Tax Type
Retail Sales and Use Tax
Description
Taxability of catalogs and price lists
Topic
Documents Subject to Tax
Taxability of Persons and Transactions
Date Issued
12-06-2001
December 6, 2001
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This is in reply to your letter in which you request a ruling regarding the application of the retail sales and use tax to catalogs and price lists purchased by ***** (the "Taxpayer"). I apologize for the delay in responding.
FACTS
The Taxpayer uses outside suppliers to produce and print a catalog. The catalog is a loose-leaf, binder-type catalog that contains high quality color pictures of product groups and their accompanying price lists. The catalogs are sent by the printer to the Taxpayer, and the Taxpayer subsequently sends the catalogs, at no charge, to its representative dealers nationwide.
The price lists that are included in the catalog are separate from the product group pages so that the price lists can be updated without the necessity of replacing the entire catalog. Accordingly, the Taxpayer will send to its dealers annual updated price lists to replace the outdated price lists.
RULING
Code of Virginia § 58.1-609.6(4) provides an exemption from the tax for:
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- Catalogs, letters, brochures, reports, and similar printed materials, except administrative supplies, the envelopes, containers and labels used for packaging and mailing same, and paper furnished to a printer for fabrication into such printed materials, when stored for twelve months or less in the Commonwealth and distributed for use without the Commonwealth. (Emphasis added.)
This statute defines "administrative supplies" to include letterhead, envelopes, invoices, billing forms, payroll forms, price lists, and similar supplies. Accordingly, the "temporary storage" exemption available to catalogs and other printed materials is generally not available to price lists. However, and as set out in Title 23 of the Virginia Administrative Code 10-210-3010(H), there is an exception to this general rule. Administrative supplies are not taxable when they become an integral part of the exempt printed materials (such as catalogs). This same section specifically indicates that price lists that are enclosed within catalogs advertising tangible personal property for sale or resale are not taxable (provided that the catalogs are stored for twelve months or less in the Commonwealth and distributed for use without the Commonwealth).
Based on the above, the tax does not apply to those catalogs purchased by the Taxpayer and subsequently sent within twelve months to representative dealers outside Virginia. In making these exempt purchases, the Taxpayer may provide to its vendor a fully completed Certificate of Exemption, Form ST-10A. Further, the Taxpayer should have on file documentation clearly indicating what portion or percentage of the catalogs is exempt.
Conversely, the tax does apply to: (1) catalogs that will be sent to representative dealers within Virginia, and (2) catalogs that will be stored by the Taxpayer within Virginia for more than twelve months. Further, the tax does apply to the Taxpayer's purchase of all of the updated price lists that are separate from the catalogs and sent by the Taxpayer to representative dealers both within and without Virginia. These updated price lists are taxable "administrative supplies."
Finally, please bear in mind that the exemption addressed above is strictly limited to catalogs and certain other printed materials. As addressed in Public Documents 88-127(6/7/88) and 90-107 (7/9/90), the "temporary storage" exemption does not extend to other tangible personal property.
I hope that this information has answered your questions. If you need additional assistance, please contact ***** in the Office of Policy and Administration, Appeals and Rulings, at ***** @tax.state.va.us or at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
AR/31068Q
Rulings of the Tax Commissioner