Could an advertising company replace Virginia Forms ST-10 and ST-10A with its multijurisdictional blanket exemption certificate?

Subject

Multijurisdictional exemption certificate does not meet state requirements

Plain-English summary

An advertising business asked Virginia to approve its multijurisdictional blanket exemption certificate. Virginia allows a blanket resale certificate only when it requires the same information as Form ST-10. The proposed form did not meet that standard, so the Department declined to approve it. Attaching Virginia's Form ST-10 to the reverse side was acceptable.

The ruling also separated two kinds of purchases. The agency was to use Form ST-10A for writing, graphic design, mechanical art, photography, and similar inputs used in qualifying media advertising. It was to use Form ST-10 for tangible personal property purchased for resale to clients outside a media-advertising campaign.

What this means for you

• A multistate or blanket certificate must still contain all information Virginia requires for the claimed exemption.
• Advertising agencies should distinguish inputs consumed in qualifying media advertising from property resold to clients.
• Use the Virginia certificate applicable to the transaction and confirm that the form remains current.

Citations and references

• Va. Code § 58.1-609.6(5) and Va. Code § 58.1-602, advertising exemption and definition.
• 23 VAC 10-210-40 through 10-210-43, media and non-media advertising.
• P.D. 95-316, requirements for a blanket resale certificate.
• P.D. 90-60, P.D. 92-19, P.D. 95-58, and P.D. 95-165, Form ST-10A uses.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 07-76

Original ruling text

May 18, 2007

Re: Request for Ruling: Retail Sales and Use Tax

Dear *:

This is in reply to your letter in which you request approval for the use of a multijurisdictional resale certificate of exemption form for the purchase of items used by your company, * (the "Taxpayer") in its advertising operations. I apologize for the delay in responding to your letter.

RULING

The Department has allowed the use of a "blanket" certificate of exemption with respect to the resale exemption. In prior rulings, the Department has set forth the requirements for the use of a "blanket" exemption certificate in place of the Department's prescribed Resale Certificate of Exemption, Form ST-10. The requirements stipulate that the information necessary for completion of Form ST-10 must be the same information necessary for completion of the "blanket" certificate of exemption form. See Public Document 95-316 (12/15/95).

Based on a review of the Taxpayer's blanket exemption certificate, I find that the Taxpayer's multijurisdictional exemption certificate does not meet the requirements set out in the referenced public document. Therefore, the Taxpayer must continue to use the Department's Form ST-10 when purchasing tangible personal property for resale. The Taxpayer is correct in attaching a copy of the Form ST-10 to the reverse side of the blanket exemption certificate.

With regard to the Taxpayer's advertising operations, Va. Code § 58.1-609.6 5 provides an exemption from the retail sales and use tax for advertising, as defined in Va. Code § 58.1-602. The exemption applies to advertising placed in certain media including newspapers, magazines, billboards, direct mail, radio and television. The regulations under Title 23 of the Virginia Administrative Code 10-210-40 through 10-210-43 discuss the application of the exemption and distinguish between media and non-media advertising.

As an advertising business, the Taxpayer must use Form ST-10A, copy enclosed, when purchasing writing, graphic design, mechanical art, photography, etc., for use in media advertising. Form ST-10A was created to specifically apply to advertising agencies and printers for catalogs and other printed materials distributed outside of Virginia, for advertising placed in media campaigns and for advertising supplements. See Public Documents 90-60 (4/12/90), 92-19 (4/14/92), 95-58 (3/24/95) and 95-165 (6/23/95). Form ST-10, the resale certificate of exemption, should be used when purchasing tangible personal property that will not be used in a media advertising campaign and will be resold to the Taxpayer's clients.

The Code of Virginia section, regulations and public documents cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions regarding this ruling, please contact * of the Department's Office of Policy and Administration, Appeals and Rulings, at @tax.virginia.gov or at **.

Sincerely,

Janie E. Bowen

Tax Commissioner

AR/56965Q