August 10, 1993
You request a letter ruling on the application of Massachusetts sales tax, G.L. c. 64H, to sales by the Club ("the Company") of a publication entitled ("the Publication"). Specifically, you ask whether the Company's sales of the Publication are exempt from sales tax under G.L. c. 64H, § 6(m) as sales of magazines. For reasons set forth below, we include that the Publication is a "magazine" within the meaning of G.L. c. 64H, § 6(m), and that sales of the Publication are not subject to tax.
Facts
You state the following facts. The Publication is published for the general interest of people who attend and follow the game of ("Sport") and the ("Team") in the New England area. The Company publishes four "editions" of the Publication during a seven-month period each year. Each such edition has several printings due to the fact that different teams come to Boston to play the home team. On an average only four of the pages change each time a different visiting team plays the home Team.
The Company published approximately 50,000 copies of each edition of the Publication during the last calendar year. The cumulative annual readership of the Publication is two million. Most of the copies are sold by independent vendors operating in the immediate vicinity of the Team's facility before and during games. The Publication is also sold at three non-affiliated retail outlets in the greater Boston area that specialize in licensed sports merchandise. In addition, a number of copies are also distributed without charge to current and potential advertisers or as promotional giveaways. The Publication also is available by subscription.
The Publication is bound in a format similar to publications commonly identified as magazines, namely, in full-color printed glossy softcover; the text is printed on both sides on glossy magazine-quality paper and usually is composed of seventy-eight pages, consisting of text, photographs, illustrations, and advertisements. The Publication's content is selected to entertain readers and to provide information about and promote the Sport, the Team, and the Team's players. The Publication has a regular editorial staff that is listed on the Publication's "masthead". The Publication solicits feature stories and articles from sportswriters and also accepts unsolicited manuscripts for publication. All writers are paid a negotiated fee for their work.
A typical issue of the Publication includes a table of contents, "feature" articles, shorter story items, a multitude of high-quality color and black-and-white pictures and illustrations, and advertisements. Typically, the "feature" articles are longer and are about particular players, managers, coaches, whereas the shorter articles are about the visiting teams. Each issue includes the roster of that year's home Team, including the players' photographs and statistics. In 1992, each issue featured one part of a three-part article concerning a season in the Team's history. A popular, regular feature is a section that instructs a fan on how to keep score during each game. Another regular feature provides updates on the activities of former Team stars.
Discussion
Massachusetts General Laws Chapter 64H imposes a five percent sales tax on all retail sales in Massachusetts of tangible personal property, unless otherwise exempt. See G.L. c. 64H, § 2. Exempt from sales tax are, inter alia, sales of newspapers and magazines. See G.L. c. 64H, § 6(m). No claim is made that the Publication is a newspaper. Thus, we consider only the question of whether it is a magazine for purposes of the sales tax.
The term "magazine" is not defined by Massachusetts tax statutes or regulations. In the absence of such a definition, the Massachusetts Supreme Judicial Court, Appellate Tax Board and the Commissioner have considered the format, content, and authorship of various publications in determining whether they qualify for the exemption as newspapers or magazines. See e.g., Greenfield Town Crier v. Commissioner of Revenue, 385 Mass. 692, 696 (1982), Robert Welch, Inc. v. State Tax Commission, A.T.B. Docket No. 79965 (1977); Letter Ruling 91-5, 90-3, 85-58, 83-14, 81-95.
The Supreme Judicial Court has noted that "[c]ourts generally have defined magazines as a subspecies of periodicals, emphasizing their periodicity, their continuity as to title and nature of contents from issue to issue, and their authorship usually by an editorial staff rather than by a single author." Comm. v. Zone Book, Inc., 372 Mass. 366 (1977), citing Fifield v. American Auto Ass'n, 262 F. Supp. 253, 255-257 (D. Mont. 1967).
In Welch, supra, the Appellate Tax Board stated that determining whether a 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 of characteristics." 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 (1986), citing G.L. c. 4, § 6. In that case, the Board noted that the term "magazine" has been defined as "a publication usually with a paperback, and sometimes illustrated, that appears at regular intervals and contains stories, articles, etc. by various writers, and usually advertisements." Id. (quoting Webster's New World Dictionary, Second College Edition (1972)).
The Commissioner of Revenue has ruled on several requests that have examined the content, format, and authorship of various publications to determine whether they qualify as a newspaper or magazine, for sales and use tax purposes. The Commissioner has ruled that a magazine, like a newspaper, must contain news and matters of interest to a significant segment of the public. See Letter Ruling 85-58, 84-67, 84-8. Additionally, the Commissioner has ruled that according to the common and approved usage of the language, a publication must contain stories, articles, or other features in addition to advertising in order to qualify as a magazine. See DOR Directive 87-6. The Commissioner has also ruled that a publication that primarily contains reference information, designed for repeated use over a period of time and presumably of more than passing value, is not a "magazine" within the meaning of G.L. c. 64H, § 6(m). See Letter Ruling 91-5 and 84-8. The Commissioner has also indicated that the buyer's basic purpose and the periodic publication format are other relevant criteria in determining whether a particular transaction is exempt under G.L. c. 64H, § 6(m). See, e.g. Letter Ruling 84-8, citing Greenfield Town Crier v. Commissioner of Revenue, 385 Mass. 692, 696 (1982); Houghton Mifflin Company v. State Tax Commission, 373 Mass. 727, 774 (1977).
Using the general principles enunciated by the Supreme Judicial Court, the Appellate Tax Board, and the Commissioner in previous Department of Revenue public written statements, we note that the Publication at issue exhibits characteristics commonly attributed to magazines. First, the outside cover format resembles that of other publications generally recognized as magazines insofar as it has an illustrated, full-color, soft cover similar in size to many magazines. Second, it appears to have continuity of title and general nature of content from issue to issue. Third, each edition contains a number of stories, articles or other features that distinguish magazines from other types of publications. Fourth, the Publication is published at regular intervals four times a year. Finally, the Publication is available and is sold by subscription, as well as by retail outlets.
Conclusion
For all of these reasons, we conclude that the publication constitutes a "magazine" within the meaning of G.L. c. 64H, § 6(m). Therefore, sales of the Publication are not subject to tax.
Very truly yours,
Mitchell Adams
Commissioner of Revenue
August 10, 1993
LR 93-13