Exemptions from Sales and Use Tax for Printing Free Newspapers

In 1977, the Virginia Supreme Court issued a ruling (Jefferson Printing v. State Tax Commissioner, 217 Va. 988, 234 S.E.2d.297[1977]) making the tax applicable to purchases of printing by publishers of free newspapers and similar periodicals. In 1982, the Virginia General Assembly changed the law to extend the industrial manufacturing exemption to "equipment, printing or supplies, used directly to produce a publication (for) distribution at no cost." One year later, the legislature extended that exemption to "those businesses classified in codes ... 20 through 39 of the Standard Industrial Classification (SIC) Manual." Newspaper printers are included in code 27 of the manual. Code 27 also includes businesses which publish but do not print newspapers.

Several years later, the state Department of Taxation assessed a sales tax on printing charges for the publisher of a free-distribution newspaper. The publisher appealed the assessment to the tax commissioner.

On May 22, 1989, Commissioner W.H. Forst issued a ruling stating that the 1983 law change would exempt the free-newspaper publisher from the sales tax.

Click here to read the tax commissioner's letter that outlined the ruling.