Tax Type
Retail Sales and Use Tax
Description
Advertising; Videotape purchases
Topic
Taxability of Persons and Transactions
Date Issued
02-12-1997
February 12, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Dear******************
This will reply to your letter in which you request a ruling as to the retail sales and use tax application to certain purchases made by ********************* (the "Taxpayer").
FACTS
The Taxpayer, a law firm, hired a production company (the "Company") to shoot, produce, and edit a television commercial for their firm. Once the production has been completed, the Company will provide the Taxpayer with duplicate copies of the commercial for distribution to television and cable stations for viewing. The Taxpayer is requesting a ruling on the retail sales and use tax application to the duplicate tapes.
RULING
Code of Virginia § 58.1-609.6, copy enclosed, provides an exemption from the retail sales and use tax for the "lease, rental, license, sale, other transfer, or use of any audio or video tape, film or other audiovisual work where the transferee or user acquires or has acquired the work for the purpose of licensing, distributing, broadcasting, commercially exhibiting or reproducing the work or using or incorporating the work into another such work...".
Based on the information provided in your letter, and the reading of the above exemption statute, I find that the Taxpayer is purchasing the commercial for the purpose of broadcasting over television and cable television stations and is therefore exempt. I would like to point out that any dubs of the commercial which are purchased for any purpose other those set out above, will be subject to the tax.
If you should have any further questions, please contact *****, Office of Tax Policy at *************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12070K
Rulings of the Tax Commissioner