Lawmakers are considering repealing newspapers’ 90-year-old sales-and-use tax exemption, which has applied as long as the state’s sales tax has existed.
The push to eliminate the long-standing tax exemption comes as newspapers in the Buckeye State and nationwide have struggled financially. Ohio has lost dozens of newspapers recently, including The Columbus Dispatch’s 2023 announcement that it would shutter ThisWeek Community News, its string of weekly newspapers.
“We are concerned to see language in the substitute bill that repeals a nearly century-old exemption to the sales tax for newspaper subscriptions,” Ohio News Media Association President and Executive Director Monica Nieporte said in prepared testimony to the Senate Finance Committee. “We are also worried about the impact of other sales tax changes that could add cost for businesses seeking to advertise with media outlets across the state.”
“This change would hurt Ohio businesses and reduce access to important news in communities across our state,” Nieporte added.
In an editorial, The Star Beacon of Ashtabula said the proposal is “a mistake that will add another barrier between Ohio residents and the news.”
“In the current times of constantly increasing prices, budgets are tight for everyone,” the newspaper said in its editorial. “While adding a few pennies to the cost of a newspaper may not sound like much for folks in Columbus, for people who are struggling, it can be the difference between buying a paper and not.
“For an annual subscription to the Star Beacon, the Ohio Senate’s proposal would equate to a $24.09 tax hike on our subscribers,” the newspaper added. “It would increase the cost for those who purchase single copies of the Star Beacon by between 13 and 20 cents per paper.”
If the conference committee proceeds with eliminating the newspaper tax exemption, the state is unlikely to earn a large profit.
“What may appear to be a minor fiscal gain for the state could have a disproportionate and damaging impact on the availability of local news and the small businesses that depend on it,” The Plain Dealer and Cleveland.com quoted America’s Newspapers CEO Dean Ridings as saying.
The Senate passed its version of the state’s two-year spending plan 23-10. Republican Gov. Mike DeWine must sign the budget by June 30.
According to the Tax Policy Center, “no state levies a general sales tax on the purchase of newspapers, though Delaware, New Mexico, and Washington levy a gross receipts tax on the publishers.”
“Tax breaks for struggling local newspapers may not be the type of discriminatory tax treatment rejected by the Supreme Court, but they do raise the question: Is it good for democracy and its free press if local newspapers and journalists receive financial assistance from the government they are mission-bound to cover independently?” the Tax Policy Center posited in its analysis.
While states have avoided taxing the purchase of newspapers, there is apparently no legal reason lawmakers cannot levy such a tax. Court cases have confirmed that newspapers are not immune from regular taxation; however, the Tax Policy Center found that they cannot be subjected to “discriminatory taxation. "
“Charging sales tax on newspapers for the first time in the 90-year history of the state’s sales tax will amount to a tax increase on consumers and a price increase on our product,” The Star Beacon said in its editorial.
“This follows a change to state law at the start of the year, eliminating some requirements for townships and counties to publish public notices in local newspapers,” the newspaper added. “Whether these changes are incidental or intentional, the result is the same: Placing obstructions between Ohioans and important information about their communities.”
