Tax Type
Retail Sales and Use Tax
Description
Photography
Topic
Taxability of Persons and Transactions
Date Issued
10-08-1998
October 8, 1998
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This will reply to your letter in which you request a ruling regarding the application of the retail sales and use tax to photographic film and photocopies used in media advertising. You have also filed a protective claim requesting a refund of taxes paid on these items. I apologize for the delay in responding to your letter.
FACTS
***** (the ``Taxpayer') is a Virginia corporation whose principal activity is media and non-media advertising. The Taxpayer specializes in complete marketing programs for national and international firms. The Taxpayer self-assessed use tax on purchases of photographic film and photocopies used in specific media advertising campaigns. After reviewing the applicable statute and regulations, the Taxpayer believes the purchase of film and photocopies constitutes the purchase of photography by an advertising agency for use in a specific media advertising campaign and is, therefore, exempt. The Taxpayer is requesting a refund of all self-assessed use tax on photographic film and photocopies.
RULING
Virginia Administrative Code (VAC) 10-210-41.B, copy enclosed, addresses purchases made by advertising agencies and provides that ``advertising businesses are engaged in providing professional services and are the users and consumers of all tangible personal property purchased for use in such businesses.' This regulation further explains that the tax applies to all purchases by an advertising business of concept, writing, graphic design, mechanical art, and photography not made pursuant to the development of a specific advertising campaign. For example, if an advertising business purchases scenic photographs of Virginia for possible use in future advertising campaigns, the purchase of such photographs will be subject to the tax.
As provided above, an advertising business is the user and consumer of tangible personal property it uses in providing its services. This would include the purchase of photographic film and photocopies. Charges to create and produce photography for specific media campaigns are not taxable because these activities constitute exempt media advertising services (see P.D. 98-51 enclosed). However, purchases of film and photocopies for use in specific media advertising campaigns do not constitute the provision of advertising services. For these reasons, I find that the purchases of photographic film and photocopies by the Taxpayer are taxable.
Accordingly, I must deny your protective claim for refund. If you have any questions concerning this ruling, please contact ***** Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12990K
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This will reply to your letter in which you request a ruling regarding the application of the retail sales and use tax to photographic film and photocopies used in media advertising. You have also filed a protective claim requesting a refund of taxes paid on these items. I apologize for the delay in responding to your letter.
FACTS
***** (the ``Taxpayer') is a Virginia corporation whose principal activity is media and non-media advertising. The Taxpayer specializes in complete marketing programs for national and international firms. The Taxpayer self-assessed use tax on purchases of photographic film and photocopies used in specific media advertising campaigns. After reviewing the applicable statute and regulations, the Taxpayer believes the purchase of film and photocopies constitutes the purchase of photography by an advertising agency for use in a specific media advertising campaign and is, therefore, exempt. The Taxpayer is requesting a refund of all self-assessed use tax on photographic film and photocopies.
RULING
Virginia Administrative Code (VAC) 10-210-41.B, copy enclosed, addresses purchases made by advertising agencies and provides that ``advertising businesses are engaged in providing professional services and are the users and consumers of all tangible personal property purchased for use in such businesses.' This regulation further explains that the tax applies to all purchases by an advertising business of concept, writing, graphic design, mechanical art, and photography not made pursuant to the development of a specific advertising campaign. For example, if an advertising business purchases scenic photographs of Virginia for possible use in future advertising campaigns, the purchase of such photographs will be subject to the tax.
As provided above, an advertising business is the user and consumer of tangible personal property it uses in providing its services. This would include the purchase of photographic film and photocopies. Charges to create and produce photography for specific media campaigns are not taxable because these activities constitute exempt media advertising services (see P.D. 98-51 enclosed). However, purchases of film and photocopies for use in specific media advertising campaigns do not constitute the provision of advertising services. For these reasons, I find that the purchases of photographic film and photocopies by the Taxpayer are taxable.
Accordingly, I must deny your protective claim for refund. If you have any questions concerning this ruling, please contact ***** Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12990K
Rulings of the Tax Commissioner