Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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385.0000 NEWSPAPERS AND PERIODICALS—Regulation 1590

Annotation 385.0575


385.0575 Subscription Periodicals. A magazine is published at regular intervals, 12 times a year by a for-profit organization. The magazine is provided to members of a nonprofit organization as a part of the annual membership dues. A portion of the membership dues is separately stated on each member's dues statement and allocated to the magazine. The magazine is not sold separately to members or non members. The magazine is produced and distributed by the California for-profit corporation, wholly owned by a California Nonprofit Mutual Benefit Corporation, and is provided to the members of the nonprofit mutual benefit corporation. The magazine is sent and delivered by regular U.S. mail. The publication qualifies as a "periodical". The subsidiary purchases the materials, produces the periodical and sells it to the parent who, in turn, sells it to its members. The sale of the ingredients or component parts of the periodical to the subsidiary is a sale for resale. The sale of the periodical from the subsidiary to the parent is also a sale for resale. The sale of the magazine by the parent to its members is a retail sale.

Since both the publisher's statement in the magazine and the member's statement of dues clearly state that the members pay for an annual subscription to the magazine, the sale of the magazine is by subscription. Since the magazine is delivered by mail to the members, the sale of the magazine qualifies for exemption effective November 1, 1992. 1/7/93.