Tax Type
Retail Sales and Use Tax
Description
Printing
Topic
Taxability of Persons and Transactions
Date Issued
09-28-1984
September 28, 1984
Re: §58-1118 Application/Sales & Use Tax
Dear *****
This will refer to our meeting of April 19, 1974 in which the sales and use tax audit assessment issued to was discussed. I apologize for the delay in responding to you since our meeting.
As noted in our meeting, I feel that the department's interpretation of the Retail Sales and Use Tax Act is correct in this case. § 58-441.6(r) of the Code of Virginia exempts the delivery of tangible personal property to purchasers outside of Virginia; however, it is the department's position that delivery of the items produced by ***** occurred in Virginia. This position is based upon several Virginia Supreme Court opinions and represents the consistent policy of the department as applied in several cases analogous to this one. Therefore, I cannot find any basis for granting relief in this case.
In addition to support from various Virginia Supreme Court opinions, the department's position is supported strongly by a recent New Jersey court opinion in the matter of Hoffman-LaRoche, Inc. vs. Taxation Division Director (1983). In that case, the New Jersey Tax Court and the New Jersey Superior Court affirmed the imposition of the use tax upon the purchaser of printed materials who directed that such materials be shipped to a New Jersey mailing house. The courts in essence held that the constructive delivery of printed materials to the purchaser constituted a sufficient "use" of the printed materials within New Jersey to allow the imposition of the tax.
My research subsequent to our meeting reveals that jurisdictions bordering on Virginia present a somewhat different sales and use tax environment for printers like ***** which also contract for the delivery of printed matter through the mails. The District of Columbia Department of Finance has not deemed such transactions taxable under its law when printed matter is mailed to persons outside the District. However, mailing services are taxed by the District under a 1980 law change. Also, North Carolina has exempted such transactions from tax since 1983 when its legislature enacted a statute specifically granting relief to printers such as *****. On the other hand, conversations with Maryland tax officials revealed that printers such as ***** would be treated for sales and use tax purposes there in substantially the same manner as in Virginia, with an exemption only for mail order catalogs and direct mail advertising literature.
In the majority of cases, the differential tax treatment afforded by other jurisdictions is the result of statutory language which differs from that found in Virginia law. Thus, I feel that Virginia's position is mandated by our statutes and case law. However, I remain willing to review any legislation which the printing industry may seek to address this problem.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner