Tax Type
Retail Sales and Use Tax
Description
Publishing and broadcasting; Subscription sales of used car guide
Topic
Taxability of Persons and Transactions
Date Issued
12-22-1995
December 22, 1995
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear****************:
This will respond to your letter seeking reconsideration of the department's determination letter of January 13, 1995 to your client, *********(the "Taxpayer"), in light of a recent Virginia Supreme Court ruling.
FACTS
The Taxpayer publishes a guide listing current market values of used cars that is sold on a subscription basis and at retail to the general public. It was audited and held liable for the tax on subscription sales of such guides. You continue to maintain that sales of the guide, on a subscription basis, qualify for exemption from the tax as an exempt publication under Code of Virginia§ 58.1-609.6(3) and point out the Virginia Supreme Court's decision in Lawrence W. Carr v. Department of Taxation, Record No. 940337, January 13, 1995, as supporting your contention.
DETERMINATION
Code of Virginia § 58.1-609.6(3) provides an exemption from the retail 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."
The department traditionally has relied on the definition of "publication" as upheld by the Virginia Supreme Court in Jefferson Publishing Co. v. W.H. Forst, 217 Va. 988, 234 S.E.2d 297 (1977), in determining whether various printed materials qualify as exempt publications. In Jefferson, the court defined "publication" as a "newspaper, magazine or other periodical which is available for general distribution to the public." The Virginia Supreme Court, in Carr, did not invalidate the Jefferson definition and thus the department continues to follow it.
Accordingly, upon reexamination of the issue the department finds that the guide falls under the above definition as a periodical available for general distribution to the public and meets the interval test provided in the statute. Subscription sales of such qualify for exemption from the tax; however, sales of the guide at retail will remain taxable.
The assessment will be revised to remove the subscription sales of the guide and a revised Notice of Assessment will be mailed to you shortly.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/9784H
Rulings of the Tax Commissioner