Tax Type
Retail Sales and Use Tax
Description
Government transactions; Political subdivisions
Topic
Taxability of Persons and Transactions
Date Issued
11-10-1994
November 10, 1994
Re: Request for Ruling: Retail Sales and Use Tax
Dear**************
This will reply to your letter of September 12, 1994 in which you seek assistance regarding the application of the sales and use tax on sales made by the************* (the Taxpayer).
FACTS
It was recently determined that the Taxpayer, a political subdivision of the Commonwealth of Virginia, was responsible for collecting the tax on sales of tangible personal property. The Taxpayer requests a ruling on the application of the tax to the sale of certain items.
RULING
The application of the tax to sales made by the Commonwealth and its political subdivisions is governed by Virginia Regulation (VR) 630-10-45(D). This regulation indicates that sales of tangible personal property and taxable services by state and local governments are taxable, except for certain specifically exempt items such as official flags and school lunches and textbooks. The regulation further indicates that the sale of copies of official documents or records by the Commonwealth and its political subdivisions are not taxable.
The department has not defined what constitutes "official documents or records." As a general rule, such documents or records are those sold by a government entity and which are not normally available from other sources. In this way, sales by government entities are not in direct competition with sales of those same items by private businesses which are required to collect the tax.
However, as indicated in VR 630-10-45, the sale by state and local government entities of books, publications and similar documents are subject to the tax.
Accordingly, each of the categories about which you inquire are addressed as follows:
Sales related to freedom of information requests: Lists of salaries paid to county employees; reports on police department turnover; copies of building permits, building inspections and real estate transactions; and minutes of the board of supervisors' meetings are deemed to be the sale of official records. Accordingly, no tax is charged on the sale of these items. However, the sale of aerial photographs showing subdivision lines, water lines, etc. are taxable.
Copies of computer files: Copies of tax maps, county ordinances and copies of publications prepared by the county are taxable when they are provided to customers in any tangible format, including computer tape or diskette.
Sale of library books: Taxable.
Faxed copies: In prior rulings the department has determined that fax transactions are exempt from the tax.
Hard copy of library bibliographic records: In this transaction patrons of the Taxpayer's libraries request hard copies of portions of the computerized card file index to aid them in research activities. Pursuant to VR 630-10-65.3, sales of microfilm and microfiche copies of documents are the taxable sales of tangible personal property. Since the card file information is not an official document or record, these sales, like the sale of library books, are taxable.
Charges for computer system phone costs: Exempt, since these transactions generally do not involve any transfer of tangible personal property.
Canteen sales: The department has previously determined that canteen sales made by state-run correctional facilities are taxable but that the items purchased for resale may be purchased exempt of the tax using a Resale Certificate of Exemption, Form ST-10.
In the instant case, however, the yearly volume of sales to the 12 residents of the youth home and to the 100 or so inmates of the county prison is negligible. Accordingly, the Taxpayer may continue making such sales exempt of the tax so long as it agrees to pay the tax on the purchase of the canteen items.
Special services and reports: Charges to insurance companies and others for fingerprint records, accident reports and similar information are exempt since these items are deemed official documents and records.
Furthermore, any sales to other government entities of the Commonwealth and its political subdivisions are generally exempt provided that the sale is made pursuant to official purchase orders and paid for with public funds. However, when a taxable sale does occur, the tax applies to the total charge, including charges for materials sold and for the time required to produce and develop the product. However, separately stated delivery or mail charges are not taxable. See VR 630-10-95 on what elements are included or excluded from the sales price of tangible personal property.
I trust that the enclosed Virginia Retail Sales and Use Tax Regulations and the above information are helpful. Please contact***************you have any questions regarding this letter.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/8532I
Rulings of the Tax Commissioner