(a) A newspaper sold or distributed by individual copy or by subscription is exempted from the taxes imposed by this chapter.
(b) A transaction involving a sale of a newspaper that has been produced, fabricated, or printed to the special order of a customer is exempted from the taxes imposed by this chapter if:
(1) the customer is responsible for gathering substantially all of the information contained in the newspaper and for formulating the design, layout, and format of the newspaper; and
(2) the customer would be entitled to the exemption provided by § 151.318(t) if the customer had a printing facility capable of processing and printing the newspaper and printed and processed the newspaper.

(c) The sale of a handbill, circular, flyer, advertising supplement, or similar item that is printed to the special order of a customer and tangible personal property that will become an ingredient or component part of such item are exempted from the taxes imposed by this chapter if the item is printed for the exclusive purpose of being distributed as a part of a newspaper, is actually distributed as a part of the newspaper, and is delivered to the person who is responsible for the distribution of the newspaper in which the item is distributed and not to the customer.
(d), (e) Repealed by Acts 2001, 77th Leg., ch. 1263, Sec. 84(1), eff. October 1, 2001.
(f) In this section, “newspaper” means a publication that is printed on newsprint, the average sales price of which for each copy over a 30-day period does not exceed $3, and that is printed and distributed at a daily, weekly, or other short interval for the dissemination of news of a general character and of a general interest. “Newspaper” does not include a magazine, handbill, circular, flyer, sales catalog, or similar printed item unless the printed item is printed for distribution as a part of a newspaper and is actually distributed as a part of a newspaper. For the purposes of this section, an advertisement is news of a general character and of a general interest. Notwithstanding any other provision of this subsection, “newspaper” includes:
(1) a publication containing articles and essays of general interest by various writers and advertisements that is produced for the operator of a licensed and certified carrier of persons and distributed by the operator to its customers during their travel on the carrier; and
(2) a publication for the dissemination of news of a general character and of a general interest that is printed on newsprint and distributed to the general public free of charge at a daily, weekly, or other short interval.