Tennessee: Newspapers to Remain Exempt for Now
- Sales Tax News
- Mar 18, 2016 | Gail Cole
Newspapers and other periodicals that are printed entirely on newsprint or bond paper and regularly distributed at least twice monthly are exempt from sales and use tax in Tennessee, as are the advertising supplements distributed with them. At least one lawmaker believes these products should be taxable.
In late January, Senator Todd Gardenhire (R-Chattanooga) introduced SB 1846, which seeks to delete the sales and use tax exemption for retail sales of certain periodicals. He argues there are “too many exemptions in state law” and questions whether or not such an exemption is “justified in today’s environment.”
Bill Co-sponsor Rep. Roger Kane (R-Knoxville) says the exemption originated in the 1930s, “when newspapers had a whole lot more power than they have now.” At the time, he said, newspapers publishers used to threaten to “bury” lawmakers if they didn’t pass the sales tax exemption. He called the exemption “one of those leftover dinosaurs.”
If so, it’s a dinosaur with real fiscal impact in today’s world. According to the bill’s fiscal note, eliminating the exemption would not significantly reduce the number of newspaper periodicals sold but it would increase annual state revenue by approximately $10,900,000; an additional $3,900,000 would go to local governments.
Lawmakers have discussed but not voted on the bill. It’s been assigned to the General Subcommittee of the Senate Finance, Ways, and Means Committee on March 15, 2016, and there it remains. However, The Tennessean reports that Sen. Gardenhire has “removed the bill from consideration for the year.” He plans to “re-examine the issue next year.”
In the meantime, the exemption under TAC 67-6-329 stands. It’s in good company — joined by a diverse group that includes sales of United States and Tennessee flags sold by nonprofit organizations, certain parking privileges for students, and industrial materials and explosives for future processing.
Sales and use tax exemptions vary from state to state, adding complexity to compliance. Sales tax software (SaaS) helps simplify it. Learn more.