Sourcing of Purchases of Direct Mail

Checkout our iOS App for a better way to browser and research.

Sec. 3. (a) Notwithstanding section 1 of this chapter, a purchaser of advertising and promotional direct mail that is not a holder of a direct pay permit may provide to the seller in conjunction with the purchase:

(1) a direct mail form;

(2) a certificate of exemption claiming "direct mail" (or another written statement approved, authorized, or accepted by the department); or

(3) information to show the jurisdictions to which the advertising and promotional direct mail is delivered to recipients.

(b) If the purchaser provides the direct mail form referred to in subsection (a)(1), or a certificate or statement referred to in subsection (a)(2), in the absence of bad faith, the seller is relieved of all obligations to collect, pay, or remit the applicable tax on any transaction involving advertising and promotional direct mail to which the direct mail form, certificate, or statement applies. The purchaser shall source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered to the recipients and is obligated to pay or remit the applicable tax on a direct pay basis.

(c) If the purchaser provides the information referred to in subsection (a)(3) showing the jurisdictions to which the advertising and promotional direct mail is delivered to recipients, the seller shall source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered and collect the tax according to the delivery information provided by the purchaser. In the absence of bad faith, the seller is relieved of any further obligation to collect tax on any transaction where the seller has sourced the sale and collected tax under the delivery information provided by the purchaser.

(d) If the purchaser of advertising and promotional direct mail does not have a direct pay permit and does not provide the seller with either a direct mail form referred to in subsection (a)(1), a certificate or statement referred to in subsection (a)(2), or delivery information referred to in subsection (a)(3), the sale shall be sourced and the seller shall collect the tax according to section 1(d)(5) of this chapter. Nothing in this subsection limits a purchaser's obligation for sales or use tax to any state to which the advertising and promotional direct mail is delivered. The state to which the advertising and promotional direct mail is delivered may disallow a credit for tax paid to this state on sales sourced under this subsection.

(e) Except as provided in this section, sales of other direct mail are sourced in accordance with section 1(d)(3) of this chapter. A purchaser of other direct mail may provide the seller with either:

(1) a direct mail form; or

(2) a certificate of exemption claiming "direct mail" (or another written statement approved, authorized, or accepted by the department).

(f) If the purchaser provides the direct mail form referred to in subsection (e)(1) or a certificate or statement referred to in subsection (e)(2), the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving other direct mail to which the direct mail form, certificate, or statement applies. Notwithstanding subsection (e), such a sale shall be sourced to the jurisdictions to which the other direct mail is to be delivered to the recipients, and the purchaser shall report and pay the applicable tax due.

(g) If a purchaser of direct mail provides the seller with documentation of direct pay authority, the purchaser shall not be required to provide a direct mail form, a certificate or statement, or delivery information to the seller.

(h) A direct mail form remains in effect for all future sales of direct mail by the seller to the purchaser until it is revoked in writing.

(i) This section applies to a transaction characterized as the sale of services only if the service is an integral part of the production and distribution of printed material that is direct mail.

(j) This section does not apply to any transaction that includes the development of billing information or the provision of any data processing service that is more than incidental, regardless of whether advertising and promotional direct mail is included in the same mailing.

As added by P.L.257-2003, SEC.32. Amended by P.L.265-2013, SEC.8.


Download our app to see the most-to-date content.