Tax Type
Retail Sales and Use Tax
Description
Electronic information services
Topic
Taxability of Persons and Transactions
Date Issued
12-27-1988
December 27, 1988
Re: Request for Ruling: Sales and Use Tax
Dear******************
This will reply to your letter of November 17, 1988 in which you request a ruling regarding the applicability of Virginia sales and use tax to one of your clients.
FACTS
Your client, a Maryland corporation, intends to provide a communications network for a clearing house data base and an electronic message system to subscribers in Virginia and elsewhere. The primary feature of the network will be the supply (sale) of electronic information via a computer to subscribers and users of the system. No equipment will be sold or placed with the subscribers as part of the subscription fee and/or on-line user charges. You request a ruling as to whether the charges by your client to Virginia subscribers are subject to the Virginia sales and use tax.
RULING
Based upon the information you have presented, the charge for the supply of electronic information to customers in Virginia represents the charge for a service. Therefore, these charges are exempt from the tax under §58.1-608(2) of the Code of Virginia and Virginia Regulation 630-10-97.1 (copy enclosed).
This ruling assumes that no tangible personal property will be sold, leased or otherwise furnished to customers in connection with the service provided by your client. Thus, the application of the tax to your client may be affected in the event that these facts change.
If you have further questions regarding the application of the tax to your client, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner