Tax Type
Retail Sales and Use Tax
Description
Nexus; Out-of-state vendors; Mail order photography
Topic
Taxability of Persons and Transactions
Date Issued
06-18-1997
June 18, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Dear*****************
This will reply to your letter in which you seek a determination if **********(the "Taxpayer") has nexus in Virginia for sales and use tax purposes.
FACTS
The Taxpayer is a photography business located in another state that specializes in the sale of high school and college graduation photographs. The Taxpayer sends its own employees or hires independent photographers to shoot photographs of graduation events in Virginia. The film is then sent to another state for processing. Photographic proofs and order cards are then mailed to Virginia customers from the Taxpayer's home state to solicit orders for photographs. The Taxpayer is currently registered with the department and has been collecting and remitting use tax since 1993.
RULING
Although the Taxpayer is clearly a "dealer" as defined in Code of Virginia § 58.1-612(B) (copy enclosed), the Taxpayer must also have sufficient activity within Virginia as set out in Code of Virginia § 58.1-612(C) before it would be required to register for collection and remittance of the use tax. The fact that the Taxpayer sends its employees into Virginia to shoot photographs does not, by itself, create nexus with Virginia. If the Taxpayer's photographers solicit sales while in Virginia, nexus is created. In this case, all solicitations are made through the mail.
The facts presented by the Taxpayer indicate that sufficient nexus does not exist with Virginia to require it to collect and remit use tax. The Taxpayer does not meet any of the nexus criteria found in Code of Virginia § 58.1-612(C). The Taxpayer should be aware that a change in its Virginia business activities could alter this ruling. The Taxpayer may wish to continue collecting use tax as a courtesy to its customers since the customers would be liable for consumer use tax on purchases of photographs from the Taxpayer.
If you have additional questions concerning this matter, please contact *********** in the Office of Tax Policy at***************
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/11918S
Rulings of the Tax Commissioner