Court Opinion

ID: 9777373
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:08:36.491043+00
Date Added: 2024-06-11T07:32:53.160176
License: Public Domain

BARDGETT, Judge,
dissenting.
I respectfully dissent.
I am uncertain that whether an advertising supplement has a “character of its own” is at all decisive of this case but, in any event, the statement to the contrary in the principal opinion is incorrect. The advertising supplements printed by petitioner which were not used in newspapers were used by the advertising customer — the merchant— as advertising pieces in the customer’s store. This was stated in oral argument, agreed to by all parties, and is not unusual. I have no doubt that an “advertising supplement” becomes an integral part of the newspaper when folded into and sold as part of the newspaper. Nevertheless, so does the ink used in printing, but the newspaper must pay sales tax when it purchases ink and some other items that go into the makeup of a newspaper.
The fact that the Daily Record is a newspaper publishing company is of no consequence in this case, and that also was stipulated during oral argument. The business transaction sought to be taxed does not even involve a newspaper; the transaction is between the merchant and a printer. For example, the merchant agrees to pay the printer $1,000 to print 10,000 advertising pieces consisting of four pages each. The printer prints them and is paid the $1,000. The question is whether the merchant is required to pay the printer the sales tax under § 144.020, and the printer required to collect it from the merchant.
There is no statute affording the foregoing transaction any exemption from the sales tax. The sale of a newspaper to a customer has been held to be not the sale of tangible personal property but rather a “service”, and therefore not a sales taxable transaction. Furthermore, the sale of newsprint used in printing newspapers is an exempt transaction under § 144.030.3(7), RSMo 1978 (now § 144.030.2(8), RSMo Cum. Supp.1981).
In the previous example if the merchant receives his 10,000 advertising pieces and distributes them or uses them in his store, the transaction is admittedly subject to the sales tax. But, if the merchant has the advertising pieces delivered to a newspaper to be sold with the paper, then the transaction between the merchant and the printer becomes nontaxable even though the newspaper is not a party to that transaction at all. Of course, the merchant will pay the newspaper for carrying his advertising, but that is not the transaction involved in this case.
I believe the Administrative Hearing Commission’s order was correct and should be affirmed. The commission’s relevant finding and conclusion are set forth on page 350 of the principal opinion. That determination exempts the value of the newsprint from the taxable sale because newsprint used in newspapers is specifically exempt from sales tax, but it requires the tax to be paid on the remaining sum due from the merchant to the printer. The taxable event was the sale between the merchant and the printer; there is no statutory exemption for that transaction. I would affirm the decision of the commission.