Lou's Commentary
September 2009
Publishers Beware: States are Hungry for Tax Revenues
Friday, September 18th, 2009
State governments whose revenues are dramatically lower because of the recession and are required to balance their budgets are reluctant to cut spending. Thus, state tax authorities are looking everywhere for additional revenue and turning their collections people loose on easy targets.
Who might be an easy target? Could be out-of-state publishers that do business within that state. State authorities might look at whether or not the “foreign” seller of a product has been collecting taxes on sales made within their state and whether the seller has been paying state income taxes.
Out-of-state publishers usually feel protected because they don’t believe they are required to collect taxes and where they don’t have any physical location or employees in-state, they believe that they are exempt from state income taxes. But in one instance that was recently shared by someone, aggressive state tax authorities came up with novel interpretations of what it means to have “nexus” in a state and therefore to be subject to taxation. A publisher who distributes data via CD’s mailed to customers in other states got caught up in just such a mess. It took thousands of dollars and countless hours of staff time to fight this in just one state!
Another area to watch is states that determine state tax liability where a publisher has hired a collection firm to dun overdue accounts. And who hasn’t done this? The collection agency is considered an agent of the seller which, through creative interpretation, mean that the foreign company has a location in that state.
Last? There is no statute of limitations on back tax liability.
Talk to your lawyers and review your situation.
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Follow the Leaders; Print Brands That Value Digital
Wednesday, September 2nd, 2009
Don’t miss the recent announcement by the Magazine Publishers of America [MPA] a couple weeks ago, http://www.magazine.org/ditital/14321.aspx, wherein they detail their members’ digital initiatives for all of 2009. These examples are great reading and hopefully provide incentive for other publishers to serve their audience with more offerings. While not referenced, these actions represent a wide range of financial investment.
Look at the titles. I don’t call them leaders because they are members of MPA. They are leaders in their respective fields and the point should not be missed that the leaders continue to evolve, step out, and experiment with digital tools and resources.
Here are my TOP Ten 2009 magazine digital initiatives:
1. More Magazine responded quickly to digital sub request from outer space and launched a blog
2. People en Espanol’s virtual makeover tour that drew 60 million visitors!
3. Women’s Health iPhone pre-loaded workouts
4. Scroll Motion’s iPhone app work with distribution and revenue models
5. Martha Stewart’s Martha University online
6. National Geographic’s Web site user generated content print pub: Your Shot
7. Sports Illustrated’s Web site relaunch: user friendly just got friendlier
8. Zinio’s partnership with hotels; guests can read digital magazines in room
9. This Old House June issue - all user generated from a community Web site
10. ESPN begins to charge for online content.
It is my hope that many of you will step out and follow the leaders.
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