Tax Type
Retail Sales and Use Tax
Description
Interstate transactions; Advertising brochures
Topic
Taxability of Persons and Transactions
Date Issued
04-27-1998
April 27, 1998
Dear*********:
This will reply to your letter in which you request a ruling as to the retail sales and use tax application to transactions engaged in by your client ***** (the "Taxpayer').
FACTS
The Taxpayer is a retailer located and headquartered in Virginia. The Taxpayer contracts with an out-of-state printer to print advertising brochures. The Taxpayer directs the printer to mail the printed material, via the United States Postal Service, to recipients located within and outside the state of Virginia. In some instances, the Taxpayer will direct the printer to submit all materials to an out-of-state mailer who, in turn, will mail the materials via the United States Postal Service, to the Taxpayer's customers located within and outside of Virginia. The Taxpayer is requesting a ruling as to the Virginia sales and use tax application to the printed promotional brochures.
RULING
Code of Virginia Sec. 58.1-604 imposes a tax on the "use or consumption of tangible personal property in this Commonwealth, or the storage of such property outside the Commonwealth for use or consumption in this Commonwealth.' The term "use' is defined in Code of Virginia Sec. 58.1-602 as "the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business.'
In the present case, the Taxpayer (a Virginia retailer) purchases all printed advertising brochures from an out-of-state printer. At the direction of the Taxpayer, the out-of-state printer either mails the brochures to the Taxpayer's customers through the United States Postal Service, or ships the brochures to an out-of-state mailing house for distribution by the same means. Brochures are mailed free of charge to customers located both within and outside of Virginia.
Based on these facts, and longstanding department policy, I find that the Taxpayer takes constructive delivery of the advertising brochures delivered to Virginia customers, and such transactions fall within the provisions of the Virginia sales and use tax. This position is supported by Public Document 85-85 (4/15/85), copy enclosed. It should be noted that the Virginia use tax would only be applicable to those brochures delivered to Virginia customers and would not apply to brochures delivered to the Taxpayer's out-of-state customers.
You cite P.D. 97-61 (2/10/97) to support your position that the transactions at issue are not subject to Virginia's sales and use tax. I would note, however, that the facts in P.D. 97-61 are different from those you present. Most significantly, both the taxpayer and the printer were located outside Virginia, and the purchasing, printing, directing, and mailing of the promotional materials were conducted outside Virginia.
If you should have any questions, please contact ***** Office of Tax Policy, at *****.
Dear*********:
This will reply to your letter in which you request a ruling as to the retail sales and use tax application to transactions engaged in by your client ***** (the "Taxpayer').
FACTS
The Taxpayer is a retailer located and headquartered in Virginia. The Taxpayer contracts with an out-of-state printer to print advertising brochures. The Taxpayer directs the printer to mail the printed material, via the United States Postal Service, to recipients located within and outside the state of Virginia. In some instances, the Taxpayer will direct the printer to submit all materials to an out-of-state mailer who, in turn, will mail the materials via the United States Postal Service, to the Taxpayer's customers located within and outside of Virginia. The Taxpayer is requesting a ruling as to the Virginia sales and use tax application to the printed promotional brochures.
RULING
Code of Virginia Sec. 58.1-604 imposes a tax on the "use or consumption of tangible personal property in this Commonwealth, or the storage of such property outside the Commonwealth for use or consumption in this Commonwealth.' The term "use' is defined in Code of Virginia Sec. 58.1-602 as "the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business.'
In the present case, the Taxpayer (a Virginia retailer) purchases all printed advertising brochures from an out-of-state printer. At the direction of the Taxpayer, the out-of-state printer either mails the brochures to the Taxpayer's customers through the United States Postal Service, or ships the brochures to an out-of-state mailing house for distribution by the same means. Brochures are mailed free of charge to customers located both within and outside of Virginia.
Based on these facts, and longstanding department policy, I find that the Taxpayer takes constructive delivery of the advertising brochures delivered to Virginia customers, and such transactions fall within the provisions of the Virginia sales and use tax. This position is supported by Public Document 85-85 (4/15/85), copy enclosed. It should be noted that the Virginia use tax would only be applicable to those brochures delivered to Virginia customers and would not apply to brochures delivered to the Taxpayer's out-of-state customers.
You cite P.D. 97-61 (2/10/97) to support your position that the transactions at issue are not subject to Virginia's sales and use tax. I would note, however, that the facts in P.D. 97-61 are different from those you present. Most significantly, both the taxpayer and the printer were located outside Virginia, and the purchasing, printing, directing, and mailing of the promotional materials were conducted outside Virginia.
If you should have any questions, please contact ***** Office of Tax Policy, at *****.
Rulings of the Tax Commissioner