Tax Type
Retail Sales and Use Tax
Description
Desktop publishing and word processing services
Topic
Taxability of Persons and Transactions
Date Issued
09-12-1991
September 12, 1991
Re: § 58.1-1821 Application: Retail Sales & Use Tax
Dear********************
This will reply to your letter of June 11, 1991 in which you seek a ruling on the taxability of desktop publishing and word processing services. Since you were recently audited and the audit findings center around the tax treatment of the above, I feel it is more appropriate to treat this as an application for correction under Va. Code § 58.1-1821.
DETERMINATION
The department has previously addressed the taxability of desktop publishing and word processing services in P.D. 88-309 (11/7/88) and the Ruling of the Commissioner dated June 11, 1990, copies enclosed. As the public document indicates, when a taxpayer provides desktop publishing services in the production of informational newsletters and brochures for clients, it is deemed to be providing an exempt personal service under Va. Code § 58.1-608(A)(5)(a). Likewise, when a taxpayer provides word processing services, such services are also exempt. However, in both instances, if a taxpayer goes beyond the rendition of the service and actually sells tangible personal property (e.g., copies of an original letter or newsletter) it would be required to register as a dealer with the department and collect the tax from its customer.
Accordingly, I am referring this matter back to the ******** District Office for revision consistent with departmental policy set forth in this and the enclosed letters. You should be hearing from them shortly.
If you have any further questions about this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner