Tax Type
Retail Sales and Use Tax
Description
Publishing and broadcasting; Microfiche document summary
Topic
Taxability of Persons and Transactions
Date Issued
07-23-1993
July 23, 1993
Re: §58.1-1821 Application: Retail Sales & Use Tax
Dear***************
This will respond to your appeal letter of May 25, 1993 in which you seek a ruling regarding the applicability of the retail sales and use tax to sales by *****(the "Taxpayer") of ****** Microfiche to Virginia customers. Since this ruling impacts an outstanding assessment, I feel it is more appropriate to treat this as application for correction for erroneous assessment under Va. Code § 58.1-1821.
FACTS
The Taxpayer produces a microfiche (the "Microfiche") which contains the full text of all documents summarized in its weekly magazine. The magazine, however, contains articles and news which are not part of the microfiche. Each microfiche document has its own reference number which is published in the magazine. Subscribers typically receive the microfiche in the same envelop as the magazine. The department has previously held that the magazine qualifies as an exempt publication under Va. Code §58.1-608( A) (6) (c).
You seek a ruling as to whether sales of the Microfiche, which were previously held taxable in an audit of the Taxpayer for the period November 1987 through September 1990, are subject to the tax.
DETERMINATION
Va. Code §58.1-608(a)(6)(c) provides an exemption from the sales and use tax for:
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- Any publication issued daily, or regularly at average intervals not exceeding three months, and advertising supplements and any other printed matter ultimately distributed with or as a part of such publications, 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.
The department ruled in P.D. 92-233 (11/9/92), copy enclosed, that certain periodicals such as Moody's Public Utility, West's Pacific Reporter, Federal Supplement, Federal Reporter, and the Fourth Circuit Review fall within the category of general reference materials and thus are taxable. Further, it was explained that federal codes, regulations, and similar materials are taxable.
From the information provided, it appears that the Microfiche is a compilation of court decisions, regulations, various research reports, etc. reference materials which, if sold separately, would be taxable. Furthermore, the Microfiche is not similar to newspapers, magazines, or other printed publications which qualify for the exemption. Thus, I find that the Microfiche is subject to the tax.
Accordingly, as discussed during a meeting with members of my Tax Policy staff on March 16. 1993, I will agree to remove from the audit assessment the tax erroneously assessed on sales of exempt publications by the Taxpayer. However, that portion of the assessment relating to sales of the Microfiche will remain. It is my understanding that the Taxpayer now concedes that sales of The Tax Directory are subject to the tax.
Once the assessment is revised, a refund will be issued to the Taxpayer. Furthermore, once the Taxpayer submits the additional information discussed during the March 16, 1993 meeting regarding the use tax assessment for the period June 1987 through September 1990, anticipate resolving all matters relating to that assessment administratively.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/7009H
Rulings of the Tax Commissioner