California updates taxability of news subscriptions
- Sales Tax News
- Aug 31, 2016 | Gail Cole
Once upon a time, news was obtained primarily from printed newspapers. From California to Maine, morning coffee was accompanied with the rustle of turning pages and inked fingers. That still happens, but an increasing number of us now turn to their computers and mobile devices to obtain our news. As a result, some sales and use tax laws governing newspaper subscriptions are outdated.
The California Board of Equalization recently approved an amendment to Regulation 1590, Newspapers and Periodicals. It clarifies how California sales and use tax applies to mixed newspaper subscriptions, those allowing access to digital content in addition to the printed word.
Beginning October 1, 2016, “it is presumed that fifty-three percent of the lump-sum charge for a mixed newspaper subscription is for the nontaxable sale of the right to access digital content.” Accordingly, 47% of the charge is considered to be a taxable sale of printed material.
Newspapers are entitled to rebut this presumption by providing “evidence demonstrating … that the digital-only subscription rate is greater than fifty-three (53) percent.” Tax rates are subject to change quarterly.
The taxation of digital goods and content is much in flux, making compliance challenging. Sales tax automation software enables businesses in all states to comply with the most up-to-date rates, rules, and regulations. Learn more.