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California legislators have a chance to eliminate the state’s unjust and loop-hole-ridden newspaper sales tax, if a handful of Senate leaders will let them. The long-overdue repeal of this eight-year-old "temporary" tax breezed through the General Assembly the other day by a vote of 73-5. Senate leadership, however, appears determined to avoid any similar vote in its house. "We’ve kind of always felt that if we could get to the rank and file in the Senate, repeal would pass," says Thomas W. Newton, general counsel for the California Newspaper Publishers Association (CNPA). Senate president pro tem John Burton and other leaders know that, so they are hoping to keep the bill bottled up in committee until the Legislature adjourns in August. Certainly, neither Burton nor anyone else can make a compelling argument for keeping the tax. Sixteen states impose some kind of sales tax on newspapers, but California’s is uniquely, um, Californian in making odd distinctions about what kinds of newspapers do or do not get taxed. Its very creation was an example of legislative sausagemakinq at its worst. Back in 1991, California was in a budget crisis. With the state deficit approaching $14.5 billion, legislators agreed to overturn the traditional sales tax exemptions for newspapers, magazines, bottle water, candy, and snack foods. The 8% sales tax was sold as a temporary, emergency measure to get out of a fiscal jam. As soon as it was passed, legislators began to pare away at it. Free distribution newspapers were exempted within days. The next year, most weekly newspapers -those that publish fewer than 60 times a year -were exempted, as were magazines. Since then, the sales tax has been dropped on candy, snack foods, bottled water, and, yes, bunker fuel. Who’s left About 135 daily and twice-weekly newspapers. One other thing has changed since 1991: Instead of facing a $14.5 billion deficit, California this year expect to rake in a surplus of $4 to $5 billion. Senate leaders talk as if repealing the tax amounts to giving a financial windfall to the Los Angeles Times or some other big-city paper. Well, there are perhaps 10 of those in California. "The typical paper that is paying this tax is the 6,000-circulation daily Turlock Journal or the 11,000-circulation twice-weekly Sonoma IndexTribune," CNPA’s Newton says. For these local papers, the sales tax is a real burden -especially since the Legislature in its wisdom has never taxed competing media. There is no sales tax on direct mail, yellow Pages, cable TV, radio, or the Internet. Sometimes the burden is fatal: Assemblyman Jack Scott says he was persuaded to repeal the tax after a community paper in his district folded. California’s sales tax on newspapers has done enough damage. It is time for president pro tem Burton to show some real leadership -by getting out of the way and letting state senators vote for repeal. The author mentions cable TV, radio, and the Internet to show
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