Bulletin Number
VTB 85-9
Tax Type
Retail Sales and Use Tax
Description
Commercial advertisements
Topic
Taxability of Persons and Transactions
Date Issued
04-26-1985
The Department of Taxation adopted Retail Sales and Use Tax Regulation VR 630-10-3: Advertising on April 12, 1985. The text of this regulation appears in the April 26 issue of the Virginia Register.
The regulation specifies that the production of commercial advertisements is not a service but rather the production of tangible personal property, the total charge for which is subject to the tax. The current regulation is effective only for the period of June 1, 1985 through June 30, 1986. This regulation supersedes all previous regulations relative to advertising including those set forth in the regulation booklets published in 1966, 1969, and 1979.
All persons engaged in the production of commercial advertising should contact the department if not already registered for the collection of the tax and register for collection and remittance of the tax. Requests for registration materials should be addressed to Department of Taxation, P.O. Box 6-L, Richmond, VA 23282 and should be submitted prior to June 1, 1985.
As the result of legislation enacted by the 1985 General Assembly, effective July 1, 1986 charges for the planning, creating or placing of advertising in newspapers, magazines, billboards broadcasting and other media, including without limitation, the providing of concept, writing, graphic design, mechanical art, photography and production supervision will not be subject to the tax. Persons providing these services will be deemed the users and consumers of all tangible personal property purchased and will therefore be liable for payment of the tax on all such purchases. The Department of Taxation will shortly begin the preparation of a new regulation, to be effective July 1, 1986, reflecting this legislative change.
Copies of VR 630-10-3 will be available on request from the department.
Tax Bulletins