Tax Type
Retail Sales and Use Tax
Description
Taxpayer denied an exemption sales and use tax for the purchase of a catalog stand
Topic
Exemptions
Property Subject to Tax
Date Issued
06-18-2008
June 18, 2008
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This is in response to your letter submitted on behalf of ***** (the "Taxpayer") in which you request reconsideration of the Department's prior determination issued to the Taxpayer. I apologize for the delay in responding to your letter.
FACTS
In a determination letter dated August 17, 2007, the Department denied the Taxpayer an exemption from the retail sales and use tax for the purchase of a catalog stand. The Taxpayer has provided a picture of a catalog stand and requests that the determination with respect to the catalog stand be overturned. In an e-mail to the audit staff, the Taxpayer also requests reconsideration with respect to the determination made regarding the Taxpayer's planner guides.
DETERMINATION
Catalog Stand
The picture of the catalog stand provided with the Taxpayer's reconsideration request is different from the one at issue in the audit. The catalog stand at issue in the audit is described as "a black easel." Based on this discrepancy, the audit staff contacted the Taxpayer for clarification. It was determined that the incorrect picture had been included with the Taxpayer's reconsideration. The Taxpayer provided a picture of the correct catalog stand for review with its reconsideration. Additionally, based on further conversation with the audit staff, the Taxpayer indicated that the catalogs used with the catalog stand are bound booklets. The Taxpayer further indicated that the catalog stand is used to prevent removal of the catalogs from the stores in which they are used.
In Public Document (P.D.) 98-97 (5/20/98), the taxpayer was assessed tax on the purchase of point-of-purchase displays. Each display consisted of a frame that supported and displayed printed graphics describing the taxpayer's products, pockets to hold printed brochures, product information tear sheets, and a window unit. The Tax Commissioner determined that the display racks were exempt because the printed materials could not be displayed without some means of support.
Based on the information provided, the Taxpayer's catalogs do not require the support of the catalog stand to be displayed. Unlike the point-of-purchase displays in P.D. 98-97, the catalogs can be displayed without means of support. The catalogs are bound and do not have to be secured to the catalog stand for support while being displayed. In order for the exemption to apply, the display (i.e., the catalog stand) must provide support for the printed materials. That is not the case in this instance. Accordingly, the ruling in my prior determination stands.
Planner Guides
The Taxpayer contends that pursuant to P.D. 98-97, the planner guides are exempt of the tax. The Taxpayer contends that the planner guides have its company logo printed on them and should be treated like the note pads in P.D. 98-97 for retail sales and use tax purposes.
In the prior determination, pursuant to Title 23 of the Virginia Administrative Code 10-210- 3010 H, the planner guides were deemed to be an administrative tool, not used "for external promotional purposes." The Taxpayer has not provided any additional information to support that the planner guides are used for other than an administrative tool. Accordingly, the ruling in my prior determination stands.
CONCLUSION
After carefully reviewing the information provided and the audit report, I find there is no basis to revise my prior determination. Accordingly, the assessment is correct as issued with regard to the catalog stand and planner guides. This letter is my final determination on this matter. If you have any questions about this response, you may contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-1835583137.P
Rulings of the Tax Commissioner