Tax Type
Retail Sales and Use Tax
Description
Printing of brochures for distribution outside Virginia
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
04-11-1988
April 11, 1988
Re: Ruling Request
Retail Sales and Use Tax
Dear******************
This is in reply to your letter in which you request a ruling regarding the correct application of the sales and use tax to the following transaction.
FACTS
***********(Printer) prints 300,000 brochures for a customer (exempt association under Virginia law) located in a state other than Virginia. The customer has instructed Printer to ship 100,000 of the brochures to a Virginia mailhouse, 100,000 to a Washington, D.C. mailhouse and 100,000 to a Maryland mailhouse. None of the mailhouses will store the brochures for over one month. Ultimately, 2% of the total order will be mailed to individuals in each of the three localities. The brochures do not involve resale in any way.
Specifically, you ask how to compute the tax due to Virginia on this transaction and if applicable, what type of exemption certificate from the customer would be required. Finally, you ask if the answers to the above questions would differ if the customer is not an exempt organization.
RULING
If in fact the customer is an exempt organization (exempt from paying tax on its purchases), there would be no tax due on the transaction. However, under Virginia law there is no general exemption from the tax for nonprofit organizations. The only organizations exempt from the tax are those organizations statutorily exempt under the Code of Virginia. Therefore, unless your customer is one of the entities enumerated under Virginia Code §58.1-608, sales to your customer may be subject to the tax, based on Virginia Regulation 630-10-86 (copy enclosed). The tax treatment of various types of printed materials is summarized from the regulation below.
General printing
The sale and delivery of printing from a Virginia printer to a customer outside the state is not taxable, provided the conditions set forth in Virginia Regulation 630-10-51 on Interstate commerce are met. The delivery to a customer of printing in Virginia by any means is taxable. For example, when an out-of-state customer sends a vehicle into Virginia to pick up printed material, the transaction is taxable. However, if the printed materials are sent to the out-of-state customer via a common carrier or the U.S. mail, the transaction is exempt. When the customer purchases printing and directs that the printer ship the materials to locations both within and without Virginia, the tax is computed only with respect to the materials delivered to the Virginia locations. The tax is applicable when the materials are delivered to a central storage facility in Virginia for subsequent distribution to facilities outside the state.
Catalogs and other printed advertising materials
In the case of catalogs and other printed materials, the tax does not apply provided such printed materials are stored for twelve months or less in Virginia and are mailed to or distributed outside Virginia. This exemption from the tax applies to materials printed for one's own use or consumption as well as materials printed for sale or resale. A more detailed explanation of this exemption is found in Virginia Regulation 630-10-18.1 (copy enclosed).
Letters, brochures, reports and similar printed materials
From July 1, 1986 through June 30, 1989, letters, brochures, reports, and similar printed materials (except administrative supplies) are exempt from the tax, if such materials are stored for twelve months or less in Virginia and mailed to or distributed outside of Virginia. Fund raising and promotional letters, circularly, folders, brochures, and pamphlets, including those for charitable, political, and religious purposes are included within this category of exempt printed materials. A more comprehensive list of exempt printed materials may be found in §8 of Virginia Regulation 630-10-86.
Based upon your letter, it appears that the printed materials that you are concerned about fall within this category. If this is the case and your customer is not otherwise exempted from paying the tax, tax would be due only on the sales price of the printed materials that were shipped to the Virginia mailhouse and mailed to Virginia addresses. Upon receipt of a properly executed Form ST-10 A from the purchaser, the printed materials that will be distributed outside of Virginia will not be subject to tax.
If after reading this letter and the enclosed regulations you have further questions, please do not hesitate to contact my office.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner