Tax Type
Retail Sales and Use Tax
Description
Mailing of out-of-state produced materials
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
06-27-1989
June 27, 1989
Re: Ruling Request/ Sales and Use Tax
Dear*********************
This will reply to your letter of April 18, 1989 seeking relief from payment of state use tax on items purchased from outside Virginia, for mailing to residents in Virginia. This also has reference to information recently provided by telephone to a member of my Tax Policy Division staff.
FACTS
The taxpayer is a voluntary health organization incorporated in Virginia as a nonprofit organization, and is exempt from federal income tax under Internal Revenue Code §501(c)(3). In connection with its fundraising activities, the taxpayer has materials produced and prepared by out-of-state suppliers for mailing by such suppliers directly to Virginia residents. The taxpayer asks whether it is liable for use tax on such items produced entirely outside the state for mailing to Virginia residents.
RULING
Virginia Code §58.1-608(20), exempts from the sales and use tax, the "[d]elivery of tangible personal property outside the Commonwealth, for use or consumption outside of the Commonwealth."
In addition, Virginia Retail Sales and Use Tax Regulation (VR) 630-10-51, copy enclosed, provides in part that "[t]he tax does not apply to sales of tangible personal property in interstate or foreign commerce. 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 within Virginia."
Under these provisions, the taxpayer in this case is not liable for sales or use tax on any items purchased from out-of-state suppliers which are mailed from such suppliers directly to Virginia residents, since the taxpayer makes no taxable use of these items within Virginia.
However, any supplies or other items which are instead mailed by its out-of-state suppliers directly to the taxpayer, whether for its own use and consumption or subsequent mailing by the taxpayer to Virginia residents, would continue to be taxable. If the sales tax is not charged by its suppliers for such items, the taxpayer will be liable for the use tax on such items.
I hope this has answered your question, but let me know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner