Taxing Newspaper Advertising Supplements: A Study of State Trends

Abstract

This study compares 21 states that allow advertising supplements to be taxed with some states that do not. Based primarily on legal sources, the study finds that states normally consider such factors as where the supplement is published and whether it is called a “supplement,” or readers would miss it, or is indexed, or is under control of the newspaper. States that do not allow taxing generally rule the supplements are part of the newspaper, while taxing states do not. The study argues this area may become more important in an era of declining government revenues, but the study does not find a national trend toward supplement taxation.