Tax Type
Retail Sales and Use Tax
Description
Magazine subscription sales by catalog company
Topic
Exemptions
Date Issued
10-21-1992
October 21, 1992
Re: Request for Ruling: Retail Sales & Use Tax
Dear*************
This will reply to your letter of February 5, 1992 in which you seek a ruling on the applicability of the retail sales and use tax to certain services offered by********** (the "Taxpayer").
FACTS
The Taxpayer will broker the selling of magazine subscriptions through catalog companies and/or direct marketing companies for publishers. The catalog company or direct marketer will then sell magazine subscriptions to the purchasers of their products or services. You seek a ruling as to who is responsible for the collection of the tax on the sales of the subscriptions in the above manner.
RULING
Va. Code §58.1-608(A)(6)(c) provides an exemption from the sales and use tax for "[a]ny publication issued daily, or regularly at average intervals not exceeding three months,...except that newsstand sales of the same are taxable." Virginia Regulation (VR) 630-10-73 defines "publication" as "any written compilation of information available to the general public" and provides that the term does not include general reference materials and their periodic updates. Magazines or publications available only to a restricted or limited audience are not deemed to be available to the general public and thus are taxable.
Accordingly, all subscription sales of publications meeting the above requirements by anyone are nontaxable.
However, in the case of materials not meeting the above requirements, e.g., books and general reference materials, it would be the responsibility of the direct marketer or cataloger which sells the subscriptions to collect and remit the tax. From the information provided, it appears that the Taxpayer would not have any sales and use tax responsibilities since it is merely providing a brokering service for the publisher. However, if it steps beyond the provision of a service and actually sells tangible personal property it would be responsible for the collection and remittance of the tax.
Va. Code §58.1-612 provides the criteria for determining whether a dealer has sufficient activity with Virginia to require registration. If the direct marketer or cataloger is not subject to registration under the nexus requirements, the purchasers of the taxable publications would be required to remit the use tax to the department directly.
I have enclosed copies of the cited Code section for your information and hope the foregoing has responded to you inquiry. If you have additional questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/5950H
Rulings of the Tax Commissioner