Newspaper sales tax to take effect Oct. 1
Your morning coffee and newspaper are about to cost a few cents more as sales tax changes enacted by the state Legislature take effect Oct. 1.
Starting next month Maine's sales tax will increase from 5 to 5.5 percent and publications such as newspapers will lose their sales tax exemption, according to the Maine Press Association. The new tax will apply to newspaper sales at newsstands, online and through subscriptions, but will not apply to advertising.
Anthony Ronzio, Bangor Daily News Director of News and New Media and Chairman of the Maine Press Association's Legislative Committee, said publications from around the state have been working to meet the Oct. 1 deadline.
"We've been going through the process with the state for the last few months," Ronzio said. "For a lot of smaller publications it has been a question of basics."
Despite challenges posed by coordinating the process for the many different types of publications in Maine, Ronzio said, the state's newspapers are "well placed" to implement the new tax on time.
The Maine Press Association opposed the new tax; however, Ronzio said he doesn't think it will harm newspaper sales.
"We certainly hope it doesn't effect anyone's buying decision," Ronzio said. "These are dedicated readers and I think they will understand it isn't us asking them for more money, it is something we are required to do."
According to its website, the Maine Press Association, represented by Mike Mahoney of Federle Mahoney, told the Taxation and Appropriations committees in March "a new 5 percent sales tax on newspapers would be discriminatory by singling out publications, and suggested a comprehensive review of Maine’s 94 current tax exemptions. [Mahoney] also noted the logistical problems posed by collecting the tax, the fact that it would be a tax on information, and its impact on elderly, low-income and rural residents who lack Internet access."
The sales tax changes were passed June 26 along with an increase in income tax for individuals making more than $100,000 and a $75 million decrease in revenue sharing to help close the state's budget gap, according to previously published reports.
According to a study commissioned by the Maine Press Association, the state’s newspapers made more than $154 million in sales in 2010. The state estimates the tax on publications will bring in around $3 million annually.
Even with the 10-percent increase to the sales tax, Maine will still have the lowest sales tax of any New England state with the exception of New Hampshire, which does not have a sales tax.
Courier Publications Editor Dan West can be reached at 338-3333 or by email at firstname.lastname@example.org.