Tax Type
Retail Sales and Use Tax
Description
Stock market and financial information provided via computer terminals
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
10-17-1986
October 17, 1986
Dear ********************
This will reply to your letter of July 28, 1986, in which you wish to determine the application of the sales and use tax to certain transactions involving the provision of stock market quotation and financial news information.
As noted in your letter, your business provides stock market and financial information via computer terminals located in customers' offices. The customer either leases the computer terminals from your business or provides his own terminals. The provision of stock quotation service is addressed specifically in Virginia Regulation 630-10-101.2, a copy of which is enclosed. The regulation specifically provides that "[c]harges to stockbrokers for stock quotation services which provide for the transfer of stock information via electronic media are not subject to the tax."
Based on the foregoing, the actual provision of stock market or financial data to your customers is a nontaxable service. Similarly, the leasing of computer hardware in this case is an inconsequential element of the overall service transaction and is exempt from the tax under Virginia Regulation 630-10-97.1, a copy of which is also enclosed. of course, as the provider of this service, your business will itself be required to remit the use tax on any terminals provided to customers or other tangible personal property used in Virginia to provide the service.
Lastly, I have enclosed copies of Virginia Regulations 630-10-62.1 (Maintenance contracts and warranty plans) and 630-10-90 (Repair businesses). In general, when repairs or maintenance are performed with respect to computer hardware leased by your business in connection with the provision of stock quotation service, all charges will be nontaxable to the customer. However, when repairs or maintenance are provided with respect to customer owned equipment, the charges will be taxable. Under Virginia Regulation 630-10-90, separately stated repair labor charges may be excluded from the tax base. In the case of maintenance agreements that provide for the provision of repair or replacement parts though, the entire charge for the contract is taxable under Virginia Regulation 630-10-62.1.
If any further questions arise, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner