Tax Type
Retail Sales and Use Tax
Description
Direct mail advertising supplements
Topic
Taxability of Persons and Transactions
Date Issued
10-05-2000
October 5, 2000
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This will reply to your letter of August 25, 2000, in which you seek a ruling on behalf of an anonymous client (the "Taxpayer"), regarding the application of the retail sales and use tax to direct mail advertising printed and mailed by the Taxpayer.
FACTS
The Taxpayer is a printer and mailer of direct mail advertising, which is mailed to recipients every six to eight weeks. The advertising is sold by franchisees of the Taxpayer, primarily through contracts with retailers and local service providers. The franchisee has exclusive rights for the sale of advertising in his or her geographical territory. The direct mail advertising is mailed directly to recipients, free of charge, in the geographical area covered by the franchisee.
The Taxpayer believes the direct mail advertising qualifies as a publication and qualifies for the media-related exemption from the sales tax found in Code of Virginia § 58.1-609.6(3). The Taxpayer is requesting a format ruling as to the tax application.
RULING
Code of Virginia § 58.1-609.6(3) provides an exemption from the retail sales and use tax for "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 publication." (Emphasis added).
Title 23 of the Virginia Administrative Code (VAC) 10-210-1060 (copy enclosed) addresses the department's position with respect to exempt publications, and provides, in part, that "the tax does not apply to the retail sales of any newspaper, magazine or other publication issued daily, or regularly at average intervals not exceeding three months, except that newsstand sales of publications are taxable." It has been the longstanding policy of the department that exempt publications be limited to newspapers, magazines, and similar periodicals. Advertising inserts and supplements are addressed in Subsection C of this regulation, as follows:
Based on the information provided, I find no basis for classifying the direct mail advertising in question as an exempt publication in accordance with Code of Virginia § 58.1-609.6(3). If you should have any questions, please contact * * *, Office of Tax Policy, at * * *
Danny M. Payne
Tax Commissioner
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This will reply to your letter of August 25, 2000, in which you seek a ruling on behalf of an anonymous client (the "Taxpayer"), regarding the application of the retail sales and use tax to direct mail advertising printed and mailed by the Taxpayer.
FACTS
The Taxpayer is a printer and mailer of direct mail advertising, which is mailed to recipients every six to eight weeks. The advertising is sold by franchisees of the Taxpayer, primarily through contracts with retailers and local service providers. The franchisee has exclusive rights for the sale of advertising in his or her geographical territory. The direct mail advertising is mailed directly to recipients, free of charge, in the geographical area covered by the franchisee.
The Taxpayer believes the direct mail advertising qualifies as a publication and qualifies for the media-related exemption from the sales tax found in Code of Virginia § 58.1-609.6(3). The Taxpayer is requesting a format ruling as to the tax application.
RULING
Code of Virginia § 58.1-609.6(3) provides an exemption from the retail sales and use tax for "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 publication." (Emphasis added).
Title 23 of the Virginia Administrative Code (VAC) 10-210-1060 (copy enclosed) addresses the department's position with respect to exempt publications, and provides, in part, that "the tax does not apply to the retail sales of any newspaper, magazine or other publication issued daily, or regularly at average intervals not exceeding three months, except that newsstand sales of publications are taxable." It has been the longstanding policy of the department that exempt publications be limited to newspapers, magazines, and similar periodicals. Advertising inserts and supplements are addressed in Subsection C of this regulation, as follows:
- Advertising inserts or supplements and other printed matter distributed with or as a part of a nontaxable publication are not subject to the tax. However, materials printed as inserts or supplements which are not distributed with a nontaxable publication, for example those distributed in stores or through the mails, are subject to the tax, unless otherwise specifically exempted by law . . . . (Emphasis added).
Based on the information provided, I find no basis for classifying the direct mail advertising in question as an exempt publication in accordance with Code of Virginia § 58.1-609.6(3). If you should have any questions, please contact * * *, Office of Tax Policy, at * * *
Danny M. Payne
Tax Commissioner
Related Documents
Rulings of the Tax Commissioner