96-168

Response November 6, 1996

Request

XXXXX

October 31, 1996

XXXXX

Policy Analyst

Utah State Tax Commission

210 North 1950 West

Salt Lake City, Utah 84134

Dear XXXXX

Pursuant to a telephone conversation this day with XXXXX, I am writing to obtain a formal Advisory opinion concerning the sale of postage stamps in our XXXXX convenience stores. We are not currently under audit on this issue.

We originally discussed this matter with XXXXX of your office, who indicated that the full retail of the stamps would be considered a taxable transaction. Please see the attached notes of the conversation, which clearly delineates the situation and response received.

However, as you are now about aware, our implementation of the policy has created somewhat of a public relations nightmare on the issue. Consequently, I followed up the conversation with XXXXX who stated that in her opinion, the transaction would probably be exempt in Utah as it is in most other states. Due to this conflict of responses, I am writing for a formal opinion on the issue.

The situation is as stated on the attached. A prompt response would be most appreciated as it is XXXXX’s intent to fully comply with the Sales and Use Tax laws in each state. Also, please advise of the statutory authority for your decision.

Feel free to contact me with any questions. My telephone number is XXXXX, and my FAX number is XXXXX.

Sincerely yours,

XXXXX

November 6, 1996

XXXXX

Advisory Opinion - taxation of postage stamps

Dear XXXXX

We have received your request for sales tax advice pertaining to sales of postage stamps by your stores. We offer the following:

Under federal law, postage stamps represent “obligations” or “other securities” of the United States, and they are not tangible personal property within the meaning of Utah’s sales tax statutes. (See §18 U.S.C. 8). Therefore, the sale of postage stamps is not subject to Utah’s tax on sales of tangible personal property. Nor is any handling or service fee added by your stores subject to sales tax.

Thank you for bringing this matter to our attention. We apologize for any inconvenience arising from the information that you received from our Customer Service staff. We are happy to answer any other questions that arise.

For the Commission,

Joe B. Pacheco,

Commissioner