Tax Type
Retail Sales and Use Tax
Description
Advertising; Direct mail postage charges
Topic
Taxability of Persons and Transactions
Date Issued
12-14-1990
December 14, 1990
Dear ****
This will respond to your letter of October 24, 1990, in which you request a ruling on whether Virginia imposes a sales tax on postage for direct mail companies.
FACTS
* ********* * (the "Taxpayer") is a direct mail company which does all preparatory work on a direct mail program in-house and subcontracts out the print production, list, and data processing. To facilitate the mailings, it collects postage for the mailings from its customers and passes it on to the vendor who buys it, affixes it to and mails the letters.
The Taxpayer requests a ruling on whether postage as handled in the above manner is subject to the retail sales tax.
RULING
I have enclosed a copy of a Ruling of the Tax Commissioner dated May 22, 1989 relating to this issue. As the ruling explains, the total charge for direct advertising mailings, including mailing services, are exempt from the tax. However, the total charge for a direct mail package other than for advertising purposes of a customer, such as for internal corporate or employee use, is subject to the tax.
As the letter also explains, transportation charges, including postage charges, for direct mail packages, however, are exempt from the tax when separately stated on the sales invoice. Handling and other charges for folding, etc. provided by the Taxpayer for such packages are subject to the tax if no other exemption applies.
If you have any further questions regarding this matter, please contact the Department.
Sincerely
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner