A reader asks this interesting question:
I’ve thought that newspapers at the retail store level were exempt from our excise tax because of federal statute that blocks certain sales taxes, i.e. “Newspapers and magazines are exempt from sales tax as are legal tender.”
I don’t pay any excise tax when I buy a New York Times or Wall Street Journal at any supermarket or even Stanley’s Convenience Store. But Barnes & Noble charges me the 4.5 percent.
So who’s right? Perhaps one of your readers knows.
If you have an answer, please leave a comment below.
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When working an odd shift for a couple of weeks I stopped to get papers @ 7-Eleven – was never charged tax. Ditto when I occasionally picked up a paper now and then @ Safeway. Did you inquire @ Barnes & Noble?
I wouldn’t be surprised if B&N corporate doesn’t figure state rules when sending stuff out to the outlying stores. They probably don’t know.
My understanding is that newspapers are not subject to retail excise tax in Hawai‘i, and search of the code reveals that newspapers are excluded from the definition of “property” under Chapter 237 , the part of the code dealing with excise tax.
Not all retailers are aware of this, which explains the various ways they handle it.
The Hawaii Excise Tax is not a sales tax. It is a tax on the gross income of the seller which is why most businesses on Oahu end up charging 4.712% instead of 4.5% because they’re being charged 4.5% on the total amount which, as far as the State is concerned, includes the “tax”. When one sells to the federal government one can’t show tax as a separate item (“the power to tax is the power to destroy” from a Supreme Court case establishing Federal primacy), but the State still wants its share of the gross revenue from the sale. I’m assuming that the State is similarly efficient in wanting its share from the sale of newspapers, etc.
Barnes & Noble’s clerk claims they checked with the State Tax Office were were told “yes” on the excise tax. But that seems to run counter to both state and federal law unless there’s something new we don’t know about.
The answer is that the general excise tax is imposed on the retailer, not the newspaper publisher. When the retailer passes along the GET to the customer, it is simply passing its taxes along as a cost of the item to the consumer. Wailau is right, the excise tax is not a sales tax which is imposed on the consumer of the item but collected by the seller and remitted to the State
Pali Safeway charged tax every day for the S-B
The super Safeway on Kapahulu always charges me tax when I purchase the Star-Advertiser. Same with ABC stores. I don’t remember this always being the case. Before the switch I could avoid standing in line to make a purchase and just drop three quarters on the counter for the cashier and run off. I was really caught off-guard when the cashier told me my paper would be 79 cents. But the same paper costs 75 cents from the machine. Go figure!
Right? Just the yesterday charged 2.15, today 2.50 last week 2.68!!! Go figure??????
A reader just commented via email:
“At the Kapahulu Safeway today I noted on the news rack a sign saying all papers were subject to tax.”
I know that at LA airport, they didn’t charge a tax but now they do.
Newspapers are vehicles for public information and culture and should not be subject to sales tax.
I recently purchased a Sunday edition of the New Orleans Times-Picayune. The price of the paper is $2.50 plus a 3 pct. sales tax imposed by the State. I was charged $2.75, so I wonder who gets the other 7 pct. the vendor claimed is also a tax. If the vendor is collecting a tax, an authority reserved for government, is that vendor stealing government funds?