Tax Type
Retail Sales and Use Tax
Description
Publishing and broadcasting; Cable television guide
Topic
Taxability of Persons and Transactions
Date Issued
09-19-1997
September 19, 1997
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will reply to your letter of April 18, 1997, in which you seek correction of a sales and use tax assessment issued to ********** (the Taxpayer) for the period October 1992 through September 1995.
FACTS
The Taxpayer is the operator of a cable television system. At issue is the tax assessed on the Taxpayer's monthly cable program guide. Based on the information provided, the Taxpayer charges its subscribers a monthly fee which includes the cost of the monthly cable service and one copy of the cable program guide. The subscriber may also purchase additional copies of the cable program guide for $1.00 per issue. The Taxpayer indicates that copies of the cable program guide are also placed in lobbies of apartment complexes, distributed free of charge at local festivals and events, and can be picked up at the local offices of the Taxpayer.
The Taxpayer maintains that the cable program guide qualifies as an exempt publication under Code of Virginia § 58.1-609.6(3). The Taxpayer cites Lawrence Carr, Jr., v. W.H. Forst, Tax Commissioner, 249 Va. 66, 453 S.E.2d 274 (1995) to further support its position that the cable program guide qualifies as an exempt publication.
DETERMINATION
Code of Virginia § 58.1-609.6(3) exempts from the retail sales and use tax "[a]ny publication issued daily, or regularly at average intervals not exceeding three months.... 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 5.E.2d 297(1977).
In Carr, the court ruled that a real estate magazine qualified as an exempt publication because the magazine was available for general distribution to the public and met the interval test provided in the statute. The real estate magazines were distributed in stores and other locations and available to the general public free of charge.
Based on the information provided in your letter and by the auditor, the cable program guide is a publication as defined in Jefferson and satisfies the criteria in Code of Virginia § 58.1-609.6(3). The cable program guide is distributed monthly to its cable subscribers free of charge and meets the interval test provided in the statute. The cable program guide is also available at various sites to non-subscribers at no cost. Accordingly, the cable program guide qualifies as an exempt publication under the statute and regulation and is exempt from the tax. However, sales of extra cable
program guides to subscribers are subject to the tax. The Taxpayer is required to collect and remit the sales tax on these sales.
This determination is consistent with the policy set forth in prior rulings. In Public Document (P.D.) 95-222 (8/29/95), the department ruled that a newspaper published by the taxpayer and distributed bimonthly to its association members free of charge qualified as an exempt publication. However, newspapers sold to non-members for $1.00 per issue were subject to the tax. In P.D. 88-258 (9/21/88), the department ruled that magazines distributed weekly to members of professional organizations and others qualified as exempt publications as set forth in Code of Virginia § 58.1-609.6(3).
The audit will be returned to the********* District Office for revisions in accordance with this determination. The Taxpayer will receive a revised bill with updated interest. This bill should be paid within 30 days to avoid the accrual of additional interest.
If you have any questions concerning this determination, please contact*****in the Office of Tax Policy at ******** .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12469T
Rulings of the Tax Commissioner