Were sales and rentals of required college textbooks by a private online retailer exempt from Virginia sales tax?

Subject

Virginia retail sales and use tax application to the sale of textbooks by independent retailers to colleges and other institutions of learning.

Plain-English summary

Virginia confirmed that a private online retailer could sell or rent required textbooks to students without sales tax.

The textbook had to be certified by a department or instructor as required for students taking a course at the institution. Since July 1, 2010, the exemption covered students at both for-profit and nonprofit colleges and other institutions of learning.

The retailer needed to keep required-textbook lists from the institutions to substantiate exempt Virginia sales and rentals.

Citations and references

• Va. Code § 58.1-609.10 8.
• Senate Bill 392, Chapter 569 of the 2008 Acts of Assembly.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 17-36

Original ruling text

March 28, 2017

Re: Request for Ruling: Retail Sales and Use Tax

Dear *:

This will reply to your letter in which * (the “Taxpayer”) requests a ruling as to the proper Virginia retail sales and use tax application to the sale of textbooks by independent retailers to colleges and other institutions of learning.

FACTS

The Taxpayer is an out-of-state, on-line retailer of college textbooks and is registered with the Department of Taxation for the collection and remittance of the Virginia retail sales and use tax. For inventory planning purposes, the Taxpayer obtains lists of required textbooks from colleges and universities. During the Taxpayer's on-line checkout process, the Taxpayer requests the name of the college or university the student is currently attending. If the student indicates that they are attending a not-for­profit college and the college lists the textbook as a required text, the Taxpayer does not charge the Virginia sales or use tax on the sale in accordance with Title 23 of the Virginia Administrative Code 10-210-4020 8 b.

The Taxpayer requests that the Department confirm the circumstances in which sales of college textbooks by a private retailer to students would and would not be subject to tax for both sale and rental transactions.

RULING

The law with respect to the sale of textbooks was amended by the passage of Senate Bill 392 (Chapter 569, 2008 Acts of Assembly) of the 2008 Virginia General Assembly Session. This amendment expanded the exemption found under Va. Code § 58.1-609.10 8 to include the sale of textbooks to students attending all colleges and institutions of learning and became effective on July 1, 2010. Prior to July 1, 2010, the exemption was available only to students attending not-for-profit colleges and institutions of learning. Virginia Code § 58.1-609.10 8 was amended to exempt the sale of textbooks as follows:

[s]chool textbooks sold for use by students attending a college or other institution of learning, when sold (i) by such institution of learning or (ii) by any other dealer, when such textbooks have been certified by a department or instructor of such institution of learning as required textbooks for students attending courses at such institution.

To answer your question, both sales and rentals of certified textbooks by private retailers to students attending both for-profit and not-for-profit colleges and institutions of learning qualify for exemption from the Virginia retail sales and use tax. The Taxpayer should continue to obtain lists of required textbooks from all colleges and institutions of learning in order to substantiate all exempt sales and rentals to Virginia students.

This response is based on the facts provided as summarized above. Any change in the facts or the introduction of new facts may lead to a different result.

The Code of Virginia and regulation sections cited in this letter are available on­line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's website. If you should have any questions regarding this ruling, please contact * in the Office of Tax Policy, Appeals and Rulings, at ***.

Sincerely,

Craig M. Burns

Tax Commissioner

AR/1031.Q