In this case we determine whether an advertiser, which has its advertising supplements printed out-of-state and which then pays a newspaper to insert and deliver the supplements with the newspaper, is *720subject to payment of use tax on the cost of the purchase of the supplements from the printer.
K Mart Corporation creates “mats” from which an out-of-state printer prints newspaper advertising inserts. The printer ships the inserts to newspapers selected by K Mart. Through contracts with these newspapers K Mart designates the number of inserts to be distributed at any given time as well as the date of distribution.
Once the newspapers receive the inserts they exercise exclusive possession over the supplements and determine the precise method of their distribution. If an insert is missing from a given newspaper, the paper must provide an insert to any complaining customer.
The Idaho State Tax Commission determined K Mart owed use tax on the inserts. The Idaho Board of Tax Appeals affirmed. On appeal to district court the parties cross motioned for summary judgment. The district court held the advertising inserts fell within the use tax statute but were nevertheless not taxable for two reasons: First, the inserts were a component part of the newspaper, bringing it within the production exemption of I.C. § 63-3622(d), and second, the sales tax regulation interpreting the applicable statutes violated equal protection. The Idaho State Tax Commission (commission) appeals.
The first issue we decide is whether the inserts are subject to the use tax statute. If we rule the inserts fall within the statute, K Mart nevertheless argues the sales tax regulation interpreting the statute violates equal protection. The regulation taxes inserts printed by printers other than newspapers while exempting from sales and use tax inserts printed by the distributing newspaper. In the alternative, K Mart argues the inserts fall within the production exemption to the use tax.
To begin our determination of whether the inserts fall within the use tax, as asserted by the commission, we look to the applicable statutes:
63-3621. Imposition and rate of the use tax.— An excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property acquired on or after July 1, 1965, for storage, use, or other consumption in this state at the rate of three per centum (3%) of the value of the properly, and a recent sales price shall be presumptive evidence of the value of the property.
(a) Every person storing, using, or otherwise consuming, in this state, tangible personal property is liable for the tax.
I.C. § 63-3621 (1974-77).
The term “use” is defined in I.C. § 63-3615(b) as follows:
63-3615. Storage — Use.
(b) The term “use” includes the exercise of any right or power over tangible personal property incident to the ownership or the leasing of that property____
I.C. § 63-3615(b) (1974-77).
Idaho’s use tax scheme taxes tangible personal property purchased outside the state that would not otherwise be subject to a sales or use tax in Idaho or any other state. See I.C. §§ 63-3621(c) and 63-3615(c). See, e.g., McConville v. State Board of Equalization, 85 Cal.App.3d 156, 159, 149 Cal.Rptr. 194, 196 (1978); Avco Manufacturing Corp. v. Connelly, 145 Conn. 161, 140 A.2d 479, 484 (1958); Southwestern Bell Tel. Co. v. State Com. of Revenue and Taxation, 168 Kan. 227, 212 P.2d 363, 365-66 (1949). Use taxes discourage Idaho purchasers from avoiding Idaho sales taxes by purchasing property in states with lower or no sales lax. The “mats” prepared by K Mart from which the out-of-state printer prints the inserts are subject to sales tax in Michigan, the state of printing. However, Michigan does not subject the inserts themselves to a sales or use tax.
Under the applicable statutes, and in the absence of an exemption, K Mart is subject to use tax on the inserts if it “exercises any right or power over [the inserts] incident to the ownership ... of that property.” I.C. § 63-3615(b). K Mart purchases the in*721serts from an out-of-state printer. K Mart therefore owns the inserts until it gives away the inserts to newspaper purchasers, even though it never takes possession of the inserts. Incident to and evidencing that ownership, K Mart contracts with the printer to have the inserts delivered to various Idaho newspapers. Under additional contracts, K Mart obligates the newspapers to include a specified number of the inserts in the newspapers on certain dates.
The newspaper publishers collate the inserts by the same method as the comics, T.V. magazines, and Sunday supplements. The publishers also retain control over the manner of distribution of their newspapers.
K Mart argues that only the consumers receiving the inserts “use” them and that K Mart does not. K Mart apparently argues the purpose of the inserts is to provide potential purchasers with news of goods available and on sale. But all advertising is used by advertisers, such as K Mart, for the purpose of making sales and profits. In light of this and the exercise by K Mart, through its contracts, of rights and powers over the inserts incident to their ownership, K Mart uses the inserts within the meaning of the use tax statute. K Mart Corp. v. South Dakota Dept. of Revenue, 345 N.W.2d 55, 58 (S.D.1984); Miller Brewing Co. v. Korshak, 35 Ill.2d 86, 219 N.E.2d 494, 498 (1966); appeal dismissed in Miller Brewing Co. v. Jones, 386 U.S. 684, 87 S.Ct. 1325, 18 L.Ed.2d 405 (1967); rehearing denied in Miller Brewing Co. v. Jones, 387 U.S. 938, 87 S.Ct. 2048, 18 L.Ed.2d 1006 (1967); and rehearing denied in Miller Brewing Co. v. Jones, 389 U.S. 946, 88 S.Ct. 281, 19 L.Ed.2d 303 (1967). Consequently, K Mart must pay use taxes on the inserts unless the inserts fall within a statutory exemption.
K Mart argues the inserts fall within the production exemption of I.C. § 63-3622(d) (1974-77), which reads in part:
63-3622. Exemptions. — There are exempted from the taxes imposed by this act the following: (d) Receipts from the sale, storage, use or other consumption in this state of tangible personal property which will enter into and become an ingredient or component part of tangible personal property manufactured, processed, mined, produced or fabricated for ultimate sale at retail within or without this state, and tangible personal property primarily and directly used or consumed in or during such manufacturing, processing, mining, farming, or fabricating operations by a business or segment of a business which is primarily devoted to such operation or operations, provided that the use or consumption of such tangible personal property is necessary or essential to the performance of such operation____ [Emphasis added.]
This statute exempts two types of tangible personal property: the property that becomes a component part of property sold at retail and property used or consumed in the production of property sold at retail. Further restricting each of these two clauses is the limitation of the exemption to a “business or segment of a business which is primarily devoted to such operation or operations” as “manufacturing, processing, mining, farming, or fabricating.” I.C. § 63-3622(d). This limitation modifies both the component part and consumption exemptions of the statute. If the legislature had intended to limit only the consumption exemption, the legislature would have used the disjunctive “or” rather than the conjunctive “and” between the two exemption clauses. The district court erred in finding the inserts exempt as component parts of the newspaper, without having first determined the operation to which K Mart is primarily devoted. Since K Mart is primarily devoted to retailing and not to “manufacturing, processing, mining, farming, or fabricating” (that is, K Mart is not a producer of inserts for resale), the production exemption does not apply to K Mart. K Mart must, therefore, pay use taxes on its advertising inserts.
The district court also held K Mart not liable for use tax on a second ground. The *722court said IDAPA 35.02.13, 15-A1 (now IDAPA 35.02.13, 15(c)) violates the equal protection clause of the fourteenth amendment to the federal constitution. This administrative regulation declares sales of inserts from printers to advertisers as taxable, while exempting inserts printed by the newspaper which ultimately distributes the inserts. Concluding this classification violated equal protection, the district court held K Mart not liable for use taxes.
While the sales tax regulations may make questionable distinctions regarding the tax consequences to advertisers using newspapers rather than third party printers, the statutory scheme makes no such distinction. Under that scheme, K Mart owes use tax on the inserts. I.C. §§ 63-3621, 63-3615(b). If a taxpayer owes tax under a statutory scheme that is constitutional, assessment of the tax pursuant to a regulation that does not comport with the constitution or with the statutory scheme does not defeat the taxpayer’s statutory liability. The tax statutes are fully enforceable even if no tax regulation interpreting them exists. Statutes control interpretive regulations. To the extent a regulation is unconstitutional, it is inconsistent with the constitutional statute it purports to interpret and is, therefore, of no effect to the extent of such inconsistency. C.f. Application of State Board of Medical Examiners, 201 Okl. 365, 206 P.2d 211, 214-15 (1949) (a regulation is ineffective to the extent it is inconsistent with the statute it purports to interpret.) Even if the tax regulation is unconstitutional, or simply inconsistent with the statute, as it appears to be, K Mart remains liable under the statutory scheme. The constitutional integrity of the applicable statutes has not been attacked.
Reversed. Costs to appellant. No attorney fees awarded.
DONALDSON, C.J., and BISTLINE, J., concur.. C. Advertising Staffers. The sale of “advertising stuffers” (i.e., printed advertising separate from but distributed concurrently with a newspaper) by the printer to the advertiser constitutes a retail sale of tangible personal property. The advertiser is the consumer of the printed advertising. The purchase by him, therefore, is taxable. A newspaper, however, is purchased at retail by the reader. If the newspaper publisher sells advertising in his own newspaper, no taxable sale has occurred between the newspaper and the advertiser. Likewise, if the publisher prints an advertising staffer to be distributed concurrently with the publisher’s own newspaper, no taxable sale has occurred. To the extent that a newspaper publisher prints advertising supplements which are not to be distributed as part of his newspaper, he is a contract printer and a retailer of the printing. A sales tax must be collected on the sales price charged to the advertiser.
When the advertising stuffer is printed out of the state and shipped into Idaho for use and distribution, then a taxable use has occurred. Again, the consumer of these advertising supplements is the advertiser. A use tax must be paid by the advertiser and should be reported in the appropriate space on his sales tax return. [Emphasis added.]