Tax Type
Retail Sales and Use Tax
Description
Mailing services
Topic
Taxability of Persons and Transactions
Date Issued
07-07-2000
July 7, 2000
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 mailing services performed by ***** (the "Taxpayer"). I apologize for the delay in responding to your request.
FACTS
The Taxpayer, a national corporation with registered Virginia dealers, is anticipating providing mailing services for its customers. The mailing service will include mail piece design, furnishing of mailing lists, printing, addressing, postage, and mailing. The Taxpayer's service center, which will be providing this service, is located outside the Commonwealth. The Taxpayer is requesting a ruling as to application of the Virginia retail sales and use tax for this service.
RULING
Code of Virginia § 58.1-609.6(5) provides an exemption from the sales and use tax for "advertising," which is defined in Code of Virginia § 58.1-602 as:
[t]he 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 herein shall be deemed to be the user or consumer of all tangible personal property purchased for use in such advertising. (Emphasis added.)
In addition, Virginia Administrative Code (VAC) 10-210-40, copy enclosed, defines an "advertising business" to mean "any person or group of persons providing advertising . . . ." As provided in the above statute, any person providing advertising is the user and consumer of all materials used in providing the advertising. VAC 10-21041.B, copy enclosed, addresses purchases made by advertising businesses and subsection B provides that the sales tax shall apply to the following:
Printing, including direct mail items, non-customized or stock mailing lists, handbills, brochures, flyers, bumper stickers, posters and similar printed materials whether or not for use in the development of a specific advertising campaign .... (Emphasis added.)
Based on the above, and the nature of the Taxpayer's business, the Taxpayer would be acting as an advertising business with respect to the direct mail items. In accordance with Virginia law, the Taxpayer would be considered the user and consumer of all tangible personal property used in creating the direct mail advertising. The charge for the provision of these services to Virginia customers would not be taxable. In addition, separately stated postal would also not be taxable.
If you should have any additional questions regarding this matter, please contact *****, Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/17526K
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 mailing services performed by ***** (the "Taxpayer"). I apologize for the delay in responding to your request.
FACTS
The Taxpayer, a national corporation with registered Virginia dealers, is anticipating providing mailing services for its customers. The mailing service will include mail piece design, furnishing of mailing lists, printing, addressing, postage, and mailing. The Taxpayer's service center, which will be providing this service, is located outside the Commonwealth. The Taxpayer is requesting a ruling as to application of the Virginia retail sales and use tax for this service.
RULING
Code of Virginia § 58.1-609.6(5) provides an exemption from the sales and use tax for "advertising," which is defined in Code of Virginia § 58.1-602 as:
[t]he 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 herein shall be deemed to be the user or consumer of all tangible personal property purchased for use in such advertising. (Emphasis added.)
In addition, Virginia Administrative Code (VAC) 10-210-40, copy enclosed, defines an "advertising business" to mean "any person or group of persons providing advertising . . . ." As provided in the above statute, any person providing advertising is the user and consumer of all materials used in providing the advertising. VAC 10-21041.B, copy enclosed, addresses purchases made by advertising businesses and subsection B provides that the sales tax shall apply to the following:
Printing, including direct mail items, non-customized or stock mailing lists, handbills, brochures, flyers, bumper stickers, posters and similar printed materials whether or not for use in the development of a specific advertising campaign .... (Emphasis added.)
Based on the above, and the nature of the Taxpayer's business, the Taxpayer would be acting as an advertising business with respect to the direct mail items. In accordance with Virginia law, the Taxpayer would be considered the user and consumer of all tangible personal property used in creating the direct mail advertising. The charge for the provision of these services to Virginia customers would not be taxable. In addition, separately stated postal would also not be taxable.
If you should have any additional questions regarding this matter, please contact *****, Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/17526K
Rulings of the Tax Commissioner