Were 12-month subscriptions to monthly or biweekly comic books taxable in Texas?

Plain-English summary

A seller planned to offer 12-month subscriptions to comic books published monthly or biweekly. The books contained advertising and would be mailed by second- or third-class postage.

The Comptroller ruled that the subscription sales were taxable because the comic books did not qualify as magazines. Specifically, they did not contain stories, articles, and essays by various writers as required by Rule 3.299(b)(1).

The reseller could issue a resale certificate to publishers instead of paying tax on comic books purchased for resale.

What this means for you

Publication frequency, advertising, and mailing class did not establish magazine status in this letter. The content requirement in Rule 3.299 controlled the result.

Common questions

Were the subscriptions taxable? Yes.

Why were the comic books not magazines? They lacked stories, articles, and essays by various writers as required by the rule.

Could the subscription seller buy the comic books for resale? Yes. The letter allowed a resale certificate for comic books purchased from publishers for resale.

Citations and references

• 34 Tex. Admin. Code Rule 3.299(b)(1) (newspapers, magazines, publishers, and exempt writings)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9012L1061E13

Original ruling text

December 6, 1990

Dear **:

In your letter of December 1 you requested information regarding the taxability
of comic book subscription sales.

You state that you will sell 12 month subscriptions to comic books which are
published monthly or bi-weekly. The comic books contain advertising and will be
mailed by second or third class postage.

Your subscription sales of the comic books are taxable because the books don't
qualify as magazines. Specifically, the books don't qualify as magazines
because they don't contain stories, articles, and essays by various writers as
required in subsection (b)(1) of the enclosed Comptroller's Rule 3.299
(Newspapers, Magazines, Publishers, Exempt Writings). You may issue a resale
certificate to the publishers in lieu of tax on purchases of comic books that
you resell.

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

If you have any questions, please contact Tax Correspondence. You may call toll
free 1-800-252-5555, or our regular number is 512/463-4600. My extension is
3-4662. You may write me at Tax Correspondence, Comptroller of Public Accounts.

Sincerely,

Bob Jeffcoat
Tax Correspondence