§ 26-52-522 — Direct mail sourcing - Definitions

(a) As used in this section: (1) "Advertising and promotional direct mail" means direct mail in which the primary purpose is to attract attention to a product, person, business, or organization or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization; (2) "Direct mail form" means: (A) A Streamlined Sales and Use Tax Agreement certificate of exemption claiming direct mail, as in effect on January 1, 2011; or (B) A written statement approved, authorized, or accepted by the state; (3) (A) "Jurisdictional information" means information sufficient for the seller to source the sale of taxable printing services resulting in advertising and promotional direct mail to the state and local jurisdictions in which the printed materials are delivered or distributed to recipients. (B) Jurisdictional information must be in a form in which the information can be retained and retrieved by the seller for the purpose of sales and use tax reporting. (C) Access to a database that contains address information or a mailing list provided by the purchaser or a third party that does not allow the seller to retain and retrieve the jurisdictional information identifying jurisdictions where the advertising and promotional direct mail was delivered does not constitute receiving information showing the jurisdictions to which the advertising and promotional direct mail is delivered; (4) (A) "Other direct mail" means any direct mail that is not advertising and promotional direct mail regardless of whether advertising and promotional direct mail is included in the same mailing and includes without limitation: (i) Transactional direct mail that contains personal information specific to the addressee, including without limitation invoices, bills, statements of account, and payroll advices; (ii) Any legally required mailings, including without limitation privacy notices, tax reports, and stockholder reports; and (iii) Other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents, including without limitation newsletters and informational pieces. (B) "Other direct mail" does not include the development of billing information or the provision of any data processing service that is more than incidental; and (5) "Product" means tangible personal property, specified digital products, a digital code, a product transferred electronically, or a service. (b) The sale of a taxable printing service resulting in the production and distribution of advertising and promotional direct mail or other direct mail shall be sourced in accordance with this section. (c) (1) The seller shall source the sale of taxable printing service resulting in the production and distribution of advertising and promotional direct mail according to § 26-52-521(b)(5) , unless the purchaser provides the seller with a direct pay permit, direct pay form, exemption certificate, or jurisdictional information. (2) If the purchaser provides jurisdictional information to the seller, then the seller shall source the sale of the taxable printing service to the jurisdictions to which the advertising and promotional direct mail is to be delivered. (d) The seller shall source the sale of taxable printing services resulting in the production and distribution of other direct mail according to § 26-52-521(b)(3) , unless the purchaser provides the seller with a direct pay permit, direct pay form, or exemption certificate. (e) When both advertising and promotional direct mail and other direct mail are combined in a single mailing, the sale is sourced as other direct mail. (f) If a bundled transaction includes advertising and promotional direct mail, this section applies only if the primary purpose of the transaction is the sale of products or services that meet the definition of advertising and promotional direct mail. (g) (1) In the absence of bad faith, the seller is relieved of any further obligation to collect any additional sales or use tax on the sale of advertising and promotional direct mail where the seller has sourced the sale according to the jurisdictional information provided by the purchaser. (2) In the absence of bad faith, the seller is relieved of all obligations to collect, pay, or remit sales or use tax if the purchaser provides the seller with a direct pay permit, direct pay form, or exemption certificate. (h) (1) If the purchaser provides the seller with a direct pay permit, direct pay form, or exemption certificate, then the purchaser shall source the sale to the jurisdictions to which the advertising and promotional direct mail or other direct mail is to be delivered to the recipients and shall report and pay any applicable sales or use tax due. (2) Purchasers may use a reasonable summary or allocation of the distribution to the jurisdictions to which the advertising and promotional direct mail or other direct mail is delivered for the purposes of self-assessing and directly paying sales or use tax. (3) This section does not limit any purchaser's: (A) Obligation for sales or use tax to any state to which the direct mail is delivered; (B) Right under local, state, federal, or constitutional law to a credit for sales or use taxes legally due and paid to other jurisdictions; or (C) Right to a refund of sales or use taxes overpaid to any jurisdiction.

Legislative History

Amended by Act 2017, No. 141,§ 42, eff. for tax years beginning on and after 1/1/2018. Acts 2003, No. 1273, § 11; 2011, No. 291, § 14.