97-059
Response October 7, 1997
August 19,
1997
Re: Request
for Written Advice
To Whom It May Concern:
I am request your legal opinion on the application
of Utah sales/use tax to printed
marketing literature, ie. brochures, catalogs,
pamphlets, etc. The Fortune 500 company that I represent has sales offices in
every state. In addition to sales
offices, this company also has manufacturing operations in several states. In order to market its manufactured products
this company often makes or contracts for mass mailings of promotional
literature. Such literature is
received by customers in your state at no charge via
the U.S. mail. The design, printing,
and
mailing of this marketing literature occurs outside
your state.
In order for me to provide guidance to my client
regarding the taxability of such printed literature, I would appreciate your
written opinion on the following questions:
1. Is a
use tax liability incurred by my client for printed literature mailed into your
state?
2. If
the state from where the printed literature was mailed did or did not impose a sales
or use tax on the mailing of the printed literature, would this affect the
answer to Question 1 above?
3. If a
large mailing of printed literature as mailed within your state to recipients
outside and within your state would the entire mailing be subject to sales or
use tax only the portion of the mailing that remained within your state?
4. Does
your state allow for special sales or use tax treatment of printed marketing
literature in your state, ie. brochures, catalogs, pamphlets etc.?
Thank you for your assistance in this matter. Your
prompt response will assure accurate state
sales and use tax compliance surrounding this issue.
Regards,
NAME
NAME
ADDRESS
CITY STATE ZIP
Advisory Opinion - Sales tax on printed materials
distributed in or from Utah
Dear NAME,
We
have received your request for sales tax guidance pertaining to distribution of
printed advertising material by your client or your client’s agent. We note that with regard to your client
there is no issue concerning nexus. We
offer the following:
Advertising
brochures, catalogs, pamphlets mailed by your client to customers in Utah are
subject to Utah use tax. Utah Code Ann.
section 59-12-103 levies a tax on “personal property stored, used or consumed
in this state.” “Use” means “the
exercise of any right or power over tangible personal property,” Utah Code
Ann.§59-12-102, and we interpret the provision broadly to encompasses direct
mailing or distribution of items such as the items in question here. Any advertising materials delivered to
customers in Utah are subject to our use tax, whether mailed from within Utah
or from outside Utah. Utah’s law, like
that of many states, has a reciprocity provision that allows a credit for tax
that is first due and properly paid in another state.
If
your client produces advertising materials in Utah, your client must pay sales
tax on items purchased or used in Utah to produce the advertising as outlined
in Utah Administrative Rule R865-19S-65 (copy enclosed). Whether your client is also liable for use
tax in another state for materials mailed to another state from Utah depends
upon the sales and use tax laws of the
state in question.
Rule
R865-19S-65 outlines the rules governing taxation of advertising
materials. There are no other special
provisions that apply especially to advertising materials.
Please
let us know if you have other questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
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