The BTC felt that assigning an exempt percentage, in lieu of vendor allocation, would remove the challenge faced by vendors. Initially, it proposed an exemption for 38% of the lump-sum charge. The BTC came to this conclusion based on data provided by a retailer, who previously requested guidance from the Board of Equalization's legal department on a similar issue. The BTC released its proposed changes to interested parties, who agreed with the streamlined approach but disagreed with the percentage. During the course of this process, different percentages were proposed and discarded by the BTC. At one point, the California Newspaper Publishers Association (CNPA) provided the BTC with a survey of 27 newspapers, which showed nontaxable percentages ranging from 44% to 63% and had an overall unweighted average nontaxable percentage of 53%. Ultimately, the BTC decided to adopt the unweighted average, and Regulation 1590 was amended to reflect that as of October 1, 2016. A rebuttable presumption exists that 53% of the lump-sum charge for printed and digital newspaper content is not subject to tax when bundled as a single transaction.
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