SN 2003(5)

Sales and Use Taxes on Magazines and Newspapers

This publication has been superseded by SN 2003(5.1)

Purpose: This Special Notice discusses the repeal of the exemption in Conn. Gen. Stat. §12-412(6) for sales of magazines and newspapers, and provides transitional rules for applying tax to sales of subscriptions occurring before and after April 1, 2003.

Effective Date: Applicable to sales of magazines and newspapers occurring on and after April 1, 2003.

Statutory Authority: Applicable to sales of magazines and newspapers occurring on and after April 1, 2003.

Magazines and Newspapers Are Taxable: Effective April 1, 2003, all sales of newspapers and magazines, including sales by subscriptions, are subject to Connecticut sales and use taxes. The exemption in Conn. Gen. Stat. §12-412(6) for sales of newspapers and magazines by subscription has been repealed. 

Over-the-counter sales of magazines have been and remain subject to tax.  As of April 1, 2003, all sales of magazines and newspapers are taxable whether sold over the counter or from honor boxes in Connecticut or by subscription to Connecticut subscribers.  Sales of magazines and newspapers mailed or delivered to out-of-state subscribers or purchasers are not subject to Connecticut sales and use taxes.

Sellers of Magazines and Newspapers: A Connecticut seller is a seller having any physical presence in Connecticut, including, generally, owning or leasing real or tangible personal property in Connecticut, maintaining an office in Connecticut, or having agents or employees present in Connecticut.

A Connecticut seller that sells magazines or newspapers to purchasers in Connecticut must register with the Department of Revenue Services (DRS) as a retailer by filing Form REG-1, Business Taxes Registration Application (if the magazines or newspapers are sold from a location within Connecticut), or Form REG-7, Application for Authority to Collect Connecticut Use Tax (if the magazines or newspapers are sold from a location outside Connecticut). The Connecticut seller must charge, collect, and remit sales or use tax to DRS.

A purchaser of magazines or newspapers in Connecticut is liable for use tax on the purchase of those magazines or newspapers, if the seller of the magazines or newspapers does not charge and collect Connecticut sales or use tax.  If not charged tax by the seller, the purchaser must self-assess the use tax.  It is the purchaser’s responsibility to determine if the seller charges the tax, and if not, to pay the tax directly to DRS.

Newspaper Carriers: Newspaper carriers who sell newspapers directly to subscribers must register as retailers and collect and remit the sales tax on their sales.

In the alternative, the wholesaler of the newspapers may contact DRS to enter into an Agreement to Collect and Remit Connecticut Use Taxes, which allows the wholesaler to remit the tax to DRS on behalf of the carriers.  To request an agreement, wholesalers may write to:

Department of Revenue Services
Legal Division
25 Sigourney Street
Hartford CT 06106

Publications Received Electronically: Charges to access magazines or newspapers over the Internet are considered charges for on-line access to information, and are taxable as computer and data processing services at the reduced rate of 1%.  The tax on computer and data processing services is scheduled to be repealed for sales made on or after July 1, 2004.  Computer and data processing services are subject to tax if the purchaser’s computer equipment used to access the information is located in Connecticut.  In the case of mobile computer equipment, the benefit of the service is received in Connecticut if the home base of the mobile computer is located in Connecticut.

Transitional Rules: Over-the-counter and honor box sales of magazines or newspapers on or after April 1, 2003, are subject to sales and use taxes at the rate of 6%.

Sales made on or after April 1, 2003, of subscriptions to magazines or newspapers are taxable as follows.  Payments made:

• Before April 1, 2003, for a subscription period beginning before April 1, 2003, and ending after that date are not taxable.
• Before April 1, 2003, for a subscription period beginning on or after April 1, 2003, are fully taxable.
• On or after April 1, 2003, for a subscription period beginning before April 1, 2003, and ending after that date are taxable on that portion of the subscription provided on or after April 1, 2003.
• On or after April 1, 2003, that are for past due charges for subscription periods that ended before April 1, 2003, are not taxable.

Tax must be paid with the Form OS-114, Sales and Use Tax Return, that is due on the last day of the month following the tax period in which charges are made.

Information for New Retailers: Service providers that will be charging and remitting sales and use taxes for the first time should consult Informational Publication 2000(26), Getting Started In Business, for information on how to register as retailers and file sales and use tax returns.

Effect on Other Documents: Special Notice 2003(5) obsoletes Special Notice 98(13), Sales and Use Tax Exemption for Sales of Newspapers, and Ruling No. 94-19. Special Notice 98(8), 1998 Legislation Affecting Sales And Use Taxes; Admissions, Cabaret and Dues Tax; and the Motor Vehicle Rental Surcharge, Special Notice 96(3), 1996 Legislation Affecting the Sales and Use Taxes and the Tire Fee, and Special Notice 91(1), 1991 Legislative Changes Affecting Sales and Use Taxes, are obsoleted in part to the extent they discuss Conn. Gen. Stat. §12-412(6).

Effect of This Document: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions.  A Special Notice indicates an informal interpretation of Connecticut tax law by DRS and may be referred to for general guidance by taxpayers or tax practitioners.

For Further Information: Please call DRS during business hours, Monday through Friday:

• 1-800-382-9463(in-state), or
• 860-297-5962(from anywhere)

TTY, TDD, and Text Telephone users only may transmit inquiries 24 hours a day by calling 860-297-4911.

SN 2003(5)
Sales and use taxes
Magazines and newspapers
Issued: 03/14/2003