Does an out-of-state publisher owe Virginia sales or use tax on magazine subscriptions, advertising services, mailed advertising postcards, and electronic newsletters and email lists sold to Virginia customers?

Plain-English summary

An out-of-state single-member LLC that publishes three bimonthly magazines — and also sells advertising postcards, electronic newsletters, access to its email distribution lists, and cloud-based advertising software — asked the Department how Virginia's retail sales and use tax applies to what it sells to Virginia customers. It has no offices, property, or facilities in Virginia. The Commissioner ruled that, on these facts, none of it is subject to Virginia sales or use tax. Here is each piece:

Print magazine subscriptions — exempt. Virginia does not tax the retail sale of any newspaper, magazine, or other publication issued regularly at intervals not exceeding three months (Va. Code § 58.1-609.6 3; 23 VAC 10-210-1060 defines "publications" broadly). Advertisements printed inside the magazines, and advertising inserts included with them, are also not taxable (23 VAC 10-210-1060 C). One caveat built into the statute: newsstand sales of such publications are taxable — but the taxpayer sells by subscription, so its sales are exempt.

Emailed / electronic magazines — exempt. The email editions have the same layout and content as the print versions. Products delivered in electronic form are nontaxable service transactions (Va. Code § 58.1-609.5 1; P.D. 97-425), so the electronic magazines are exempt.

Advertising and graphic-art services — exempt. Virginia does not tax "advertising," defined as the planning, creating, or placing of advertising in magazines, direct mail, and other media, including concept, writing, graphic design, mechanical art, photography, and production supervision (Va. Code § 58.1-609.6 5; § 58.1-602; 23 VAC 10-210-40 and -41 A). So the taxpayer's layout help, postcard design, and newsletter work are exempt services.

The use-tax twist (and why it doesn't bite here). An advertising business is treated as the user or consumer of the tangible property it buys to produce advertising (printed direct-mail items, brochures, flyers, etc.), and normally owes use tax on that property (§ 58.1-602; 23 VAC 10-210-41 B). But use tax reaches only property used within Virginia (§ 58.1-604). Because this taxpayer and its operations sit outside Virginia, the property isn't used in Virginia, so no Virginia use tax is due (P.D. 10-72).

Advertising postcards mailed to Virginians — exempt as interstate commerce. Printed inserts and supplements distributed apart from a nontaxable publication (for example, mailed on their own) are normally taxable (23 VAC 10-210-1060 C). But a sale in interstate commerce — where title or possession passes to the buyer and no use is made in Virginia — is not taxable (23 VAC 10-210-780 A). Here delivery is initiated outside Virginia and the taxpayer does not conduct enough activity in Virginia to be required to collect the tax (§ 58.1-612 C; the facts mirror P.D. 09-3), so the postcards are not taxable.

Electronic advertising newsletters — exempt. Delivered by email or other electronic means, they are nontaxable electronic products (§ 58.1-609.5 1; P.D. 97-425).

Email-list access and cloud-based advertising software — exempt. Charges for remote access to information over the Internet, with no tangible personal property changing hands, are exempt (§ 58.1-609.5 1), and the exemption doesn't depend on where the seller's servers or equipment are located (P.D. 12-191).

What this means for you

Publishers and magazine businesses

Subscription sales of magazines and other publications issued at least every three months are exempt in Virginia, and so are the ads printed inside them and inserts distributed with them. Watch two lines: newsstand/single-copy sales are taxable, and printed pieces mailed on their own (not with the publication) can be taxable unless another exemption — like advertising or interstate commerce — applies. Electronic editions delivered by email are exempt.

Advertising and marketing businesses

Your professional services — planning, creating, and placing advertising, including design and layout — are exempt "advertising." The catch is that you're the consumer of the tangible materials you buy to produce the ads and can owe use tax on them, but only if that property is used in Virginia. If your operations and vendors are out of state, Virginia use tax generally doesn't reach you.

Out-of-state sellers shipping to Virginia

Delivering printed materials into Virginia through the mail, with title passing outside the state and no in-state use, is interstate commerce and not taxable — and if you lack sufficient activity in Virginia, you aren't required to register and collect the tax (§ 58.1-612 C). Selling access to data, email lists, or cloud software over the Internet, with no tangible property provided, is exempt regardless of where your servers are.

Common questions

Q: Are magazine subscriptions taxed in Virginia?
A: No. Sales of magazines and other publications issued at intervals of three months or less are exempt (Va. Code § 58.1-609.6 3), and so are ads printed in them and inserts distributed with them. Newsstand (single-copy) sales are the taxable exception.

Q: What about the email/electronic edition?
A: Exempt. Products delivered electronically are nontaxable service transactions in Virginia (§ 58.1-609.5 1).

Q: Are advertising and graphic-design services taxable?
A: No. Advertising services — planning, creating, and placing advertising, including design and layout — are exempt (§ 58.1-609.6 5; § 58.1-602). But an advertising business is the consumer of the tangible materials it buys to make the ads and can owe use tax on them if they are used in Virginia.

Q: I mail advertising postcards to Virginia residents from out of state. Do I collect Virginia tax?
A: On these facts, no. Because title and possession pass outside Virginia and no use is made in the state, the mailing is interstate commerce and not taxable, and an out-of-state seller without sufficient Virginia activity isn't required to collect the tax (23 VAC 10-210-780; § 58.1-612 C).

Q: Do I owe tax on selling access to my email lists or cloud advertising software?
A: No, as long as no tangible personal property is provided. Charges for Internet-based access to information are exempt (§ 58.1-609.5 1), and where your servers are located doesn't change that.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-203 — Department's authority to interpret and enforce the tax laws
• Va. Code § 58.1-609.6 3 — exemption for newspapers, magazines, and publications issued at intervals of three months or less (newsstand sales excepted)
• Va. Code § 58.1-609.5 1 — exemption for products and services delivered electronically
• Va. Code § 58.1-609.6 5 — exemption for advertising
• Va. Code § 58.1-602 — definitions of "advertising" and "use"; advertising business is the consumer of property bought for advertising
• Va. Code § 58.1-604 — use tax applies only to use occurring within Virginia
• Va. Code § 58.1-612 C — dealer nexus / obligation to collect the tax
• 23 VAC 10-210-1060 — publications; taxable inserts distributed apart from a nontaxable publication
• 23 VAC 10-210-40, 23 VAC 10-210-41 — advertising services and media; use tax on property consumed in advertising
• 23 VAC 10-210-780 — sales in interstate commerce

Authorities the Commissioner relied on (described here, not linked): prior public documents holding that electronic delivery is nontaxable (P.D. 97-425), that out-of-state use avoids Virginia use tax on advertising materials (P.D. 10-72), that direct-mail delivered in interstate commerce is not taxable (P.D. 09-3), and that Internet-access charges are exempt regardless of server location (P.D. 12-191); and the strict-construction cases Commonwealth v. Community Motor Bus, 214 Va. 155 (1973), Commonwealth v. Research Analysis Corp., 214 Va. 161 (1973), and Golden Skillet Corp. v. Commonwealth, 214 Va. 276 (1973).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-92

Original ruling text

June 27, 2025

Re: Retail Sales & Use Tax: Ruling Request

Dear *:

This letter is in reply to your request for a ruling on behalf of your client (the “Taxpayer”), regarding the Virginia retail sales and use tax treatment concerning its publication and advertising activities.

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

FACTS

The Taxpayer is a single member limited liability company (LLC) that is owned by a sole shareholder that resides outside of Virginia. The Taxpayer has no facilities, offices, production facilities, or property located in Virginia.

The Taxpayer publishes three bimonthly magazines sold to other businesses and to the general public through subscriptions. The majority of the magazines are delivered to customers in print format and a small portion of the magazines are emailed to customers in a comparable format to the print versions. In addition to magazine subscription sales, the Taxpayer also sells advertising postcards delivered through the mail, electronic newsletters, paid access to its email distribution lists, and cloud-based advertising software for use by its customers. As an out-of-state business, the Taxpayer requests clarification concerning its responsibilities regarding Virginia’s sales and use tax on its sales of print publications, electronic publications, advertising and layout services, and email distribution list sales.

RULING

Strict Construction of Exemptions

The Department has the authority to interpret and enforce the laws of the Commonwealth governing taxes in accordance with Virginia Code § 58.1-203. With regard to such interpretations, the settled caselaw requires strict construction of sales and use tax exemptions. Where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption. See Commonwealth v. Community MotorBus , 214 Va. 155 (1973); Commonwealth v. Research Analysis Corporation , 214 Va. 161 (1973); and Golden Skillet Corp. v. Commonwealth, 214 Va. 276 (1973).

Publications and Periodicals

With regard to magazine sales, Virginia Code § 58.1-609.6 3 provides that the retail sales tax does not apply to the retail sale of any newspaper, magazine, or other publication issued regularly or at average intervals not exceeding three months. However, newsstand sales of such publications are taxable. Title 23 of the Virginia Administrative Code (VAC) 10-210-1060 broadly defines publications as “any written compilation of information available to the general public.” Any advertisements printed in the magazines as well as advertising inserts included inside or accompanying the magazines are also not taxable. See Title 23 VAC 10-210-1060 C.

Printed Magazines

The Taxpayer prints its magazines for distribution by mail to subscribing customers, including customers located in Virginia, on a bimonthly basis. Additional copies are sold by direct delivery on a subscription basis to business customers, which then distribute them to their subscribing customers. The magazines contain advertisements. Based on these facts, the magazine subscriptions and any advertising within them would not be subject to sales tax.

Emailed and Electronic Magazines

The publications delivered by email are in the same layout format and feature the same content as the printed versions. The transmission of products in electronic form constitute nontaxable service transactions exempt under Virginia Code § 58.1-609.5 1. See Public Document (P.D.) 97-425 (10/21/1997). As such, the electronic and email delivery of publications would not be subject to the sales tax.

Advertising and Graphic Art Services

In addition to its magazine subscriptions, the Taxpayer provides optional graphic arts services to assist advertisers with magazine layouts, advertising postcards, electronic advertising newsletters, and access to email address lists. Pursuant to Virginia Code § 58.1-609.6 5, the retail sales and use tax shall not apply to advertising. Virginia Code § 58.1-602 defines advertising as:

[T]he planning, creating, or placing of advertising in newspapers, magazines, billboards, broadcasting and other media, including, without limitation, the providing of concept, writing, graphic design, mechanical art, photography and production supervision. Any person providing advertising as defined in this section shall be deemed to be the user or consumer of all tangible personal property purchased for use in such advertising.

Title 23 of the Virginia Administrative Code (VAC) 10-210-40 defines the term “media” to include “newspapers, magazines, billboards, direct mail, radio, television, and other modes of communication.” In addition, Title 23 VAC 10-210-41 A provides:

The tax does not apply to charges by an advertising business for professional services in the planning, creating or placing of advertising in newspapers, magazines, billboards, direct mail, radio, television, or other media regardless of how such charges are computed by the advertising business and whether or not such business actually places the advertising in the media.

As such, the Taxpayer’s advertising and graphic design services are not subject to sales tax.

Virginia Code § 58.1-602 and Title 23 VAC 10-210-41 B deem advertising businesses to be the user or consumer of all tangible personal property purchased for use in such advertising. Title 23 VAC 10-210-41 B states that the use tax specifically applies to the purchase of tangible personal property used in “printing, including direct mail items, non-customized or stock mailing lists, handbills, brochures, flyers, bumper stickers, posters and similar printed materials.” Therefore, the purchase of any tangible personal property used in creating the direct print materials is generally subject to use tax.

However, an advertiser is only subject to the Virginia use tax as authorized by Virginia Code § 58.1-604, which requires use to occur within Virginia. Based on the facts provided, the Taxpayer would not be subject to use tax on tangible personal property purchased to create the advertising since such property would not be used in Virginia. See P.D. 10-72 (5/18/2010).

Advertising Postcards

The Taxpayer states that it sells advertising postcards by mail to Virginia customers. The Taxpayer explains that the ownership of the advertising postcards transfers to its customers because delivery is initiated outside of Virginia.

Title 23 VAC 10-210-1060 C states that “materials printed as inserts or supplements which are not distributed with a nontaxable publication, for example those distributed in stores or through the mail, are subject to the tax, unless otherwise specifically exempted by law.” Advertising postcards would not be otherwise exempted.

The Taxpayer cites P.D. 09-3 (2/4/2009) to support its analysis that sales of the postcards are non-taxable interstate commerce. In P.D. 09-3, a marketing business used the United States Postal Service to deliver direct mail advertisements on behalf of its customers to Virginia residents. The Department ruled that because title and possession of the direct mail materials took place outside of Virginia and no use was made in Virginia, the sales were deemed interstate commerce and not taxable. The Taxpayer’s description of its advertising postcard operations mirror those of the marketing business in P.D. 09-3.

Title 23 VAC 10-210-780 A, however, provides that sale and use tax does not apply to sales of tangible personal property in interstate commerce. A sale in interstate commerce occurs when title or possession of property being sold passes to the purchaser and no use of the property is made within Virginia. Virginia Code § 58.1-602 defines use as the “exercise of any right or power over tangible personal property incident to the ownership thereof…” Based on the facts provided, the Taxpayer does not appear to conduct sufficient activity within Virginia in order to be liable for collecting and remitting sales tax on the sale of advertising postcards. See Virginia Code § 58.1-612 C.

Electronic Advertising Newsletters

Similar to the advertising postcards, the Taxpayer sells electronic advertising newsletters, which, upon purchase by its customer, are delivered by email or other electronic means to potential consumers. The electronic and email delivery of publications is not subject to the sales and use tax. See P.D. 97-425. As such, the electronically delivered advertising newsletter to Virginia recipients would not be subject to the Virginia sales tax.

Mailing Lists

The Taxpayer sells remote access to its email lists and cloud-based email advertising software. Virginia Code § 58.1-609.5 1 provides an exemption from the retail sales and use tax for:

Professional, insurance, or personal service transactions which involve sales as inconsequential elements for which no separate charges are made ...and 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 long as no tangible personal property will be provided with the electronic, web-based, or cloud-based access to information, any fee for access to such a portal is not subject to the tax. In P.D. 12-191 (11/29/2012), the Department ruled that the taxability of such a fee or charge is not affected by the location of the seller’s computer, server, or other equipment by which the information in stored or accessed. As such, the Taxpayer’s charges for remote access to email information would not be taxable under Virginia’s sales and use tax statutes.

The Code of Virginia sections and regulations cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this ruling, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at or **.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4023.B

Related Documents

97-264

97-425

05-44

09-3

10-72

12-191