LR4060 

RE:  On-line Newspaper Subscriptions

September 26, 2007

Dear Applicant:
 
This is a letter ruling issued by the Director of Revenue pursuant to Section 536.021.10, RSMo, and Missouri Code of State Regulation 12 CSR 10-1.020 in response to your correspondence dated on July 20, 2007.

The facts as you presented on behalf of your client are summarized as follows:

Applicant represents various member newspapers in the state, consisting of both dailies and weeklies, which provide on-line websites for their newspapers.  All of the member newspapers sell subscriptions to the newspaper.  Some of the newspapers restrict access to the on-line version of the newspaper, but provides more complete access to the on-line version either by providing print subscribers with codes to access the on-line version or by selling subscriptions to the on-line version of the newspaper.  The on-line version does not provide a tangible physical copy of the newspaper, only on-line access to the electronic data maintained on the web site.

Issue:

Are the “online” newspaper subscription charges subject to sales or use tax?

Response:

No, the “online” newspaper subscription charges are not subject to sales or use tax. 

Under Section 144.020, RSMo, a sales tax is imposed upon sellers for the privilege of selling tangible personal property and certain enumerated services in the state.  Section 144.610, RSMo, imposes a use tax on the privilege of storing, using, or consuming tangible personal property within the state. 

Section 144.020(4), RSMo, imposes a sales tax on local or long distance telecommunications service used for transmission of messages and conversations.  Section 144.010(13), RSMo, defines telecommunications service as the transmission of information by wire, radio, optical cable, coaxial cable, electronic impulses, or other similar means.  As used in this definition, "information" means knowledge or intelligence represented by any form of writing, signs, signals, pictures, sounds, or any other symbols.  Telecommunications service is defined to not include, in part, “access to the Internet, access to interactive computer services or electronic publishing services” if separately stated “on the customer's bill or on the records of the seller maintained in the ordinary course of business.”

Separately stated charges for an online newspaper subscription are not for the sale of tangible personal property and are not for one of the enumerated taxable services pursuant to Section 144.020, and are therefore not subject to sales or use tax.

This letter ruling is binding upon the Department of Revenue with respect to Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.  For this reason, the interpretation set forth above should be reviewed on a regular basis. Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.

Should additional information be needed, please contact Gary Barnhart, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475 (Phone 573-751-0961), or me.

Sincerely,

Trish Vincent