Tax Type
Retail Sales and Use Tax
Description
Bulletin of nonprofit industry association; Advertising space in a publication
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
03-14-1994
March 14, 1994
Re: Request for Ruling: Retail Sales and Use Tax
Dear**************
This will reply to your letter of June 29, 1993 in which you seek a ruling on the application of the tax to certain transactions conducted by *************** (the Association).
FACTS
The Association is a nonprofit organization which provides services to Virginia's construction industry. Included with the cost of membership in the Association is one copy of the weekly ***************(the Bulletin) which is produced in-house and which lists details about construction projects throughout the Commonwealth. Occasionally, members will request additional copies of the Bulletin for which the Association makes a charge, and you ask whether the sale of these additional copies is subject to the tax.
Also, the Association has been charging sales tax to firms that place advertisements in the Bulletin, and you inquire if this is a proper procedure.
DETERMINATION
Virginia Regulation (VR) 630-10-73 provides that the tax does not apply to the retail sale of newspapers, magazines or other publications and further defines an exempt publication to mean "any written compilation of information available to the general public."
I understand from a discussion you had with a member of my staff that the Bulletin is not available to the general public, but rather only to members. Therefore, the sale of the Bulletin is not the sale of an exempt publication as defined above, and the Association is required to charge and collect sales tax on additional copies sold to members.
However, the tax does not apply to the sale of advertising space in the Bulletin. Va. Code §58.1-603 imposes the tax on "every person who engages in the business of selling at retail or distributing tangible personal property..." Because the sale of advertising space is not the sale of tangible personal property, such sales are exempt.
As required by VR 630-10-24(C), the Association must remit to the department any taxes erroneously collected unless it can be shown that the tax was returned to the customer. Also, see the enclosed VR 630-10-89 concerning refunds of erroneously collected taxes.
I trust this information answers your concerns, but please contact the department if you need additional information.
Sincerely,
Danny M. Payne
Acting Tax Commissioner
OTP/7158I
Rulings of the Tax Commissioner