Grassroots Lobbying Kit

Talking Points: Circulation Tax

A circulation tax on newspapers is a bad idea whose time should never come. Such a tax would essentially be a levy on the free flow of information in our society, and is therefore contrary to the public interest.

To require newspapers to pay a tax for distribution of its product would also be discriminatory since radio, television, direct mail and free newspapers would not be subject to the tax.

Additionally, the revenue raised by a tax on circulation would be relatively small compared with total state revenues, and it would create an administrative nightmare. It would, for example, require thousands of newspaper carriers, including young boys and girls, to become state tax collectors with the attendant sales accounting and reporting responsibilities.

A substantial portion of many daily newspapers' circulation is based on newsbox sales. It would be difficult, if not impossible, to adjust coin boxes to collect the tax. Consequently, newspapers would have to "eat" the tax.

Furthermore, adding 6 to 7 percent to the cost of a newspaper would discourage maintaining and extending newspaper circulation. That could hurt the overall economy by diminishing distribution of advertising.

In particular, fewer newspapers in circulation would hurt retail merchants who rely heavily on newspapers to get their messages out to potential customers.

Thirty-six states currently exempt circulation from sales taxes. Iowa should remain among them.