Tax Type
Retail Sales and Use Tax
Description
Manufacturing, processing, assembling, or refining; Publishing equipment, supplies, and printing
Topic
Taxability of Persons and Transactions
Date Issued
03-29-1996
March 29, 1996
Re: Request for Ruling: Retail Sales and Use Tax
Dear****************
This will reply to your letter seeking a ruling on the tax status of sales of newsletters and various purchases made in producing the newsletters by your client, ******* (the "Taxpayer").
FACTS
The Taxpayer produces newsletters, which are educational in nature, on a regular basis for sale in Virginia and throughout the United States. The Taxpayer has not been collecting the tax on the sale of the newsletters but has been paying sales tax on all purchases associated with its business, including purchases used directly in producing the newsletter.
You request a ruling on the proper application of the sales and use tax to the Taxpayer's operations.
RULING
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, and advertising supplements and any other printed matter ultimately distributed with or as part of such publications, except that newsstand sales of the same are taxable." A publication is defined as "a newspaper, magazine or other periodical which is available for general distribution to the public." Jefferson Publishing Corporation v. W.H. Forst. State Tax Commissioner. 217 Va. 988, 234 S.E.2d 297 ( 1977)
Sales of newsletter
Based on the information provided, the newsletter is a publication as defined in Jefferson and satisfies the criteria in Code of Virginia § 58.1-609.6(3). The newsletter is available for general distribution to the public and meets the interval test provided in the statute. Therefore, subscription sales of the newsletter qualify for exemption from the tax. However, sales of the newsletter at retail are subject to the tax.
Purchases associated with newsletter
Code of Virginia § 58.1-609.3(2)(v) provides that the retail sales and use tax does not apply to equipment, printing or supplies used directly to produce a publication described in § 58.1-609.6(3), whether the publication is ultimately sold at retail or for resale or distribution at no cost. Because the newsletter satisfies the publications exemption criteria, the printing and supplies used to produce the newsletter may be purchased exempt of the tax.
In addition, because the publications exemption extends to advertising inserts or supplements and other printed matter distributed with or as a part of a nontaxable publication, rate and postal cards printed for distribution with the newsletter, and envelopes and labels used in mailing the newsletter, may also be purchased exempt of the tax. However, administrative supplies such as renewal notices/reply cards not distributed with or as a part of the newsletter are taxable. See P.D. 92-35 (4/23/92), copy enclosed.
If you have any questions regarding this ruling, you may contact ***at *** .
Sincerely
Danny M. Payne
Tax Commissioner
OTP/9564F
Rulings of the Tax Commissioner