Is the retail purchase of a newspaper supposed to be tax free in Maryland?

[astro]

Have two differing sources on this. On one hand friend says that due to little known quirk in Maryland state law they are not supposed to be subject to retail sales tax, and on the other hand every place that sells newspapers I have asked this question has never heard of this. It's only a few pennies but I am curious as to whether he is correct or not.

[astro]

Would a kindly passing mod please change the title header to

be tax free in Maryland

[Kalhoun]

I was under the impression that all periodicals (newspapers, monthly magazines, etc.) are tax-free everywhere. Maybe I'm wrong, but that's certainly the way it is in Illinois.

[ski]

Kalhoun, everywhere I've been (and that's a lot of the U.S.) I cannot remember ever NOT paying taxes on magazines and newspapers. Granted, some places sell them for less than the cover price, but they've still added tax on.

[Nametag]

Behold: the subscription rates for the DelMarVa Farmer Newspaper (http://www.americanfarm.com/Subscription%20Rates.html):Maryland Residents

1 Year $24.00 + $1.00 MD Sales tax = $25.20And the Republican (http://www.therepublicannews.com/subscrip.html) of Garrett County:INSIDE MARYLAND

(Includes Md. sales tax)
One Year ................. $21.00
Six Months .............. $14.18
Three Months ......... $11.03In other words, hogwash.

[missbunny]

They are starting soon, or may have already started, charging sales tax on newspapers in MA. Boston Magazine did a little article recently on taxed and non-taxed items - it was weird; there were things like "baby lotion - taxed; baby oil - not taxed" (I'm making those up - I can't remember for sure). But there is a Web site in MA, and probably in MD, that tells you exactly which items are taxed. Might be able to find it through Google.

I have always paid tax on magazines in MA.

[FatBaldGuy]

This link (http://business.marylandtaxes.com/taxinfo/salesanduse/default.asp) is to the Sales and Use Tax information page of the Comptroller of Maryland. I didn't see anything about exceptions for newspapers.

[Achernar]

So, when you buy a newspaper out of a machine, are you paying sales tax?

[CookingWithGas]

There doesn't seem to be tax when you buy it from a paper box, but I'll bet the newspaper is paying the sales tax.

[postcards]

I can understand sales tax on subscriptions: the tax is on the service, not the product.

Magazines and newspapers, even when purchased in bookstores, I've never paid sales tax on.

I'm in New York State.

[Munch]

Nametag, any evidence that "subscription fees" mean the exact same thing as "retail purchase"?

[Bravic]

Maryland Regulation 03-06-01-04:

.04 Newspapers.
A. Printing and Sale.

(1) The printing and sale of newspapers that are distributed by the publisher at no charge are not subject to the sales and use tax.

(2) The sale of an item which is to be distributed as a component part of a newspaper, such as an advertising supplement, is not subject to the tax.


The regulation goes on to distinguish newspapers from magazines and books. So if you pay for a newspaper, it is taxable, but free ones are not (duh). However, those printing free newspapers are given the same exemptions as those selling newspapers (such as tax free purchases of paper, ink, etc.).

There are a few states that exempt publications such as newspapers, magazines and books. Most started by wanting to exempt sales of the Bible, but since that violates church/state separation principles, they opted to either tax all publications or exempt all publications.

And yes, those purchased from street boxes are usually absorbing the tax. However, there are states that don't have the heart to go after the neighborhood paper boy/girl. Technically though, they are usually independent retailers and should be collecting tax in those states that have sales taxes.

[bradwalt]

I always pay the "Cover" price on a newspaper in Massachusetts, either from a store, vending machine or newstand. I would love to hear the SD on this.

I'm not doubting that "missbunny" is paying the sales tax in Massachusetts, but maybe the individual store can decide how the tax should be collected and paid to the state? I pay exactly "$2.00" for the Sunday Boston Globe.

Wild Guess:
If newsapers are subject to sales tax, I'm wild-guessing that the sales tax is included in the cover price, and the store audits the amount of tax due to the state by using a "periodical/newspaper" key on the cash register, or by tabulating the invoices from the news distributor? Next time I buy a paper, I'll ask the guy!

[missbunny]

Huh. I just looked up the MA DOR and it says magazines are exempt from sales tax. I could swear I have paid it. Well, it also says that newspapers are exempt, and doesn't say anything about that changing soon, although it is.

I have heard that many stores get the regulations mixed up and charge tax on exempt items and don't charge it on non-exempt items. Most people don't notice because the rules are so wacky (like that baby lotion/baby oil thing). Maybe I have been buying my magazines at the wrong stores!

[missbunny]

Wow, it just gets weirder. Gum is exempt (because it's a "food" - um, okay) but dietary supplements and vitamins are taxed. Sewing goods are exempt but sewing kits are taxed. Boy, those DOR people are nutty.

[bradwalt]

Missbunny: No wonder those convenience store clerks in Massachusetts are confused! And I'm glad you reposted with your correction about magazines, because I was pretty sure I've never paid tax here.

Still would like to hear more from other states which do tax the newspapers: are vending machines prices the same? But without the tax? And newstands? I just can't imagine paying 53 cents . Or do they figure out the cover price so that you can plop down two quarters on the counter and not worry about the pennies?

[Bravic]

Exemptions vary by state. Sales tax is not a federal tax. Each state has its own sovereignty with respect to the type of tax they can enact and the rate and exemptions available, with limitations pertaining to interstate commerce, Indian tribes and federal government transactions.

Unfortunately, many multi-state businesses are set up to follow the same rules, so while magazines are exempt in Massachusetts, they are taxable in most other states, so the register software just taxes them regardless of location.

There is work on a streamlined plan for uniform regulations in all the states for the various sales tax rules that exist. This is supposedly to allow for the taxation of internet sales. However, even as the states approve this change, it will take action by Congress to allow it to be enacted.

[Nametag]

Originally posted by Munch
Nametag, any evidence that "subscription fees" mean the exact same thing as "retail purchase"? Are you implying that newspaper subscriptions are wholesale?

[astorian]

Odd factoid: here in Texas, I can buy just about any newspaper without paying sales tax, but if I buy a copy of the New York Times at 7-Eleven, I have to pay 8 cents of sales tax on top of the regular 1 dollar price.

This doesn't make much sense, seeing as how they don't charge sales tax on other out-of-state papers (like the Wall Street Journal) and the same paper is available tax-free in vending machines.

[ElwoodCuse]

In Pennsylvania, newspapers aren't taxed but magazines are. But if you subscribe to a magazine, it isn't taxed. I could never figure that out.

My favorite tax story is I heard a state (I think California) taxes the tiny, hot chocolate sized marshmallows, but not the big smore sized marshmallows.

[cstamets]

In Ohio, magazines are taxed but newspapers aren't. As I was told by a bookstore cashier, if it has a staple, it's taxed. Most newspapers, of course, don't have a staple, but some of the hobby-type newspapers are stapled, and so are taxed, as they are apparently considered magazines that happen to be printed on newsprint.