You don't have to tell newspaper publisher Rusty Ferguson that
his industry is struggling. Ferguson, the publisher of the Cleveland
American, a weekly newspaper in Pawnee County, is well-aware of the
fact that advertising sales revenue is down and more and more people
are looking to the Internet for information.
Now Ferguson is fighting another battle - taxes on newspapers.
On Jan. 10, state Sen. Jim Wilson, D-Tahlequah, announced a plan
to generate what he said was about $17 million in new tax revenue by
removing two state tax exemptions - on newspaper and periodical
sales and advertising.
In a media announcement, Wilson said Senate Bill 1098 would
create about $17 million in additional revenue that could be used to
pay an overdue $5,000 stipend to state school teachers who have
received their National Board Certification.
"The state made an agreement to pay teachers $5,000 per year if
they became Nationally Board Certified," Wilson said in his
statement. "There is an exception in the law allowing the state to
renege on its commitment if money is not available, but that
agreement is a contract and should be paid back eventually. We need
to get our priorities straight. I believe it's much more important
to keep our promises to these educators than to provide sales tax
exemptions for newspapers."
Ferguson said a new tax on already-struggling newspapers would
cause new problems and be passed on to newspaper readers.
"The small-town newspaper advertising base is struggling as it
is," he said. "Our advertising base is dwindling because retail on
Main Street is dwindling. Anything that discourages advertising just
makes it that much harder for small newspapers to survive."
Industry representatives echo Ferguson's concern. Mark Thomas,
executive vice president of the Oklahoma Press Association, said
lawmakers would encounter difficulty trying to determine which
newspaper products to exempt.
"Some newspapers are distributed free and others are paid," he
said. "If you removed the tax exemption on subscriptions, the guys
who distribute free wouldn't face any tax, but those who had paid
subscriptions would. And what do you do about people whose
subscriptions are online, on the Internet?"
Those online subscriptions, Thomas said, were already exempt from
taxes under the Streamlined Sales and Use Tax Act.
"Lawmakers don't want to be taxing speech on the Internet," he
Wilson countered that the state owes teachers about $17 million
in past-due National Board Certification stipends. …