"It is a newspaper."
Translation:Es ist eine Zeitung.
"Sie ist eine Zeitung" means "She is a newspaper". Er - He, Sie - she, Es - it. The neutral gender of Zeitung appeares in "eine". (I'm not a native speaker, please somebody verify this comment)
In such a case "It is a newspaper" translates to "Es ist eine Zeitung", because the newspaper was not directly referenced before hand. But say you had referenced the newspaper already, and wanted to continue talking about it but didn't want to continue say "the newspaper". For example you said "I am reading a newspaper. It is boring." This can translate to "Ich lese eine Zeitung. Sie ist langweilig." You can use "sie" instead of "es" because "the newspaper" is feminine, "die Zeitung." Because everyone already knows what you are referencing "sie" can become the feminine form of "it".
It's depending on the context. In some cases, 'das' would be more appropriate in german, where I would use 'it' in english. Two examples:
Pointing at something on the table - Q: Was ist das? A: Das ist eine Zeitung. Opening an envelope - Q: Was ist es? A: Es ist eine Zeitung
I would translate both to 'It's a newspaper'.
In the end this was asking for the translation of "It is a newspaper" not "That is a newspaper". No matter if you take both the same. In reality "es" translates to "it", and "das" translates to "that" (unless it is part of a noun such as "das Mädchen" in which case it is "the" for "the girl".)
I've found this, too, maybe it helps you or just anyone else with the same questions: http://www.nthuleen.com/teach/grammar/nomakkdatexpl.html