Sales and Use Tax TAA 13A-019 - Taxability of Advertising Mail-Outs
QUESTION: Are certain printed mail-outs subject to sales and use tax?
ANSWER: No.
August 23, 2013
Re: Technical Assistance Advisement – TAA 13A-019
Taxability of Advertising Mail-outs
Sales and Use Tax Section 212.08(7)(w), 212.08(7)(ccc), Florida Statutes (F.S.) Rule 12A-1.008(3) & (5), Florida Administrative Code (F.A.C.)
XXX (“the Taxpayer”)
FEI #: XXX
Dear XXX:
This is in response to your letter dated XXX, requesting this Department’s
issuance of a Technical Assistance Advisement (“TAA”) pursuant
to Section 213.22, F.S., and Rule Chapter 12-11, Florida Administrative
Code (F.A.C.), regarding the taxability of certain printed materials.
An examination of your letter has established that you have complied with
the statutory and regulatory requirements for issuance of a TAA. Therefore,
the Department is hereby granting your request for a TAA.
ISSUE
The issue is whether certain printed mail-outs are subject to sales and use tax.
FACTS
The Taxpayer is the publisher of a regularly issued multi-vendor advertising
mail-out. The mailout consists exclusively of advertisements for multiple
vendors who pay the Taxpayer to include them in the mail-out. The mail-outs
contain coupons from multiple vendors and are sealed and attached to an envelope.
TAXPAYER POSITION
It is your position the subject mail-outs represent publications subject
to either of the two exemptions found in Florida Statutes for publications
distributed free of charge, on a regular basis, by the U.S. Postal Service.
The two statutory provisions you allude to are s. 212.08(7)(w) and s.
212.08(7)(ccc), F.S.
You indicate the mail-outs are in compliance with s. 212.08(7)(w), F.S.,
as a publication, and provide in part:
The [mail-out] is a bound publication that is identified as a specific
issue. For example [a mail-out] would be identified as follows:
AUTUMN ONLINE-ONLY OFFERS VALID OCTOBER 15 - NOVEMBER 11, 20121
You indicate the subject mail-outs are also subject to the exemption for
Advertising materials distributed free of charge by mail in an envelope.2
You indicate in part the following:
The mailer is enclosed by a paper container that is sealed and addressed
as an envelope. Since the wrap-around envelops the mailer we conclude
that it meets the criteria for “mailing in an envelope”.
LAW AND DISCUSSION
Section 212.08(7)(w), F.S., provides:
Certain newspaper, magazine, and newsletter subscriptions, shoppers, and
community newspapers.--Likewise exempt are newspaper, magazine, and newsletter
subscriptions in which the product is delivered to the customer by mail.
Also exempt are free, circulated publications that are published on a
regular basis, the content of which is primarily advertising, and that
are distributed through the mail, home delivery, or newsstands. The exemption
for newspaper, magazine, and newsletter subscriptions which is provided
in this paragraph applies only to subscriptions entered into after March 1, 1997.
Rule 12A-1.008(1)(a), F.A.C., provides:
For purposes of this rule, the term “periodicals” includes
newspapers, community newspapers, shoppers, newsletters, magazines and
other periodicals, but excludes books, whether published in serial form
or otherwise.
Rule 12A-1.008(3)(a), F.A.C., provides:
Periodicals that meet the following requirements are exempt from tax:
1. The periodical is published on a regular basis; 2. The periodical is
distributed free of charge to the recipient by mail, home delivery, rack
machines, newsstands, or similar method; and 3. The content of the periodical
is primarily advertising.
In the case, Department of Revenue v. Val-Pak Direct Marketing Systems,
Inc., 862 So.2d 1 (Fla. App. 2 Dist. 2003), the court found that coupons
mailed in envelopes were not materials subject to the shopper exemption,
because they were not “in the format of a publication.”
Accordingly, it cannot be successfully argued that the subject advertising
materials constitute a publication. However, the statutory change following
Val-Pak allows an exemption for materials distributed free of charge by
mail in an envelope. This exemption is found in s. 212.08(7)(ccc), F.S.,
and provides:
Advertising materials distributed free of charge by mail in an envelope.--Likewise
exempt are materials consisting exclusively of advertisements, such as
individual coupons or other individual cards, sheets, or pages of printed
advertising, that are distributed free of charge by mail in an envelope
for 10 or more persons on a monthly, bimonthly, or other regular basis.
The corresponding rule provision can be found in Rule 12A-1.008(5)(a),
F.A.C., which provides:
Certain advertising materials are exempt from sales and use tax only if
the materials:
1. Consist exclusively of advertisements, such as individual coupons or
other individual cards, sheets, or pages of printed advertising; and 2.
Are distributed free of charge by mail in an envelope; and 3. The envelope
contains advertisements from 10 or more persons (advertisers).
The subject mail-outs are contained in an envelope (notwithstanding they
are attached to it). Accordingly, the exemption is applicable provided
the mailings are done on a regular basis as indicated.
RESPONSE
The subject printed mail-outs are not subject to sales and use tax.
This response constitutes a Technical Assistance Advisement under Section
213.22, F.S., which is binding on the Department only under the facts
and circumstances described in the request for this advice as specified
in Section 213.22, F.S. Our response is predicated on those facts and
the specific situation summarized above. You are advised that subsequent
statutory or administrative rule changes, or judicial interpretations
of the statutes or rules, upon which this advice is based, may subject
similar future transactions to a different treatment than expressed in
this response.
You are further advised that this response, your request and related backup
documents are public records under Chapter 119, F.S., and are subject
to disclosure to the public under the conditions of s. 213.22, F.S. Confidential
information must be deleted before public disclosure. In an effort to
protect confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement, the backup
material and this response, deleting names, addresses and any other details
which might lead to identification of the taxpayer. Your response should
be received by the Department within 15 days of the date of this letter.
Sincerely,
R. Clay Brower
Revenue Program Administrator
Technical Assistance and Dispute Resolution
(850) 717-6306
RCB/ Ctrl# 143938
End Notes:
1 The submitted samples did not contain this heading, although they do indicate the validation dates. 2 See s. 212.08(7)(ccc), F.S.