May 1, 1990

You ask for a ruling on the application of Massachusetts sales tax to purchases of _________ ("Publication") by ("Company"). You ask whether the Company's purchases of the Publication are exempt from use tax under G.L. c. 64H, § 6(m), as purchases of magazines. We conclude that the Publication is not a magazine and that the Company's purchases are taxable.

Fact Setting

The Company publishes the Publication thirteen times a year or every four weeks. The Publication is bound in a format similar to publications commonly accepted to be magazines; the front of the Publication is a full-color photograph, and the outside is softcover. The Publication identifies itself as a magazine in its masthead. The Publication consists of fifty to seventy pages, printed on both sides, of real estate listings of properties for sale in a specified area of Massachusetts. The Publication also includes a feature of an average of two-thirds of a page, entitled "Real Estate Newsline" ("Feature"), that contains public service announcements, notices of real estate brokerage personnel changes, awards, and events, and several photographs; the Feature is edited by the Company's President.

The Company purchases the printed copies of the Publication from a printer located in another state. The Company publishes 12,000 to 15,000 copies of each issue of the Publication. The Publication is distributed free of charge to individuals, realtors, businesses, the local Chamber of Commerce, a regional development council, and at newsstands.

Legal Analysis

Massachusetts General Laws chapter 64H imposes a five percent sales tax on all retail sales of tangible personal property, unless otherwise exempted. See G.L. c. 64H, § 2. General Laws chapter 64I imposes a complementary five percent use tax on the use, storage, or other consumption of tangible personal property purchased for use, storage, or other consumption in Massachusetts. See G.L. c. 64I, § 2. Massachusetts exempts from the sales tax sales of newspapers and magazines. See G.L. c. 64H, § 6(m). Sales exempt under any provision of G.L. c. 64H are also exempt from the Massachusetts use tax. See G.L. c. 64I, § 7(b).
For purposes of G.L. c. 64H, § 6(m), the Supreme Judicial Court has defined a newspaper as "distributed at periodic intervals and contain[ing] matters of interest to a significant segment of the public." Greenfield Town Crier v. Commissioner of Revenue, 385 Mass. 692, 696 (1982). The publication at issue in Greenfield Town Crier consisted of a "mixture of news, features, columns, public service announcements and commercial, personal, classified and legal advertising matter." Id. at 693. The Greenfield Town Crier was distributed free of charge, and that fact did not alter the Court's conclusion that the Crier was a newspaper. Id. at 693-94.

The Appellate Tax Board examined the format and content of a publication in determining that a bulletin written by a single person was not a magazine. Robert Welch, Inc. v. State Tax Commission, A.T.B. Docket No. 79965 (Oct. 14, 1977). The Board stated that determining whether the publication was a magazine "is really an application of common sense--of common understanding of the terms rather than checking off one by one the various indicia or characteristics." Id.

In a later case the Appellate Tax Board stated that words such as "magazines" should be construed according to their common and approved usage. Stanley Home Products, Inc. v. Commissioner of Revenue, A.T.B. Docket No. 120842 (Sept. 5, 1986), citing G.L. c. 4, § 6. The Board defined a magazine as "pamphlets published periodically, containing miscellaneous papers or compositions." Id., quoting Houghton v. Payne, 194 U.S. 88, 101 (1904). The Board concluded that a monthly periodical, printed for the company's distributors, containing articles on a company's merchandise, company history, sales opportunities, and helpful hints, was a magazine within the common meaning of the term.

The Department of Revenue has examined format, authorship, and content of publications in a series of Letter Ruling that have determined whether the publications at issue were newspapers or magazines. As to newspapers, the Department has ruled that newsletters containing advertising and articles on recreation, money-saving ideas, health, nutrition, and other matters of interest to older persons and tabloids containing articles on legal controversies, summaries of court opinions and regulations, full texts of selected opinions, news items about career changes, and advertising were "newspapers." See Letter Ruling 83-14, 81-95. On the issue of magazines, the Department has ruled that comic books meet the commonly understood definition of a magazine. Letter Ruling 85-54, quoting Houghton v. Payne, 194 U.S. at 101.

The Department has concluded that: newsletters written by a single person and containing a calendar of horse and riding events and advertising; "nature education letters" containing a single story about nature written by one person; circulars, distributed by banks, containing articles on personal money management and items on banking services; a corporate newsletter on a corporation's economic performance, products, and personnel changes; corporate annual reports; and industry newsletters of interest to specialized segments of the business community did not meet the definition of a newspaper or a magazine. The Department concluded that sales or purchases of all the above described publications were not exempt under G.L. c. 64H, § 6(m). See Letter Ruling 85-58, 84-67, 84-21, 83-86, 81-76.

The Supreme Judicial Court and the Appellate Tax Board have examined the characteristics of the publications they have reviewed to determine whether the publications were indeed newspapers or magazines. The Department of Revenue has similarly in its Letter Ruling examined publications to determine whether they fit under the commonly understood meaning of the terms "newspaper" or "magazine." The Department's approach is consistent with the Court's and the Board's holdings in this area.

The Publication exhibits some of the characteristics commonly attributed to a magazine. The Publication is published on a regular basis. Its cover format resembles that of most publications recognized as magazines, and the Publication shows continuity of subject matter and format from issue to issue. The fact that 12,000 to 15,000 copies are printed for each issue indicates that the Publication is of interest to a significant segment of the public. The advertising in the Publication is of temporary usefulness; it is clearly not a book. See generally Robert Welch, Inc. v. State Tax Commission, A.T.B. Docket No. 79965 (Oct. 14, 1977), for a discussion of the characteristics of magazines, newspapers, and other periodicals.

The Publication also has some characteristics that we do not find persuasive. The Publication calls itself a magazine on its masthead; the Publication's characterization of itself should not affect whether it is a magazine. The Publication is distributed free of charge on a regular and frequent basis. In Greenfield Town Crier, the fact of free distribution did not alter the Crier's eligibility for the exemption. Cf. 385 Mass. at 693-94. Also, whether a publication appears periodically and regularly does not determine whether it is a magazine. See, e.g., Robert Welch, Inc. v. State Tax Commission, A.T.B. Docket No. 79965 (Oct. 14, 1977).

The Publication does not share the characteristics of magazines in two key areas, editorship and content. The Feature is edited by a single person. Cf. Robert Welch, Inc. v. State Tax Commission, A.T.B. Docket No. 79965 (Oct. 14, 1977) (all items in the bulletin were written and edited by a single person). Each issue of the Publication contains only one piece that could be characterized as an article, composition, or miscellaneous paper. See Stanley Home Products, Inc. v. Commissioner of Revenue, A.T.B. Docket No. 120842 (Sept. 5, 1986).

The Publication in its entirety, with the exception of the single Feature, is advertising. The Supreme Judicial Court did not state that a minimum percentage of the Greenfield Town Crier had to be other than advertising for the publication to qualify under G.L. c. 64H, § 6(m). See 385 Mass. at 696. But the Crier, although it was predominantly advertising, contained news stories, features, columns, and public service announcements. See id. at 696.

As stated by the Appellate Tax Board, whether a publication is a magazine "an application of common sense...rather than checking off one by the various indicia or characteristics." Robert Welch, Inc. v. State Tax Commission, A.T.B. Docket No. 79965 (Oct. 14, 1977). We recognize that the exterior of the Publication resembles very closely what people generally expect in a magazine. But on the inside, the Publication contains a single feature and does not include other articles or news stories. While the Publication has some of the indicia of magazines, the Publication does not meet the common understanding of a magazine. We conclude that the Publication is not a magazine, and the Company's purchases of the Publication are not exempt under G.L. c. 64H, § 6(m).


Very truly yours,
Stephen W. Kidder,
Commissioner of Revenue
May 1, 1990
LR 90-3