Sales Tax
Sales Tax State Activity Update - August 2008
Virginia Declares Sales is Not Advertising
A taxpayer was denied the advertising exemption outlined in Title 23 of the Virginia Administrative Code (VAC) 10-210-41(regulation), on the purchases of certain items to create multimedia CD presentations because there was no evidence that the CD was dissemination to the general public or part of a specific advertising campaign as required by the regulation.
Facts
The taxpayer was audited and assessed tax on specific invoices representing purchases of certain items it used to create multimedia CD's.
In one instance the Taxpayer's customer used the CD presentation as a sales tool for use by its marketing employees when making sales presentations with potential clients and taxpayer contends this CD is other media as outlined in the regulation.
In second instance the taxpayer maintains the cost for shooting and editing of a video testimonial is similar to the photography and design as described in P.D. 87-73 (2/27/87) and also in the regulation.
In a third instance the taxpayer maintains the transactions represent purchases of photography which the taxpayer contends was purchased for use in the creation of media advertising for a future advertising campaign.
Ruling
The taxpayer was denied relief in all three instances. In the first instance the taxpayer failed to demonstrate that the CD was dissemination to the general public. In the second instance the taxpayer could demonstrate the CD was part of a specific advertising campaign. In the third instance the advertising exemption does not apply to items that possibly may be used in future campaigns.
The full ruling can be viewed on the Virginia Policy Library Web site.
The full ruling can be viewed on the Virginia Policy Library Web site.
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