Direct Mail Advertising and Sales Tax Challenges: Latest Developments With Differing State Policies

Description

State sales and use tax treatment of direct mail promotional materials is developing rapidly. An Arizona court found a seller of cooperative direct mail advertising exempt from use tax; an Indiana court ruled that materials sent from another state were taxable; and Virginia extended its exemption for purchases of certain printing materials.

Promotions and customer billings by direct mail are a significant corporate marketing tool, but state sales tax policies are varied and challenging. Company tax professionals and advisors must stay abreast of trends and changes.

Questions and potential problems abound with direct mail. What is the location to which sales tax is sourced? What about outsourced production of bills using a digital customer list? What are the use tax implications? Can a state declare nexus based simply upon the mailing of a company catalog there?

Listen as our panel of experienced sales tax advisors helps clarify the confusion over state tax policy over direct mail—for tax specialists who deal in that industry and for state tax consultants.

Outline

1. Latest state actions with direct mail
   1. Val-Pak Valley East court ruling in Arizona
   2. Extension of Virginia exemption for purchases of certain printing materials
   3. Indiana ruling that materials were taxable when sent from outside the state
   4. Amendment of Oklahoma direct mail sourcing rule to conform to SSTP
   5. Update of West Virginia SSTP matrix
   6. Other developments
2. Examples of specific state tax treatments
3. Nexus implications for mailers
   1. E.g., storage of paper
4. Printer's liability to charge tax
   1. When sales or use tax might be due
   2. Taxability of postage and shipping
5. How SSTP taxes certificates printers might need

Benefits

The panel will focus on these and other key aspects of the direct mail issue:

• Latest state actions: Which administrative and court rulings, rules, SSTP matrix changes, etc. should get a multi-state company's attention?
• Policies of major states: Which states tax or exempt direct mail billings and the materials for projects?
• Sourcing: Which jurisdictions should receive the tax from a direct mailing that goes into multiple states?
• Audits: What kind of documentation do auditors from different states expect in this area?
• Use tax: Could the materials for a marketing campaign be found "used" in a state you weren't expecting?

Upon completing this seminar, you will have an improved grasp of the variations in state sales and use tax treatment of direct mail promotions and bill mailings, and be in a better position to anticipate tax enforcement rather than respond to it.

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