Are Newspapers Pocketing Illegal Taxes?

Have you checked a recent invoice on your subscription to the Miami Herald and the Sun-Sentinel? If not, you should. South Florida's two major dailies are among nine Florida newspapers collecting and pocketing sales tax monies on the cost of delivering fish-wrap to your doorstep -- even though they are not supposed to -- according to intrepid newspaper subscriber Jay Schiller.

Since 1994 the state has exempted newspaper companies from charging sales tax for delivery. Schiller claims that over the past six years newspapers have collected upwards of $30 million in sales tax not reported to the state's Department of Revenue.

For the past eight months, Schiller has been hammering the department's legal eagles to investigate his claim and make the newspapers return the money to the state. "What I verified in less than a week is taking the state almost a year to do," Schiller seethes. "They've just been dicking around."

According to recent e-mails received by Schiller from state revenue attorneys George Hamm and Bruce Hoffman, the department is still investigating his complaint and they will contact him once they have concluded their inquiry. "These are carefully worded and polite e-mails that are intended to blow me off," Schiller complains. Hamm declined to comment to New Times, citing taxpayer confidentiality.

It is not that hard to figure out if the Miami Herald Media Co. is collecting sales tax on delivery charges. New Times contacted the newspaper's customer service line to inquire about its $110.17 bill for a 26 week subscription to the Herald and El Nuevo Herald. We asked the sales representative how much we were being charged before sales tax was calculated into the final bill. The response: $102.96, including carrier services, delivery charges, and the cost of newsprint. Multiply that by seven percent sales tax collected in Miami-Dade and you get $7.21 (adding up to that $110.17). According to the newspaper's September 2006 ABC Publisher Statement, a basic six month subscription without delivery and carrier charges is $85.80.

Despite our findings, Miami Herald Media Co. spokeswoman Ivette Diaz denied the company is collecting the unauthorized sales tax vig. She insisted the delivery charges are clearly indicated on each bill, even though it was not listed on ours. "The Miami Herald collects state and county tax on only the non-delivery charge portion of the subscription price, consistent with what gets remitted to the government," Diaz said.

Schiller also claimed the Sun-Sentinel was another culprit. But the newspaper adjusted its subscription rates around the same time Schiller was demanding the Department of Revenue investigate his charges, making it difficult to track the amount being taxed, he says. "They're doing this to erase the trail," Schiller says.

Sun-Sentinel spokesman Kevin Courtney did not return phone calls seeking comment. --Francisco Alvarado

KEEP MIAMI NEW TIMES FREE... Since we started Miami New Times, it has been defined as the free, independent voice of Miami, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Frank Houston