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 385.0775


385.0775 Free Exchange of Advertising. A publisher, noting that the new legislation now exempts certain journals which carry no commercial advertising or which are distributed in consideration of membership fees, asks whether a "free exchange of advertising" is commercial advertising.

The specific exemption referred to applies only to distributions by organizations which qualify for tax exempt status under section 501(c)(3) of the Internal Revenue Code. It was assumed that by "free exchange of advertising", the reference was to two or more organizations publishing journals and placing advertisements in each others journals. The consideration paid by each would be the placing in its journal an advertisement for the other organizations advertisement. In the context of section 6362.8, the term commercial advertising means paid for by an advertiser. The described advertising arrangement would be commercial advertising. On the other hand, the publisher's notices in a journal concerning its own product would not be commercial advertising. 1/27/92.