Tax Type
Retail Sales and Use Tax
Description
Direct mailings
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
08-26-1987
August 26, 1987
Re: Ruling Request/ Sales and Use Tax
Dear *********************
This will reply to your letter of June 4, 1987 seeking a ruling on the correct application of the sales and use tax to a proposed transaction involving the sale of tangible personal property by your client, (X Corp.), a corporation based primarily in New York, to a company located solely in Virginia, (Y Corp.).
FACTS
According to your letter, pursuant to a proposed contract, X Corp. will provide Y Corp. with direct mail packets consisting of envelopes, letters, brochures and business reply cards, for mailing by X Corp. from New York, through the U.S. postal service, directly to residents of Virginia. X Corp. will not send any of the direct mail packets either directly or indirectly to Y Corp. In addition, according to your letter, X Corp. maintains an office in Virginia, but this office will not be involved in any aspect of the proposed transaction.
Accordingly, you ask whether Virginia's sales and use tax will apply to the proposed transaction.
RULING
Virginia Code §58.1-608(20) provides that the sales and use tax does not apply to the "[d]elivery of tangible personal property outside the Commonwealth for use or consumption outside of the Commonwealth." §630-10-51 of the Virginia Retail Sales and Use Tax Regulations then provides that the tax does not apply to "sales of tangible personal property in interstate or foreign commerce." This regulation section provides further that "[a] sale in interstate or foreign commerce occurs only when title or possession to the property being sold passes to the purchaser outside of Virginia and no use of the property is made [by the purchaser] within Virginia."
Accordingly, based solely on the facts presented, I find that the transaction, as proposed, would qualify as a sale in interstate commerce, exempt of Virginia's retail sales and use tax. The fact that X Corp. maintains an office in Virginia does not alter the fact that Y Corp. neither gains title or possession to the property being sold nor makes any use of the property being sold within Virginia.
It should be noted however, that this ruling should not be extended to any other transaction which is not identical to the one proposed in this case. In addition, the conclusion drawn in this case may not be relied upon by the parties to the transaction described herein if the facts presented change in any material respect at any time before the transaction is consummated.
I hope this has responded to your question, but let me know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner