Maine and the Taxation of Publications
- Sep 25, 2013 | Gail Cole
Update, 6.18.14: Effective retroactively to October 1, 2013, any publication that is purchased for distribution without charge as a free publication is exempt from Maine sales tax. Printed paper materials, including advertising flyers and promotional materials, that are purchased for inclusion in a publication are also exempt.
The new (retroactive) exemption is explained on the Maine Revenue Services website. In order for the exemption to be valid, buyers must supply sellers with an affidavit for purchase of free publications and inserts to publications.
Maine Revenue Services (MRS) recently published an information bulletin regarding an upcoming change to the tax status of publications in Maine.
Effective October 1, 2013, sales of publications will be subject to the state's new 5.5% sales tax. The previous sales tax exemption for publications issued at intervals of less than 3 months is no more.
Publications include, but are not limited to:
- Advertising magazines;
- Bulletins and advertising material packaged for mail distribution as a publication;
- Comic books;
- Puzzle books; and
Nuts and bolts
- Publications sold to hotels or similar businesses for the purpose of providing a complimentary copy to their guests are taxable. Since they are not being purchased for resale, they can not be exempt.
- Sales tax is not refunded when subscriptions are cancelled.
- Digital subscriptions are exempt if the publication can not be downloaded to a subscriber's electronic device. If it can be downloaded, the sale is taxable. Maine recently began imposing sales tax on electronic books, too.
- If a bundled subscription applies to both exempt digital publications and taxable print publications, the bundled subscription is taxable.
- Publications sold through vending machines (those cute little street boxes) are subject to sales tax in Maine. MRS anticipates the sales price will include sales tax. "Revenues from the vending box should be divided by 1.055 to arrive at the correct amount of taxable sales to report on the sales tax return."
Subscription sales are recognized in the month the subscription is sold, not on the day of delivery. So long as the delivery of the publication occurs in Maine, the sale is subject to Maine sales tax. However, if the subscription is sold to someone living out-of-state and the publication is delivered out-of-state, the sale is exempt. The taxable status of the subscription is determined at the time of sale; if some of the publications from an out-of-state purchase are eventually delivered in Maine (as to a vacation home), the overall subscription is still exempt.
Exemption certificates and resale certificates
Publications may be sold exempt from sales tax when the purchaser provides a valid exemption certificate to the vendor. Examples of organizations typically exempt from sales tax include churches, hospitals and schools. It is the responsibility of the vendor to ensure all exemption certificates are valid and up-to-date. Retailers wishing to purchase publications for resale must provide vendors with a valid resale certificate.
Want to know more about the taxation of publications in Maine? Read the instructional bulletin.
Or use an automated sales tax solution and stop worrying about sales tax and exemption certificates.
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