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Tennessee: Newspapers to Remain Exempt for Now

  • Mar 18, 2016 | Gail Cole

 How long will this dinosaur remain sales tax exempt in Tennessee?

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.”

Leftover dinosaur

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.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.