Tax Type
Retail Sales and Use Tax
Description
Services; Fax Services
Topic
Taxability of Persons and Transactions
Date Issued
08-30-1991
August 30, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear******************
This will reply to your letter of July 20, 1991 in which you (the Taxpayer) request a ruling on the applicability of sales and use tax to the transmission of information via facsimile (fax) technology.
FACTS
The Taxpayer requests a ruling with respect to the application of the sales and use tax to charges for the transmission and/or reception of fax documents.
RULING
Virginia Regulation (VR) 630-10-97.1(B)(2) (copy enclosed) applies the true object test to determine if a transaction which involves the rendering of a service and the provision of tangible personal property constitutes an exempt service or a taxable sale. The true object in this instance is to secure the service of transmitting and/or receiving documents (typically by individuals and businesses not owning fax machines) and the tangible personal property furnished is incidental to the service provided. Thus, as the object of the transaction is the provision of a service and not the sale of tangible personal property, the tax would not apply.
However, it should be noted that if the vendor, in addition to providing the fax service, charges for copies of a fax document, then these copies constitute tangible personal property and would be subject to the tax. The exempt service charge must be separately stated from the taxable charge, otherwise the entire transaction is subject to the tax. I have enclosed a previous ruling letter, PD 90-218 (12/11/90) which addresses the application of the sales and use tax in an analogous situation, the sale of copies of word processing documents.
If you have any further questions, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner