SEILER, Judge.
Pursuant to § 161.337, RSMo 1978,1 Daily Record Company and the Director of Revenue have both petitioned for review of a decision of the Administrative Hearing Commission. This court has jurisdiction because construction of state revenue laws, §§ 144.020.1 and 144.030.3(7) (currently codified at § 144.030.2(8), RSMo Supp.1981), is involved. Mo.Const. art. V, § 3.
The facts in this case are undisputed. Daily Record Company is a newspaper publishing corporation which also engages in the commercial printing business as Mid-America Printing Company. A large percentage of Mid-America’s income (35%) is derived from printing advertising supplements for incorporation into and distribution as parts of newspapers.
A business which chooses to advertise by means of a newspaper advertising supplement may have such a supplement printed by the newspaper, or by a commercial printer. The advantage to an advertiser of a commercial printer is its ability to print a high quality, attractive product in great quantity. If the advertiser has the supplement printed by a commercial printer, the supplement is printed to the advertiser’s specifications and then shipped by the printer directly to the newspapers which will incorporate and distribute the supplement. The advertiser is billed by the printer for the printing charges and by the newspapers for the advertising charges. The advertising supplements in the case before us were handled in this manner. If the supplement is printed by the newspaper, the supplement is printed to the advertiser’s specifications. The advertiser is billed by the newspaper for the printing and advertising charges. No sales tax is imposed on this latter transaction. Publishers and sellers of newspapers are not subject to sales tax because newspapers are considered to be a nontaxable service, not a sale of tangible personal property. 12 C.S.R. 10-3.110(1) (1981).2 The newsprint used in printing newspapers is exempt from sales tax. Section 144.030.3(7).
In 1978, the director of revenue assessed sales tax of $238,110.33 against Daily Ree-[350]*350ord on the purchase price of the newspaper advertising supplements which Mid-America had printed for Schnucks, Famous Barr, and Venture stores in 1976, 1977, and 1978.3 Mid-America had not collected sales tax on the printing costs of these supplements because the advertisers had claimed entitlement to the newspaper exemption. Mid-America did, however, collect sales tax on printed advertising materials which were not to be inserted into newspapers. Daily Record petitioned the Administrative Hearing Commission for review of the director’s decision contending that by taxing the advertising supplements the director had improperly interpreted § 144.020.1, which provides in part:.
A tax is hereby levied and imposed upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.
The Administrative Hearing Commission affirmed in part and reversed in part the director’s decision. The Commission concluded that an advertising supplement is an integral part of the newspaper. But, it also found that there were two transactions when the advertising supplement was printed by a commercial printer. “In the first transaction, the advertiser purchases the supplements from Petitioner; in the second transaction, Petitioner delivers the supplements to the newspaper for distribution to the general public. The first transaction results in tax liability; the second transaction is a nontaxable service.” The Commission held that “Petitioner should pay sales tax on the purchase of the finished produce, less a percentage of that tax equal to the percentage of the ‘newsprint’ component in the finished product, provided that the finished product (advertising supplement) is later incorporated into a newspaper.”
Daily Record petitions this court for review, contending on statutorial and constitutional grounds that the Commission erroneously interpreted and applied § 144.020.1 in concluding that any part of the sales price of the advertising supplement is a sale of tangible personal property. The director of revenue in his petition for review argues that the decision of the Commission is erroneous in holding that an advertising supplement is an integral part of a newspaper and thus entitled to the newsprint exemption authorized by § 144.030.3(7). In his brief and in oral argument, the director conceded that if the advertising supplement is an integral part of a newspaper, it is not subject to sales tax and is entitled to the newsprint exemption. Therefore, resolution of this case requires determining whether an advertising supplement is a “newspaper.”
A decision of the Administrative Hearing Commission “shall be upheld when authorized by law and supported by competent and substantial evidence upon the whole record, . .. and if the approval or disapproval of the exercise of authority in question by the administrative hearing commission does not create a result or results clearly contrary to that which the court concludes were the reasonable expections of the general assembly at the time such authority was delegated to the agency.” Sec[351]*351tion 161.338. Both parties argue that the commission incorrectly interpreted and applied the law. Administrative agency decisions based on the agency’s interpretation of law “are matters for the independent judgment of the reviewing court, and correction where erroneous.” St. Louis County v. State Tax Commission, 562 S.W.2d 334, 337-38 (Mo. banc 1978).
The identical question, whether an advertising supplement is a “newspaper”, was raised in Sears, Roebuck & Co. v. State Tax Commission, 370 Mass. 127, 345 N.E.2d 893 (1976). In Sears, taxpayer had been assessed use taxes on advertising supplements which had been prepared by commercial printers for insertion into newspapers. The Massachusetts court, holding that such supplements were parts of newspapers not subject to sales or use taxes, reversed the tax board. By statute, Mass.Gen.Laws Ann. ch. 64H, § 6(m) (West 1978), sales of newspapers are exempt from sales tax. The purchaser of sales tax exempt property enjoys the same exemption from the use tax. Mass.Gen.Laws Ann. ch. 641, § 7(b) (West 1978). The tax board had found that if similar advertising supplements had been published by the newspaper which distributed them, the taxpayer would not have been subject to the use tax. The Sears court concluded that the fact the supplements “were not printed directly by the newspapers does not change the result.” Id. 345 N.E.2d at 895.
The Massachusetts court relied on the description of a newspaper in Friedman’s Express, Inc. v. Mirror Transportation Co., 71 F.Supp. 991 (D.N.J.1947), aff’d, 169 F.2d 504 (3d Cir. 1948). In Friedman's Express,
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SEILER, Judge.
Pursuant to § 161.337, RSMo 1978,1 Daily Record Company and the Director of Revenue have both petitioned for review of a decision of the Administrative Hearing Commission. This court has jurisdiction because construction of state revenue laws, §§ 144.020.1 and 144.030.3(7) (currently codified at § 144.030.2(8), RSMo Supp.1981), is involved. Mo.Const. art. V, § 3.
The facts in this case are undisputed. Daily Record Company is a newspaper publishing corporation which also engages in the commercial printing business as Mid-America Printing Company. A large percentage of Mid-America’s income (35%) is derived from printing advertising supplements for incorporation into and distribution as parts of newspapers.
A business which chooses to advertise by means of a newspaper advertising supplement may have such a supplement printed by the newspaper, or by a commercial printer. The advantage to an advertiser of a commercial printer is its ability to print a high quality, attractive product in great quantity. If the advertiser has the supplement printed by a commercial printer, the supplement is printed to the advertiser’s specifications and then shipped by the printer directly to the newspapers which will incorporate and distribute the supplement. The advertiser is billed by the printer for the printing charges and by the newspapers for the advertising charges. The advertising supplements in the case before us were handled in this manner. If the supplement is printed by the newspaper, the supplement is printed to the advertiser’s specifications. The advertiser is billed by the newspaper for the printing and advertising charges. No sales tax is imposed on this latter transaction. Publishers and sellers of newspapers are not subject to sales tax because newspapers are considered to be a nontaxable service, not a sale of tangible personal property. 12 C.S.R. 10-3.110(1) (1981).2 The newsprint used in printing newspapers is exempt from sales tax. Section 144.030.3(7).
In 1978, the director of revenue assessed sales tax of $238,110.33 against Daily Ree-[350]*350ord on the purchase price of the newspaper advertising supplements which Mid-America had printed for Schnucks, Famous Barr, and Venture stores in 1976, 1977, and 1978.3 Mid-America had not collected sales tax on the printing costs of these supplements because the advertisers had claimed entitlement to the newspaper exemption. Mid-America did, however, collect sales tax on printed advertising materials which were not to be inserted into newspapers. Daily Record petitioned the Administrative Hearing Commission for review of the director’s decision contending that by taxing the advertising supplements the director had improperly interpreted § 144.020.1, which provides in part:.
A tax is hereby levied and imposed upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.
The Administrative Hearing Commission affirmed in part and reversed in part the director’s decision. The Commission concluded that an advertising supplement is an integral part of the newspaper. But, it also found that there were two transactions when the advertising supplement was printed by a commercial printer. “In the first transaction, the advertiser purchases the supplements from Petitioner; in the second transaction, Petitioner delivers the supplements to the newspaper for distribution to the general public. The first transaction results in tax liability; the second transaction is a nontaxable service.” The Commission held that “Petitioner should pay sales tax on the purchase of the finished produce, less a percentage of that tax equal to the percentage of the ‘newsprint’ component in the finished product, provided that the finished product (advertising supplement) is later incorporated into a newspaper.”
Daily Record petitions this court for review, contending on statutorial and constitutional grounds that the Commission erroneously interpreted and applied § 144.020.1 in concluding that any part of the sales price of the advertising supplement is a sale of tangible personal property. The director of revenue in his petition for review argues that the decision of the Commission is erroneous in holding that an advertising supplement is an integral part of a newspaper and thus entitled to the newsprint exemption authorized by § 144.030.3(7). In his brief and in oral argument, the director conceded that if the advertising supplement is an integral part of a newspaper, it is not subject to sales tax and is entitled to the newsprint exemption. Therefore, resolution of this case requires determining whether an advertising supplement is a “newspaper.”
A decision of the Administrative Hearing Commission “shall be upheld when authorized by law and supported by competent and substantial evidence upon the whole record, . .. and if the approval or disapproval of the exercise of authority in question by the administrative hearing commission does not create a result or results clearly contrary to that which the court concludes were the reasonable expections of the general assembly at the time such authority was delegated to the agency.” Sec[351]*351tion 161.338. Both parties argue that the commission incorrectly interpreted and applied the law. Administrative agency decisions based on the agency’s interpretation of law “are matters for the independent judgment of the reviewing court, and correction where erroneous.” St. Louis County v. State Tax Commission, 562 S.W.2d 334, 337-38 (Mo. banc 1978).
The identical question, whether an advertising supplement is a “newspaper”, was raised in Sears, Roebuck & Co. v. State Tax Commission, 370 Mass. 127, 345 N.E.2d 893 (1976). In Sears, taxpayer had been assessed use taxes on advertising supplements which had been prepared by commercial printers for insertion into newspapers. The Massachusetts court, holding that such supplements were parts of newspapers not subject to sales or use taxes, reversed the tax board. By statute, Mass.Gen.Laws Ann. ch. 64H, § 6(m) (West 1978), sales of newspapers are exempt from sales tax. The purchaser of sales tax exempt property enjoys the same exemption from the use tax. Mass.Gen.Laws Ann. ch. 641, § 7(b) (West 1978). The tax board had found that if similar advertising supplements had been published by the newspaper which distributed them, the taxpayer would not have been subject to the use tax. The Sears court concluded that the fact the supplements “were not printed directly by the newspapers does not change the result.” Id. 345 N.E.2d at 895.
The Massachusetts court relied on the description of a newspaper in Friedman’s Express, Inc. v. Mirror Transportation Co., 71 F.Supp. 991 (D.N.J.1947), aff’d, 169 F.2d 504 (3d Cir. 1948). In Friedman's Express, the issue was whether motor carriers used to transport comic sections from the printer to the newspaper were entitled to the Interstate Commerce Act exemption for motor vehicles “used exclusively for distribution of newspapers.” The court, in holding that the exemption applied, defined a newspaper:
The present-day newspaper, in addition to carrying “items of general news interest”, contains enormous quantities of advertising, political comment, chess problems, cross word puzzles, what are called (and very often with lamentable inaccuracy) comics, and special features of unending variety. The sum total is known as a newspaper, and generally regarded as such. . .. Enormous amounts of advertising are the main source of revenue of dailies, weeklies and monthlies.. ..
All of this melange is contained in what are known as special sections of the paper. . . . Each section is thus an integral part of the newspaper, made so not because it is physically folded in a news section, but because it has assumed the character of the journal of which it is a part; . . .
Id. at 991-92.
The Administrative Hearing Commission in reaching its decision had found two transactions, the first of which was taxable. A similar contention was discussed in Friedman’s Express. There the court stated that, although the comic section was printed separately, it was a part of the newspaper from the time it was printed. “[I]t is not yet placed in physical contiquity with the rest of its fellow parts that go to make up the modern intelligencer. It has no character of its own, nor is it intended for sale separate from the balance of the newsprint with which it makes up the journal.” Id. at 992. The same can be said of the newspaper advertising supplement. The advertiser orders the supplement solely to be incorporated into a newspaper. That supplement has no character of its own. The newspaper advertising supplement is part of a newspaper when printed. In actuality, there is but one continuous transaction.
The conclusion of the Massachusetts court in Sears Roebuck & Co. v. State Tax Commission, supra, although based on a statute, is equally sound in this case. Missouri’s sales tax statute, § 144.020.1, has long been interpreted not to apply to newspapers which disseminate news, a nontaxable service. An advertising supplement, which is printed solely to be inserted into a newspaper and, in fact, is distributed in the news[352]*352paper, is an integral part of that newspaper from the time it is printed and is entitled to the same exemption from the sales tax as is the remainder of a newspaper. Furthermore, the newsprint used to print such advertising supplement is tax exempt. Section 144.030.3(7).
The decision of the Administrative Hearing Commission that there are two transactions, the first of which is taxable, is reversed. The decision that the newsprint used in printing said supplement is exempt from taxation is affirmed. The cause is remanded for proceedings consistent with this opinion.
DONNELLY, C. J., and WELLIVER, MORGAN and HIGGINS, JJ., concur.
RENDLEN, J., dissents.
BARDGETT, J., dissents in separate opinion filed.