Tax Type
Retail Sales and Use Tax
Description
Zoning map subscriptions
Topic
Taxability of Persons and Transactions
Date Issued
07-29-1988
July 29, 1988
Re: Request for Ruling/Retail Sales and Use Tax
Dear****************
This will reply to your letter dated April 11, 1988, in which you requested a ruling on the application of sales and use tax to*********** (The Taxpayer").
FACTS
The Taxpayer owns and operates a business which produces a map of zoning changes for localities (cities or counties) within the Commonwealth. The Taxpayer purchases maps from localities showing either zoning or plot layouts of all real estate in the locality. These large scale maps are taken to a printer for a reduction in size. The Taxpayer marks zoning and plot changes that have occurred within the particular locality and the maps are taken to a printer who copies them for distribution.
Subscribers receive the maps on a monthly basis and can select the locality mapped. The subscribers can also subscribe to maps of specific geographic regions within a locality. Subscribers also receive copies of Planning Commission minutes and agendas.
The Taxpayer is presently collecting sales tax on the cost price of the subscriptions and remitting the tax to the Commonwealth.
RULING
Va. Code §58.1-604 imposes a sales tax "upon every person who engages in the business of selling...or distributing tangible personal property in this Commonwealth...."
Va. Code §58.1-608(2), provides an exemption from the sales and use tax for "personal service transactions which involve sales as inconsequential elements for which no separate charges are made...." The decisive issue in this case is whether the sale of maps is an inconsequential element of a service which is exempt from the tax or whether the sale of maps is a sale of tangible personal property subject to the tax.
§630-10-97.1(B)(2) of the Virginia Retail Sales and Use Tax Regulations states:
-
- In order to determine whether a particular transaction which involves both the rendering of a service and the provision of tangible personal property constitutes an exempt service or a taxable retail sale, the "true object" of the transaction must be examined. If the object of the transaction is to secure a service and the tangible personal property which is transferred to the customer is not critical to the transaction, then the transaction may constitute an exempt service. However, if the object of the transaction is to secure the property which it produces, then the entire charge, including services provided, will be taxable.
- In order to determine whether a particular transaction which involves both the rendering of a service and the provision of tangible personal property constitutes an exempt service or a taxable retail sale, the "true object" of the transaction must be examined. If the object of the transaction is to secure a service and the tangible personal property which is transferred to the customer is not critical to the transaction, then the transaction may constitute an exempt service. However, if the object of the transaction is to secure the property which it produces, then the entire charge, including services provided, will be taxable.
The Taxpayer may purchase tangible personal property used in connection with the mapping business under a resale exemption certificate, Form ST-10 (copy enclosed). The Taxpayer must provide the vendor with a certified copy of the certificate before such purchases are made.
Per your telephone request, I am enclosing a copy of Virginia Retail Sales and Use Tax Regulations §630-10-45. If I can be of further assistance, please contact the Department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner