not otherwise given away could be bought tax-free with a resale certificate. Binders distributed free to clients apart from subscription sales were taxable to the publisher based on its purchase price.

What this means for you

The letter treated the subscription and related shipping-and-handling charge as taxable. For binders, resale treatment required that they be transferred as part of the sale rather than consumed by the publisher in a free distribution.

Common questions

Was the newsletter subscription charge taxable? Yes.

Was the $5 shipping-and-handling charge taxable? Yes.

Could the publisher buy binders with a resale certificate? Yes, if the binders were included in the newsletter's selling price and were not otherwise distributed free of charge.

What if the publisher gave binders to clients for free? The publisher owed tax based on the binders' purchase price.

What was the other taxable item mentioned with the subscription? It is redacted in the source, so this page does not identify it.

Citations and references

  • The letter cites no statute or administrative rule.
  • Its operative binder distinction is between binders included in the selling price and binders distributed free of charge apart from subscription sales.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller May 22, 1987

Dear ****:

Thank you for your recent letter concerning the taxability of your
newsletter **.

The total charge to customers for subscriptions to ** and the
collection of **** is taxable. The $5.00 charge for shipping and
handling is also subject to tax.

If the binders are included in the selling price of ** and are
not otherwise distributed free of charge to clients, then the binders may be
purchased tax free with a resale certificate. If the binders are distributed
free of charge apart from subscription sales, then the binders are taxable to
****, based on the purchase price.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You may
write me, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4600.

Sincerely,
Julie Pesl
Tax Policy Section
Tax Administration Division

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