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]
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

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).