Tax Type
Retail Sales and Use Tax
Description
Printing purchases by advertising businesses
Topic
Taxability of Persons and Transactions
Date Issued
05-13-1987
May 13, 1987
Re: Ruling Request/ Sales and Use Tax
Dear *****************
This will reply to your letter of April 8, 1987 seeking information on the correct application of the sales and use tax to purchases of printing by advertising businesses.
FACTS
Specifically you ask whether the exemption found in §58.1-608(30) of the Code of Virginia for "catalogs...and similar printed materials...when stored for twelve months or less in the Commonwealth and distributed for use [outside] the Commonwealth", applies to purchases of printing by advertising businesses.
RULING
Section 58.1-608(57) of the Code provides an exemption from the sales and use tax for "advertising" which is defined in §58.1-602(23) as, "the planning, creating, or placing of advertising in newspapers, magazines, billboards, broadcasting or other media, including without limitation, the providing of concept, writing, graphic design, mechanical art, photography and production supervision." However, this section continues that "[a]ny person providing advertising as defined herein shall be deemed to be the user or consumer of all tangible personal property purchased for use in such advertising." (Emphasis added)
Accordingly, the department's recently revised Sales and Use Tax Regulation §630-10-3 governing advertising provides in subsection (2) (B) (2) that the tax applies to purchases by an advertising business of "printing, including direct mail items, ... brochures, ... and similar printed materials whether or not any of such materials are intended for distribution out of state."
Therefore, the exemption granted in §58.1-608(30) of the Code does not apply to purchases by an advertising business of printed materials even when they are to be stored in Virginia for twelve months or less and distributed for use outside Virginia, based on the last sentence of §58.1-602(23) which deems advertising businesses to be the taxable users and consumers of all tangible personal property used in connection with the creation of advertising.
I hope that the foregoing has responded to your question but please let me know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner