June 1, 2022
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of your anonymous client (the “Taxpayer”) requesting a ruling on the application of the retail sales and use tax on printed advertising delivered to customers in Virginia. I apologize for the delay in responding to your request.
FACTS
The Taxpayer, located outside of Virginia, engages in the business of printing and distributing direct mail advertising to individuals in Virginia based on a mailing list provided by its customers. The Taxpayer requests clarification concerning whether transactions involving the delivery of direct mail advertising to individuals in Virginia are subject to the Virginia retail sales tax.
RULING
Virginia Code § 58.1-609.6 (5) provides that the retail sales and use tax shall not apply to “[a]dvertising as defined in § 58.1-602.” Virginia Code § 58.1-602 defines advertising as:
…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. Any person providing advertising as defined in this section shall be deemed to be the user or consumer of all tangible personal property purchased for use in such advertising. [Emphasis added.]
Title 23 of the Virginia Administrative Code (VAC) 10-210-40 defines the term “media” to include “newspapers, magazines, billboards, direct mail, radio, television, and other modes of communication.” [Emphasis added.] In addition, Title 23 VAC 10-210-41 (B) provides that: “Advertising businesses are engaged in providing professional services and are the users and consumers of all tangible personal property purchased for use in such businesses…” The regulation goes on to list various purchases and states that the tax applies to such purchases made by an advertising business.
Presuming the Taxpayer’s customers are advertising agencies, the sale of printed advertising products shipped to such agencies located in Virginia would be subject to the tax. If, however, the Taxpayer is printing and shipping the direct mail advertising to individuals in Virginia who did not solicit the printed materials or on behalf of customers that purchased the printed advertising, the sale would not be subject to tax. See Public Documents 85-35 (2/28/1985), 93-41 (3/4/1993), and 10-73 (5/18/2010).
This response is based on the facts provided as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
The Code of Virginia sections cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department’s web site. If you have any questions about this response, you may contact ***** in the Department’s Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/3881.G