Tax Type
Retail Sales and Use Tax
Description
Photographs
Topic
Exemptions
Date Issued
12-23-1985
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December 23, 1985
Re: §58.1-1821 Application/Sales and Use Tax
Dear ****
This will reply to your letter of September 24, 1985, in which you submit an application for correction of sales and use tax assessed to the ***** as the result of a recent audit.
FACTS
A recent audit of the ***** (Taxpayer) produced an assessment for its failure to remit the sales and use tax on purchases of photographs used to advertise the products of its Furniture Division. Each of the photographs in question pictures a product line of the taxpayer and includes the name and identification number of the line as well as the identification number, size, and description of each piece in the furniture line. Reproduced in bulk from an original, the photographs are furnished to the taxpayer's salesmen for use in marketing the taxpayer's products.
The taxpayer contests the assessment, asserting that the photographs in question are exempt from the tax as "printed advertising materials" under Section 630-10-18.1 of the Virginia Retail Sales and Use Tax Regulations.
DETERMINATION
Section 58.1-608.30 of the Code of Virginia exempts the following items from the sales and use tax:-
- Catalogs and other printed materials used in the advertising of tangible personal property for sale, the envelopes, containers and labels used for packaging and mailing same, and paper furnished to a printer for fabrication into catalogs and other printed materials used in advertising tangible personal property for sale, when stored for twelve months or less in the Commonwealth and distributed for use without the Commonwealth.
As stated in Section 630-10-18.1 of the Virginia Retail Sales and Use Tax Regulations, the above exemption is not met unless "materials meet all three of the following conditions:
1. The materials will be stored in Virginia for less than 12 months;
2. The materials will be distributed for use outside Virginia; (and)
3. The materials will be used for advertising the sale of tangible personal property.
The photographs in question are used by the taxpayer's salesmen in conjunction with catalogs in the advertising of furniture for sale and are printed materials similar in nature to catalogs, brochures, and leaflets, which are deemed to be nontaxable under Regulation 630-10-18.1. Therefore, the photographs are exempt from the tax to the extent that they are used outside of Virginia after storage here for twelve months or less. Upon the determination of the percentage of photographs used in an exempt manner, the assessment issued to the taxpayer will be revised.
Sincerely,
W. H. Forst
Tax Commissioner -
Rulings of the Tax Commissioner