Media Law Prof Blog

Editor: Christine A. Corcos
Louisiana State Univ.

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Friday, October 21, 2005

Indiana Tax Court Rules Free Apartment Guides Qualify as Free Distribution Newspapers, Therefore Not Taxable

In Haas Publishing v. Indiana Department of State Revenue, the Indiana Tax Court has ruled that Haas'  publications, called Apartment Guides, and  displayed in "open racks or newspaper dispensers where members of the general public could take copies free of charge ...located in grocery stores, pharmacies, convenience and other types of stores, banks, colleges, public libraries, major local employers' facilities, airports, and on streets" are exempt from some $78,000 in tax according to Indiana Code Section 6-2.5-5-31 because they are "free distribution newspapers." The Department argued that the Guides were not "newspapers" within the commonly accepted meaning of the term, and additionally that "that the advertisers in the Apartment Guides are related, and that the Apartment Guides do not publish community notices," thus failing to meet three of the criteria required by the statute. The court examined the Department's claims carefully, pointing out first that the Department had never before required that the newspaper exemption be applied to publications meeting only that definition. It also dismissed the Department's suggestion that the Guides be considered "books", concluding that the Guides are serial in nature.

Next it considered the question of the relationship of the advertisers.  "...[T]the statute requires that the advertisers be unrelated, not that the advertising itself be unrelated.... Therefore, it is of no consequence that the advertisers in the Apartment Guides are all advertising the same good. Moreover, the other factors cited by the Department are merely a result of the Department's desperate search for any commonalities existing between the advertisers. This approach to determining whether advertisers are related is unworkable, as it would exclude from exemption any publication whose advertisers belong to a common class or group."

With regard to the matter of the publication of community notices, the court found that the Department confused the question of legal notices and community notices. "[T]here is simply nothing in either statute to indicate that the legislature intended to equate community notice with legal notice. If the legislature had intended to restrict the free distribution newspaper exemption to only those publications authorized to carry legal notice, the Court must presume that it would have said so."

Read the entire ruling here.

http://lawprofessors.typepad.com/media_law_prof_blog/2005/10/indiana_tax_cou.html

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