You inquire whether the Massachusetts sales tax will apply to sales of Legal Information Management Index ("Index").
The Index will be a guide to recently published articles and reviews of interest to law librarians. Articles will be referenced by key word in title and by author; reviews will be referenced by title of the work reviewed. The Index will include no actual articles or reviews, but only alphabetical lists of key words, authors and reviews, followed by citations.
The Index will be published monthly in paper, either with a cardboard cover or as a loose-leaf service. Annual commutations will be published as permanent hardbound volumes that will replace the issues that have been published during the preceding year.
Regulation 830 CMR 64H.07 defines a "newspaper" as follows:
"A newspaper is a paper distributed at stated, periodic intervals, and containing news and other matters of interest to a significant segment of the public." (emphasis added.)
The term "magazine" is not expressly defined by statute or regulation. However, a "magazine" likewise must contain "news" and matters of interest to a "significant segment of the public."
The Index does not meet the requirements of the above definition. The Index is not "news" because it does not contain any articles or news information, but merely alphabetical lists of key words, authors and reviews etc. followed by citations. This is reference information designed for repeated use over an extended period of time. Editions of the Index will be cumulated annually in permanent hardbound volumes. Buyers or subscribers of the index will value these volumes not because they contain new and current information but rather because they contain reference information of permanent value. "We focus on the buyer's basic purpose, Houghton Miflin Co. v. State Tax Commission, 373 Mass. 727, 774 (1977), in order to determine whether within the meaning of Ch. 64H, § 6(m), a given transaction is exempt from sales and use taxation," Greenfield Town Crier v. Commissioner of Revenue, 385 Mass. 692, 696 (1982). Here the buyer's basis purpose is to obtain a reference work of lasting value, not a series of discrete editions of "news."
The Index also fails to meet the second requirement of the above definition, namely that it be of interest to a significant segment of the public. Your inquiry letter acknowledges that the Index will be of interest primarily to "librarians managing legal collections." This group is too small and its interests too specialized to be considered a "significant segment of the general public."
Based on the foregoing, it is ruled that sales of the Index are subject to the sales tax.
Very truly yours
Ira A. Jackson
Commissioner of Revenue
March 05, 1984
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