Oklahoma Newspaper Industry Defends Tax-Exempt Status
Carter, M Scott, THE JOURNAL RECORD
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 said.
Wilson countered that the state owes teachers about $17 million in past-due National Board Certification stipends. …