California Newspapers May Get a Tax Break

 

By DeEtte L. Loeffler, J.D., L.LM, Taxation

After months of negotiations between the Board of Equalization and publishers, California has agreed to reduce the sales tax imposed on newspapers starting in October. The new regulation would give newspapers at least a 53 percent tax break on subscriptions, because the majority of newspapers today reflect digital content (which is not taxable). Newspapers were exempt from sales tax for almost 50 years until the legislature imposed in July 15, 1991 a way of addressing a budget deficit. In 2015, California collected an estimated $50 million in revenue from this tax. Californians are unlikely to see any cost savings from this change, because the savings will likely be allocated to paying off debts and rising production costs.

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