• Legal database
Legal database

Taxation Determination

TD 92/156

Income tax: do the trading stock provisions apply to newsprint held by a taxpayer carrying on a business of producing newspapers?

  • Please note that the PDF version is the authorised consolidated version of this ruling and amending notices.
    This document has changed over time. View its history.

FOI status:

may be releasedFOI number: I 1213270

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue.

[ Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]

1. Yes. Section 70-10 of the Income Tax Assessment Act 1997 (ITAA 1997)[1] defines trading stock as including anything produced, manufactured or acquired that is held for purposes of manufacture, sale or exchange in the ordinary course of a business.

2. We consider that newsprint is trading stock because it is produced, manufactured or acquired by a newspaper producer for purposes of manufacture of newspapers. This is so even if:

(a)
all revenue is gained from advertising (in the case of free newspapers); or
(b)
sales revenue from the distribution and sale of newspapers does not cover the cost of producing them.

3. Section 70-35 states that where a taxpayer carries on a business, opening and closing values of trading stock are taken into account in ascertaining the taxpayer's taxable income. Expenditure by a newspaper producer in purchasing newsprint is deductible under section 8-1 when the expenditure is incurred. However, section 70-35 applies to require the opening and closing values of newsprint to be taken into account in ascertaining the newspaper producer's taxable income. The overall effect of section 70-35 is to allow a deduction for the newsprint on a usage basis.

Commissioner of Taxation
17/09/92

Footnotes

1 All subsequent legislative references are to the ITAA 1997 unless indicated otherwise.

Previously Draft TD 92/D103

References

ATO references:
NO BANTD3

ISSN 1038 - 3158

Related Rulings/Determinations:

TD 92/155
IT 2289

Subject References:
deductions
newspaper producer
newsprint
trading stock

Legislative References:
ITAA 1997 8-1
ITAA 1997 70-10
ITAA 1997 70-35

TD 92/156 history
  Date: Version: Change:
  17 September 1992 Original ruling  
  29 November 2006 Original ruling + note Repeal provision note
You are here 23 September 2009 Consolidated ruling Addendum

Back to top