Is Texas sales tax due on information services sold to a newspaper?

Plain-English summary

A business asked the Comptroller's office to clarify whether sales of information services to a newspaper are taxable. The Comptroller confirmed that under Tax Code Section 151.0038, the sale of information services to a newspaper is excluded from sales tax, no matter how the newspaper uses that information.

The seller does not need to collect an exemption certificate from the newspaper to support the exempt sale. Instead, the seller must be able to document — through an invoice, subscription contract, receipt, or similar record — that the sale of information was in fact made to a newspaper.

What this means for you

Businesses selling information services to newspapers

If you sell information services (such as news wire feeds, data subscriptions, or similar information products) to a newspaper, you do not need to charge Texas sales tax on those sales, and you do not need to collect an exemption certificate from the newspaper. Keep normal business records — invoices, subscription contracts, or receipts — that identify the buyer as a newspaper, since that documentation is what supports the exempt treatment if the sale is ever questioned.

Accountants and tax professionals

This letter confirms that the Section 151.0038 exclusion for information services sold to newspapers applies regardless of how the newspaper uses the information, and that the standard exemption-certificate process does not apply here — the burden is on the seller to retain adequate documentation identifying the buyer as a newspaper.

Common questions

Q: Is Texas sales tax due on information services sold to a newspaper?
A: No. Tax Code Section 151.0038 excludes such sales from sales tax, regardless of how the newspaper uses the information.

Q: Does the newspaper need to give the seller an exemption certificate?
A: No. The seller is not required to obtain an exemption certificate from the newspaper.

Q: What does the seller need to keep on file instead?
A: Documentation showing the sale of information was made to a newspaper — for example, an invoice, subscription contract, or receipt.

Citations and references

• Tex. Tax Code § 151.0038

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9411L1322B11

Original ruling text

November 14, 1994

Dear **:

I have been asked to respond to your request for clarification on the
taxability of sales of information services to a newspaper. Please accept this
letter as confirmation of the information you received from Christen Chapman
and Orlando Guerrero.

Section 151.0038 excludes the sale of information services to newspapers,
regardless of how the information is used. You are not required to obtain an
exemption certificate from the newspaper. However, you must be able to
document (e.g., invoice, subscription contract, receipt, etc.) that the sale of
information was made to a newspaper.

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

You may call me toll free at 1-80~31-5441, ext. 5-0037. The direct line is
512/475-0037. You also may write to Tax Administration Division, Comptroller
of Public Accounts.

Sincerely,

Lindey Osborne
Tax Administration Division

NOTE: Previous Accession Number 9411674L