701—231.1 (423) Newspapers, free newspapers and shoppers’ guides.
	 231.1(1) In general. The sales price from the sales of newspapers, free newspapers, and shoppers’ guides is exempt from tax. The sales price from the sales of magazines, newsletters, and other periodicals which are not newspapers is taxable. Cases decided by the United States Supreme Court and the Supreme Court of Iowa prohibit exempting from taxation the sale of any periodical if that exemption from taxation is based solely upon the contents of that periodical. See Arkansas Writers’ Project, Inc.	v.	Ragland, 481 U.S. 221, 107 S.Ct.	1722, 95 L.Ed.2d 209 (1987) and Hearst v.	Iowa Department of Revenue & Finance, 461 N.W.2d 295 (Iowa 1990).
	 231.1(2) General characteristics of a newspaper. “Newspaper” is a term with a common definition. A “newspaper” is a periodical, published at short, stated, and regular intervals, usually daily or weekly. It is printed on newsprint with news ink. The format of a newspaper is that of sheets folded loosely together without stapling. A newspaper is admitted to the U.S. mails as second-class material. Other frequent characteristics of newspapers are the following:
	  a.   	 Newspapers usually contain photographs.
	  b.   	 Information printed on newspapers is usually contained in columns on the newspaper pages.
	  c.   	 The larger the cross section of the population which reads a periodical in the area where the periodical circulates, the more likely it is that the department will consider that periodical to be a “newspaper.”
	 231.1(3) Characteristics of newspaper publishing companies. Often, companies publishing larger newspapers will subscribe to various syndicates or wire services. A larger newspaper will employ a general editor and a number of subordinate editors as well, for example, sports and lifestyle editors; business, local, agricultural, national, and world news editors; and editorial page editors. A larger newspaper will also employ a variety of reporters and staff writers. Smaller newspapers may or may not have these characteristics or may consolidate these functions.
	 231.1(4) Characteristics which distinguish a newsletter from a newspaper. A “newsletter” is generally distributed to members or employees of a single organization and not usually to a large cross section of the general public. It is often published at irregular intervals by a volunteer, rather than by a paid individual who usually publishes a newspaper. A newsletter is often printed on sheets which are held together at one point only by a staple, rather than folded together.
This rule is intended to implement 2005 Iowa Code subsection 423.3(54).