Tax Type
Retail Sales and Use Tax
Description
Newsletter and journal publications
Topic
Exemptions
Date Issued
08-02-1991
August 2, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear****************
This will reply to your letter of July 2, 1991 in which you request a ruling on the applicability of sales and use tax to publications issued by the*************(the Taxpayer).
FACTS
The Taxpayer publishes several publications including a journal, ******* and newsletters****************** and ********* which are distributed free of charge to its membership on a monthly basis. These items are also offered to nonmembers on a subscription basis, with the exception of ********which is also offered free of charge to nonmembers. In addition, the Taxpayer offers products for sale such as books, charts, brochures, videos, software, slides, audio tapes and certificate frames to its membership which are advertised in a separate brochure. The advertising brochure is distributed both within and outside Virginia. You request a ruling on how the sales and use tax applies to production costs as well as sales made to Virginia residents of the aforementioned publications and products.
RULING
I will address the issues presented in your letter as grouped below:
Publications/Printing: Va. Code §58.1-608(3)(b)(v) provides that the retail sales and use tax does not apply to equipment, printing or supplies used directly to produce a publication described in subdivision 6 c whether it is ultimately sold at retail or for resale or distribution at no cost.
A publication is described in subdivision 6 c as any publication issued daily, or regularly at average intervals not exceeding three months, and advertising supplements and any other printed matter ultimately distributed with or as part of such publications, except that newsstand sales of the same are taxable. The term is further defined in Virginia Regulation (VR) 630-10-73 (copy enclosed) as "any written compilation of information available to the general public." A review of the Taxpayer's publications, ***********************indicates that they would qualify for the publication exemption and further qualify for the printing exemption. Thus, purchases of tangible personal property used directly to produce these publications are exempt from the tax. Form ST-11 (copy enclosed) should be presented to retailers to purchase items exempt of the tax.
Advertising Brochure: Va. Code §58.1-608(6)(d) provides an exemption for certain printed materials stored in Virginia and mailed outside the state. In the case of catalogs and other printed advertising materials, the tax does not apply provided such materials are stored for twelve months or less in Virginia and mailed to or distributed outside of Virginia. The advertising brochures may be purchased exclusive of the tax under Form ST-10A (copy enclosed). However, the Taxpayer is subject to the use tax on the brochures distributed in Virginia and must remit the tax in the period that the brochures are distributed to Virginia residents.
Products for Sale: The items described in the advertising brochure as products you offer for sale may be purchased exclusive of the tax under a resale certificate of exemption, Form ST-10 (copy enclosed). The resale exemption extends to any tangible personal property that will pass to the ultimate purchaser. The ultimate resale of these items to customers located outside Virginia is not subject to the Virginia sales tax. However, the tax must be collected on all sales to instate customers. Under Va. Code 58.1-603, the Taxpayer is required to remit the sales tax on the sales price of these items (see VR 630-10-95 and VR 630-10-107, copies enclosed).
I trust this will answer the questions posed in your letter; however please contact the department if you have additional questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner