Sales Tax Activities
Sales Tax State Activity Update - December 2006
Virginia Scans the Legislation on Scanning Services
Background
The Taxpayer sought a ruling on its sales tax collection responsibilities with respect to sales of the scanning services and related software.
Facts
The Taxpayer provides scanning and imaging software that is delivered to customers over the Internet. Also, the Taxpayer may provide software training to customers under a separate contract.
Ruling
Virginia Code ยง 58.1-609.5 1 provides an exemption from the retail sales and use tax for services not involving an exchange of tangible personal property which provide access to or use of the Internet and any other related electronic communication service, including software, data, content and other information services delivered electronically via the Internet. As a result the sale of the Taxpayers software is exempt.
Training services provided under contracts that are separate from the sale of taxable software are exempt from the tax. The Department has issued numerous public documents that address this issue including P.D. 94-251 (8/12/94), P.D. 96-88 (05/14/96), P.D. 96-348 (11/25/96) and P.D. 03-31 (04/09/03).
The full text may be accessed on the Virgiinia Tax Policy Library Website.
(Ruling of Commissioner, P.D. 06-113, October 5, 2006)
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