Tax Type
Retail Sales and Use Tax
Description
Advertising brochures printed and mailed outside Virginia
Topic
Exemptions
Date Issued
03-21-2001
March 21, 2001
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will respond to your letter in which you seek correction of the retail sales and use tax audit assessment issued to******(the "Taxpayer") for the period of April 1996 through August 1999. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer operates a chain of retail department stores throughout Virginia. The Taxpayer was audited and assessed tax on advertising brochures that were: (1) printed by a printer located outside Virginia, (2) delivered by the out-of-state printer to an out-of-state mailing house, (3) delivered by the out-of-state mailing house to the United States Postal Service, and (4) ultimately delivered to customers of the Taxpayer throughout the United States, including Virginia. The auditor assessed tax on all advertising brochures that were delivered to the Taxpayer's customers in Virginia. The Taxpayer is taking exception to these items being taxed, based on the fact that the Taxpayer never took possession, used, consumed, or stored the items in question in Virginia.
DETERMINATION
Code of Virginia § 58.1-604 imposes a tax on the "use or consumption of tangible personal property in this Commonwealth, or the storage of such property outside the Commonwealth for use or consumption in this Commonwealth." The term "use" is defined in Code of Virginia § 58.1-602 as "the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business."
Based on the information you have provided to this office, I find that the Taxpayer does not exercise any right or power over the materials in question which would constitute use, consumption or storage subjecting such items to the provisions of the Virginia sales and use tax. All materials are printed outside Virginia and placed in the United States mail outside Virginia. This position is supported in Public Documents 85-35 (2/28/85) and 93-41 (3/4/93), copies enclosed. Therefore, with respect to advertising brochures, which were printed outside Virginia and mailed from outside Virginia via the United States Postal Service directly to Virginia customers, no use tax should have been assessed, and the audit will be adjusted accordingly.
I have also reviewed the ruling set forth in Public Document 98-79 (4/7/98) and have determined that it does not accurately reflect the department's policy regarding materials printed outside Virginia. Therefore, I hereby retract Public Document 98-79.
If you should have any questions, please contact **** in the Office of Tax Policy, at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/29916K
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will respond to your letter in which you seek correction of the retail sales and use tax audit assessment issued to******(the "Taxpayer") for the period of April 1996 through August 1999. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer operates a chain of retail department stores throughout Virginia. The Taxpayer was audited and assessed tax on advertising brochures that were: (1) printed by a printer located outside Virginia, (2) delivered by the out-of-state printer to an out-of-state mailing house, (3) delivered by the out-of-state mailing house to the United States Postal Service, and (4) ultimately delivered to customers of the Taxpayer throughout the United States, including Virginia. The auditor assessed tax on all advertising brochures that were delivered to the Taxpayer's customers in Virginia. The Taxpayer is taking exception to these items being taxed, based on the fact that the Taxpayer never took possession, used, consumed, or stored the items in question in Virginia.
DETERMINATION
Code of Virginia § 58.1-604 imposes a tax on the "use or consumption of tangible personal property in this Commonwealth, or the storage of such property outside the Commonwealth for use or consumption in this Commonwealth." The term "use" is defined in Code of Virginia § 58.1-602 as "the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business."
Based on the information you have provided to this office, I find that the Taxpayer does not exercise any right or power over the materials in question which would constitute use, consumption or storage subjecting such items to the provisions of the Virginia sales and use tax. All materials are printed outside Virginia and placed in the United States mail outside Virginia. This position is supported in Public Documents 85-35 (2/28/85) and 93-41 (3/4/93), copies enclosed. Therefore, with respect to advertising brochures, which were printed outside Virginia and mailed from outside Virginia via the United States Postal Service directly to Virginia customers, no use tax should have been assessed, and the audit will be adjusted accordingly.
I have also reviewed the ruling set forth in Public Document 98-79 (4/7/98) and have determined that it does not accurately reflect the department's policy regarding materials printed outside Virginia. Therefore, I hereby retract Public Document 98-79.
If you should have any questions, please contact **** in the Office of Tax Policy, at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/29916K
Rulings of the Tax Commissioner