Blogs

Search Blogs
Search by date
Choose From Date
Choose To Date
SearchClear

More News is Bad News for Publisher in Vermont: Newspaper Coupon Books Not Exempt from Sales and Use Tax

By Scott Booth and Prentiss Willson

The Vermont Supreme Court held that coupon books distributed monthly, within a free weekly newspaper and also separately

March 15, 2013

By Scott Booth and Prentiss Willson

The Vermont Supreme Court held that coupon books distributed monthly, within a free weekly newspaper and also separately distributed on news racks, were not “component parts” of the newspaper, and thus were not exempt from Vermont sales and use tax as newspapers. Vermont exempts newspapers and tangible personal property that becomes an ingredient or “component part” of the newspaper from the sales and use tax. While “component part” is not defined in the sales and use tax law, the Commissioner of Taxes relied heavily on Hannaford Bros. Co. v. Dep’t of Taxes, 547 A.2d 1353-55 (Vt. 1988), which held that preprinted advertising supplements, inserted into newspapers to advertise the products and prices of a third-party grocery chain, were not integral components of the newspapers. Noting that the coupons would not be taxable if included in the pages of the newspaper itself, the Commissioner concluded that “the taxpayer’s choice of format and method of distribution results in a taxable event.” Further, because the coupon books did not include any news content, did not typically command their own following, and were not separately indexed sections of the newspaper, the Commissioner concluded they were not component parts of the newspaper. The Vermont Supreme Court deferred to the Commissioner’s decision, finding no “compelling indication of error” in the decision. Vermont joins the growing list of states narrowly construing their sales tax exemptions and giving significant deference to the state tax agency’s findings given the “experience and expertise of the agency.” World Publications, Inc. v. Vermont Dep’t of Taxes, 2012 Vt. 78 (Nov. 2, 2012).

Our Story

Sutherland Asbill & Brennan LLP is an international law firm helping the Fortune 100, industry leaders, sector innovators and business entrepreneurs solve their biggest challenges and reach their business goals. Dedicated to unfaltering excellence in client service, we are known for our business savvy and industry intelligence, providing creative and custom solutions for each of our clients. Industry and business experience makes the difference for our clients.

click to watch Videocast: Sutherland SALT Scoreboard – 2nd Quarter Highlights
Videocast: Sutherland SALT Scoreboard – 2nd Quarter Highlights
Washington, DC
Elizabeth S. Cha, Associate
Washington, DC
© 2016 Sutherland Asbill & Brennan LLP / Sutherland (Europe) LLP
MYBRIEFCASE
Add this page to MYBRIEFCASE
Add Page to MYBRIEFCASE
News/Commentary - More News is Bad News for Publisher in Vermont: Newspaper Coupon Books Not Exempt from Sales and Use Tax
Current MYBRIEFCASE Pages
Save ChangesDownload MYBRIEFCASEClear All