82-8 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Systems providing stock quotations.

Topic

Exemptions

Taxability of Persons and Transactions

Date Issued

01-25-1982

January 25, 1982

Re: §58-1118 Application/Sales and Use Tax

Dear**************:

This will reply to your letter of December 29, 1978 in which you apply for correction of use tax assessed against your client,

Facts

********** is a stock brokerage firm. In connection with the provision of their brokerage services, subscribes to the *********and ******** stock quotation services. Both of these are systems used by brokers to obtain current and continual stock quotations. A lump sum charge is made for the entire system which consists of a receiver or terminal located in the brokers office on which information is received and a computer located outside Virginia from which the information is received. The information may be received via the terminal screen or a print-out of the information may be received.

********* also obtains broker accounting and bookkeeping services from******* and ******. In these transactions, information on a broker's daily transactions is fed into a terminal, located in his office, and received by a computer located outside Virginia. This information is compiled, organized, and replayed in a format designed for the broker, either via the terminal in the office, by printout in the office, or by printout mailed to the broker.

Determination

Virginia Code § 58-441.6(a) exempts from the sales and use tax:

- Professional, insurance, or personal service transactions which involve sales as inconsequential elements for which no separate charges are made...

We have determined that the charges for****** and ******stock quotation systems constitute charges for a transaction, the true nature of which is the service of providing stock quotations. Therefore these charges are exempt from the sales and use tax under Virginia Code §58-441.6(a).

Similarly, the charges made by ****** and ******** for original copies of the broker's bookkeeping data will not be subject to the tax. However, it should be noted that additional copies of ledgers, accounting forms, etc., furnished by these services will be subject to the tax.

********** and ********* and *********volumes do not meet the test of a "publication" for the sales and use tax; exemption under Virginia Code § 58-441.6(k) which exempts:

- Any publication issued daily, or regularly at average intervals not exceeding three months...

The charge for these volumes is a lump sum charge for the annual volume and the periodic updates. While the updates may be published with enough frequency to qualify under § 58-441.6(k), they are not in themselves publications and are inseparable in function from the annual volume. The entire volume and periodic supplements constitute a reference book which does not qualify as a "publication" as the term is intended under Virginia Code § 58-441.6(k). Therefore, charges for these volumes, including updates, are subject to the tax.

Your audit will be adjusted to reflect the foregoing determinations. If you have any questions, please let us know.

Sincerely,

W. H. Forst
State Tax Commissioner

Rulings of the Tax Commissioner