Dept. of Revenue v. GREAT WESTERN PUB.

Decision Date23 September 1999
Docket NumberNo. 1 CA-TX 98-0019.,1 CA-TX 98-0019.
Citation197 Ariz. 72,3 P.3d 992
PartiesThe ARIZONA DEPARTMENT OF REVENUE, Plaintiff-Appellee, v. GREAT WESTERN PUBLISHING, INC., Defendant-Appellant.
CourtArizona Court of Appeals

Janet A. Napolitano, The Attorney General by Sara D. Branscum Assistant Attorney General, Phoenix, for Plaintiff-Appellee.

Mariscal, Weeks, Mcintyre & Friedlander, P.A. by Brian M. Mueller, Phoenix, for Defendant-Appellant.


BERCH, Judge.

¶ 1 This appeal raises the question whether The Valley Classifieds, a weekly publication consisting almost entirely of classified and paid display advertising, qualifies as a "newspaper" for purposes of an Arizona tax statute. We conclude that it does not and affirm the judgment of the tax court.


¶ 2 Appellant Great Western Publishing prints The Valley Classifieds. Designed primarily as an advertising publication that is distributed free of charge to consumers, The Valley Classifieds is printed on newsprint and published weekly in four editions. The publication has an average readership of 200,000 and a repeat readership of approximately 140,000.

¶ 3 Although display and classified advertisements comprise the vast majority of each issue, approximately 10% of The Valley Classifieds consists of a masthead that identifies the publisher and its staff, television listings, word puzzles, public service telephone numbers, weather reports, unpaid reviews of restaurants written by restaurant personnel, movie listings, auction and sale notices, calendars of community and sporting events, occasional articles about health care (primarily in the Spanish language edition), and legal notices. The Valley Classifieds does not contain editorials, reports on current events, or general news articles.

¶ 4 From October 1989 through September 1993, Great Western collected $174,564.77 in job-printing transaction privilege taxes and remitted the taxes to the Arizona Department of Revenue ("ADOR"). Great Western then sought a refund of those taxes, arguing that its earnings from printing The Valley Classifieds were deductible from its tax base under A.R.S. section 42-1310.06(B)(1)(b) (1991 and Supp.1998)1 because the publication was a "newspaper." ADOR denied the request. After Great Western prevailed before the State Board of Tax Appeals, ADOR appealed to the tax court.

¶ 5 Both parties moved for summary judgment in the tax court. In granting ADOR's motion and denying Great Western's motion, the tax court held that (1) The Valley Classifieds was not a "newspaper" and therefore was not entitled to the statutory deduction, and (2) precluding The Valley Classifieds from claiming the exemption did not constitute content-based discrimination that would violate the First Amendment. Great Western appealed. We have jurisdiction under A.R.S. section 12-2101(B) (1994).

A. Valley Classifieds' Status as a Newspaper

¶ 6 Great Western argues that the tax court erred in holding that The Valley Classifieds was not a "newspaper" for purposes of section 42-1310.06(B)(1)(b). Great Western points out that several qualities of The Valley Classifieds— for example, newsprint, classified ads, movie listings, and a calendar of local events—were typical of features found in a "newspaper."

¶ 7 In determining that The Valley Classifieds did not qualify for the newspaper exemption, ADOR applied the following definition of "newspaper": "[A] paper that is printed and distributed daily, weekly, or at some other regular and usually short interval and that contains news, articles of opinion (as editorials), features, advertising, or other matter regarded as of current interest." Arizona Transaction Privilege Tax Ruling TPR 93-29, Ariz. Tax Rptr. 300-051 (May 10, 1993) (quoting Webster's Third New International Dictionary 1524 (G. & C. Merriam Co.1971)). Great Western asserts that ADOR may not "narrow" the reach of section 42-1310.06(B)(1)(b) by adopting its own definition of "newspaper." Ordinarily, however, we defer and give great weight to an agency's interpretation of a statute it is charged with implementing or enforcing unless we conclude that the legislature intended a different interpretation. See U.S. Parking Systems v. City of Phoenix, 160 Ariz. 210, 211, 772 P.2d 33, 34 (App.1989)

; accord Maryland Pennysaver Group, Inc. v. Comptroller of the Treasury, 323 Md. 697, 594 A.2d 1142, 1146-47 (1991). We do not conclude that a different interpretation was intended in this case.

¶ 8 As with all statutes, we must interpret section 42-1310.06(B)(1)(b) to give effect to the legislature's intent. See State v. Korzep, 165 Ariz. 490, 493, 799 P.2d 831, 834 (1990)

; Martin v. Martin, 156 Ariz. 452, 457, 752 P.2d 1038, 1043 (1988). In the usual case, we look first to the statute itself to determine its meaning. See Rio Rico Properties, Inc., v. Santa Cruz County, 172 Ariz. 80, 89, 834 P.2d 166, 175 (Tax 1992). But nowhere is "newspaper" defined in the Arizona tax statutes. Absent a statutory definition, we must construe the statute according to the "common and approved use of the language." A.R.S. § 1-213 (1995); see also Wells Fargo Credit Corp. v. Tolliver, 183 Ariz. 343, 345, 903 P.2d 1101, 1103 (App.1995) (statutory language is the best indicator of legislative intent and we will give terms "their ordinary meanings"). To verify our perception of the "common and approved" meaning of statutory terms, we may—as did ADOR—resort to well-known, authoritative dictionaries of English. See, e.g., Ruiz v. Hull, 191 Ariz. 441, 450, 957 P.2d 984, 993 (1998); City of Glendale v. Aldabbagh, 189 Ariz. 140, 142, 939 P.2d 418, 420 (1997).

¶ 9 Webster's defines "newspaper" as a "publication, usu[ally] issued daily or weekly and containing news, comment, features, and advertising." Random House Webster's College Dictionary 882 (2d ed.1997). "News" is defined as "a report of a recent event; information. . . ." Id. Applying these definitions, we conclude that The Valley Classifieds was not a "newspaper" for the simple reason that it did not contain several key factors of a "newspaper," such as news and editorials.

¶ 10 Great Western argues that its advertisements, by themselves, convey "news" because they provide information on matters of public interest. As significant in our society as classified ads may be, however, they do not convey editorial opinions or reports of recent events, and, therefore, do not convey "news" as that term is commonly understood. By holding as we do, we make no value judgment as to the social utility of classified and display advertising; rather, we hold only that a publication that has as its fundamental purpose the distribution of advertisements to the public does not constitute a "newspaper" as that term is commonly understood.

¶ 11 Other courts have reached the same conclusion on similar facts. See, e.g., Gallacher v. Commissioner of Revenue Servs., 221 Conn. 166, 602 A.2d 996, 1002 (1992)

("TV Facts," which contained "no articles of opinion, such as editorials, advocates no opinions, and does not carry items of general news interest" is not a "newspaper," even though it contained a gossip column, TV program listings, astrology column, and crossword puzzle); Maryland Pennysaver Group, 594 A.2d at 1146 ("In common and ordinary parlance the term `newspaper' does not conjure the image of a pennysaver."); Department of Revenue v. Shop, 383 So.2d 678, 680-81 (Fla.App.1980) (advertising weekly with 85% advertising and 15% local news, recipes, horoscopes, and calendars was not a "newspaper"); G & B Publ'g Co. v. Department of Taxation & Fin., Sales Tax Bureau, 57 A.D.2d 18, 392 N.Y.S.2d 938, 939-40 (1977) (advertising weekly was not "newspaper" because it rarely contained reports of current events or issues of general interest and never contained articles of opinion).

¶ 12 In Gallacher, the Connecticut Supreme Court considered whether a publication entitled TV Facts— which consisted of television listings, puzzles, and advertisements, but no editorials or news—was entitled to the Connecticut use tax exemption for "newspapers." See Gallacher, 602 A.2d at 998

. The court held that it was not:

[N]ot surprisingly, the cases and authorities generally indicate that news is commonly thought to be a necessary component of a newspaper. . . . Other courts confronted with the question,"What is a newspaper?" have formulated comparable common sense answers. "[P]ublications and pennysavers such as the petitioner's which do not contain news articles or expressions of opinion are generally not newspapers within the meaning of the Tax Law."

Id. at 1001 (quoting Scotsmen Press v. Tax Appeals Tribunal, 165 A.D.2d 630, 634, 569 N.Y.S.2d 991, 993 (1991)). We concur with this assessment.

¶ 13 The cases upon which Great Western relies are distinguishable, unpersuasive, or both. Some contain no analysis of what "news," if any, a newspaper must contain. See, e.g., Hadwen, Inc. v. Department of Taxes, 139 Vt. 37, 422 A.2d 255 (1980)

(declining to "adopt a definition of `newspaper' publications based upon their content"). Others simply involve different facts. See, e.g., Greenfield Town Crier, Inc. v. Commissioner of Revenue, 385 Mass. 692, 433 N.E.2d 898, 901 (1982) (publication held to be a "newspaper" because approximately twelve percent of print space was devoted to news and columns of interest, and it was distributed at regular intervals). Still others decided only that advertising inserts were "parts" of "newspapers" for purposes of sales or use tax exemptions, a matter not at issue in this case. See Appeal of K-Mart Corp., 238 Kan. 393, 710 P.2d 1304, 1310 (1985); Eagerton v. Dixie Color Printing Corp., 421 So.2d 1251, 1254 (Ala.1982); Sears, Roebuck & Co. v. State Tax Comm'n, 370 Mass. 127, 345 N.E.2d 893, 896 (1976); Indiana Dep't of State Revenue v. L.S. Ayres & Co., 486 N.E.2d 563, 564-65 (Ind.App.1985); Laneco, Inc. v. Commonwealth, 103...

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