Tax Type
Retail Sales and Use Tax
Description
Printing; Storage and distribution
Topic
Taxability of Persons and Transactions
Date Issued
06-02-1997
June 2, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Dear**********
This will reply to your letter of March 13, 1997, in which *****(the Taxpayer) requests a ruling regarding sales tax collected on sales of newsletters for distribution outside the Commonwealth.
FACTS
The Taxpayer operates a printing business outside Virginia. The Taxpayer entered into an agreement with its customer to print a bimonthly newsletter and provide mailing services. The Taxpayer prints the newsletters and sends them directly to a Virginia mailing house who mails the newsletters according to the customer's mailing list. The newsletter is mailed to the customer's membership and is not available to the general public. The newsletter is included in the cost of the customer's membership dues.
The Taxpayer collects the Virginia sales tax from its customer on all sales of newsletters. However, the Taxpayer recently discovered that only two percent of the total newsletters printed for distribution were actually mailed to Virginia members.
The Taxpayer is requesting a refund of sales tax erroneously collected on sales of newsletters for distribution outside Virginia.
RULING
Code of Virginia § 58.1-609.6(4) provides an exemption from the retail sales and use tax for "[c]atalogs, letters, brochures, reports, and similar printed materials,... when stored for twelve months or less in the Commonwealth and distributed for use without the Commonwealth...."
Based on the information provided, the newsletters were shipped from the printer to a Virginia mailing house where they were stored for less than twelve months before distribution in Virginia and other states. Therefore, sales of newsletters for distribution in other states qualify for exemption from the tax. However, sales of the newsletter for distribution in Virginia are subject to the tax.
Title 23 of the Virginia Administrative Code (VAC) 10-210-3040, copy enclosed, addresses sales and use tax refunds, and states in part, the following:
-
- A dealer may request a refund for taxes erroneously assessed or illegally collected. The dealer must show that the tax erroneously or illegally collected was paid by him and not passed on to the consumer, or the tax was collected from the consumer as tax and subsequently refunded to the consumer. Refunds cannot be authorized unless the request is made within three years from the due date of the return.
A refund of the tax collected on newsletters distributed outside Virginia will only be approved if the Taxpayer can show that the erroneously charged taxes have been refunded or credited to the account of its customer. The Taxpayer should provide the necessary information to ****** Office of Tax Policy, P. O. Box 1880, Richmond, Virginia 23218-1880.
As indicated in your letter, the two percent estimate of the total newsletters printed for distribution in Virginia is based on the customer's current Virginia membership. For the future, the Taxpayer should request quarterly updates of the Virginia membership percentage from the customer, to determine the percentage of newsletters subject to the sales tax.
If you have any further questions regarding this letter, please contact*****at ******** .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12318T
Rulings of the Tax Commissioner