NYS Media Tax Break Quietly Passed

 

This new law applies to the sale or use of electronic news services and electronic periodicals occurring on and after March 1, 2012.

 

In the case of electronic news services, the service must be sold at or below a "cap amount" to qualify for the exemption. This is defined as 300 percent of the annualized average daily newsstand price of the three newspapers with the largest total paid national daily circulation.

 

The cap amount used for purposes of sales or uses of an electronic news service that occur from March 1, 2012, to May 31, 2012, is based on the newsstand prices that were in effect for the period October 1, 2011, to October 7, 2011. This cap amount is $2,034. The cap amount for sales or uses that occur after May 31 will be posted closer to the due date on the Tax Department’s website.

 

Most of the seven-page memo is devoted to defining what is and is not an electronic news service or electronic periodical. For example, to be eligible for the exemption, a publication may not be in whole or in substantial part a listing, catalog, database or compilation. Those planning to take advantage of the exemption are well-advised to read the memo in detail as well as the multiple examples provided.

 

The bills had the support of the Business Council of New York State, which says it serves "as an advocate for employers in the state political and policy-making arena." In a statement, the Business Council said this law would give "electronic versions of newspapers and magazines the same tax exempt status as their paper version, while providing their publishers flexibility to provide new or modified content in electronic versions of papers and periodicals… Extending the current sales tax exemption to e-versions of these publications supports the underlying intent of the tax exemption—to exempt news sources from the state sales tax."

 

Suzanne M. Jensen, who has served on the NYSSCPA board and multiple committees, is the Council's chief financial officer.

 

Although the tax savings may be significant, the new law is not widely known. Even several CPAs within publishing community said they were not aware of it. The prominent legislators who sponsored the bills in their respective houses—State Senator John A. DeFrancisco and Assemblyman Herman D. Farrell Jr.—scarcely mentioned the bills on their websites.