Tax Type
Retail Sales and Use Tax
Description
Mailing lists
Topic
Taxability of Persons and Transactions
Date Issued
09-11-1989
September 11, 1989
Re: §58.1-1821 Application/Sales and Use Tax
Dear****************
This will reply to your letter of May 15, 1989 in which you seek relief of sales and use tax assessed to the*********** as the result of a recent audit. Your letter is being treated as an appeal under Virginia Code §58.1-1821.
FACTS
************* (the "Taxpayer"), a provider of services to law firms, was audited and held liable for its failure to pay/directly remit the applicable tax on certain of its recurring expense purchases - mailing lists purchased from the Virginia Bar Association.
The Taxpayer contends that the true object of the transaction is to secure a service and that the tangible personal property involved, computer paper, is an inconsequential element of the transaction. The Taxpayer argues that the tangible personal property which is transferred as part of the service, the computer paper with names and addresses printed in mailing label format, is not critical to the transaction.
DETERMINATION
Virginia Code §58.1-608(5)(a) provides an exemption from the sales and use tax for "[p]rofessional, insurance, or personal service transactions which involve sales as inconsequential elements for which no separate charges are made." In a ruling letter dated May 28, 1985 (copy enclosed), it was determined that mailing and telephone lists that are specially designed ("customized") to a particular client's needs are exempt from the tax as the true object of such a transaction is the acquisition of the services of the seller. Mailing lists not customized to a buyer's specifications, however, are subject to the tax as the production of such lists by the seller does not involve a special service element.
An examination of the instant case and sample listing provided by the Taxpayer reveals no uniqueness to the mailing lists purchased by the Taxpayer. The listing appears to be a standard list with no specific modifications, thus no special services are being provided to the Taxpayer.
Based on the foregoing, I find no basis for correction of the assessment.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner