Authority: IC 6-8.1-3-3

Affected: IC 6-2.5

Sec. 26. (a) General rule. In general, sales of all publications irrespective of format are taxable. The exemption provided by this rule [45 IAC 2.2] is limited to sales of newspapers.

(b) Application of general rule. For purposes of the state gross retail tax, the term "newspaper" means only those publications which are:

1. (1) commonly understood to be newspapers;
2. (2) published for the dissemination of news of importance and of current interest to the general public, general news of the day, and information of current events;
3. (3) circulated among the general public;
4. (4) published at stated short intervals;
5. (5) entered or are qualified to be admitted and entered as second class mail matter at a post office in the county where published; and
6. (6) printed for resale and are sold.

(c) Publications which are primarily devoted to matters of specialized interest such as business, political, religious, or sporting matters may qualify for exemption if they also satisfy the criteria listed in subsection 26 of this rule [subsection (b) of this section].

(d) Magazines, periodicals, journals, bulletins, advertising supplements, handbills, circulars, or the like are not newspapers until distributed as a part of a publication which is a newspaper within the meaning of this rule [45 IAC 2.2].

1. (1) Magazines are not construed to be newspapers. The retail sales of all magazines and periodicals are subject to the sales tax. The sale of magazines by subscription is subject to sales tax without regard to the price of a single copy, and sales tax must be collected by the seller from the person who subscribes to the magazine on the full subscription price.

2. (2) For purposes of the state gross retail tax, the term "newspaper" shall include advertising inserts. Advertising inserts shall mean only those publications which are:

   1. (A)(i) produced for a person by a private printer and delivered to the newspaper publishers, or
   2. (ii) produced and printed by a newspaper publisher, or
   3. (iii) produced and printed by a person and delivered to the newspaper publisher, and
   4. (B) inserted by the newspaper publisher into the newspapers and distributed along with the newspapers.
3. Any distribution not meeting the above test does not qualify for the newspaper insert exemption. Examples of items distributed with a newspaper that do not qualify for the newspaper insert exemption include: gum, shampoo, and detergent samples.

(e) Publications issued monthly, bimonthly, or at longer or irregular intervals are generally not considered to be newspapers.

(f) Racing forms and tip sheets are not newspapers.

(g) A preponderance of advertising, lack of authorization to carry legal advertising, or lack of a masthead setting forth the publisher, editor, circulation, and place of publication are characteristics of publications other than newspapers.

(h) For exemptions pertaining to purchases and expenses of newspaper publishers, refer to Regs. 6-2.5-5-3 [45 IAC 2.2-5-8 through 45 IAC 2.2-5-10], Regs. 6-2.5-5.1 [45 IAC 2.2-5-12 through 45 IAC 2.2-5-13] and Regs. 6-2.5-5-6 [45 IAC 2.2-5-14].

(Department of State Revenue; Ch. 5, Reg. 6-2.5-5-17(010); filed Dec 1, 1982, 10:35 am: 6 IR 45; filed Aug 6, 1987, 4:30 pm: 10 IR 2635)