No one familiar with California's sales tax believes it is a model of rational policy, but the state's sales tax policy as applied to the newspaper industry is indefensible. The Legislature should repeal the tax and reinstate the exemption California newspaper readers enjoyed for 46 years.

Faced in 1991 with a $14.5 billion deficit, the Legislature and Governor Pete Wilson struggled with options to cut government programs and to increase revenue. They targeted several long-standing sales tax exemptions, including newspapers and magazines, candy, snacks, bottled water and stored fuel. On July 15, 1991, California newspaper readers, for the first time in history, paid tax on their information.

But since 1991, every repealed exemption has been reinstated, except a tax on certain stored fuel and on a minority of newspapers.

Soon after enacting a tax on newspapers, the Legislature realized problems associated with taxing the distribution of information. Before the 1991 session ended, the Legislature reinstated an exemption for hundreds of freely distributed newspapers.

In 1993, magazine publishers successfully argued that their subscription sales should be exempt. The tax placed California publishers at a competitive disadvantage with out-of-state publishers. Because the characteristics of weekly newspapers track very closely to magazines, the new law also exempted most weekly newspapers. By 1994, for solid public policy reasons, the vast majority of newspapers and magazines were again exempt from sales tax.

Now the tax is paid by only about 105 daily newspapers and a handful of weeklies that distribute more than 60 times a year. They constitute less than 25 percent of the more than 500 members of the California Newspaper Publishers Association, which is sponsoring legislation - AB 1608 by Assemblyman Curt Pringle and AB 2081 by Assembly Speaker Antonio Villaraigosa - to reinstate the exemption for the newspapers that continue to pay this unfair and discriminatory tax.

All media compete for the public's attention and a limited pool of advertising revenue - the lifeblood of a newspaper. It is unfair to tax some competitors within the newspaper industry while exempting others. Unfairness extends well beyond competition between newspapers; it is doubly unfair because no sales tax is collected on television, radio, junk mail, the Internet or yellow pages, even though all of these industries compete with taxed newspapers for limited advertising revenue.

President Clinton, Congress and the California Legislature are all favorably considering a "no tax" approach to the Internet so as not to harm its potential growth. This tax policy is expressly created to assist a particular industry that is challenging traditional printed newspapers for readers' attention. The tax on newspapers is even more prejudicial considering this new competitive marketplace for readers and advertisers.

Beyond fairness, equity and competition, strong public policy reasons should compel the Legislature to reinstate the tax exemption. It is essentially a tax on information rather than a tax on a product. Ideas should not be taxed.

Newspapers remain the best medium for advancing the benefits and responsibilities of citizenship, democracy, literacy and freedom. The state's tax policy impedes information necessary for citizens to become literate, well-informed voters.

The supreme irony is that the state's tax policy appears to place a higher value on exempt junk mail than on taxed newspapers. With the state appearing to be in its best financial condition in decades, the Legislature should again exempt from sales tax the daily information essential to self-government.

Thomas W. Newton is the general counsel and legislative advocate for the California Newspaper Publishers Association.