Did a Florida direct-mail marketer have to collect sales tax on printed materials delivered to recipients in Florida?

Plain-English summary

Florida ruled that a direct-mail marketing company had to register as a dealer and collect sales tax on its sales of printed materials delivered to recipients in Florida.

The company hired unrelated fulfillment firms to print, label, stuff, supply postage for, and mail marketing pieces. It then billed customers a bundled fee for materials, list use, services, and postage reimbursement. Florida treated the company as purchasing printed materials for resale, not as the printer. The special rule shifting tax responsibility from a printer to the purchaser therefore did not protect it.

The company could give its printer a resale certificate instead of paying tax on its own purchase. On the customer-facing sale, however, it had to collect tax for materials delivered in Florida.

Materials agreed at the time of sale to be delivered outside Florida could qualify as exports when sent through USPS for outside delivery. The company had to document that the export process was continuous and unbroken.

What this means for you

Direct-mail companies that resell printed pieces can have two separate compliance steps: buy the materials for resale with a certificate, then collect tax based on where the finished pieces are delivered. Export treatment depends on the agreement and delivery records.

Common questions

Did the printer-specific mailing rule apply? No. The requester bought from a third-party printer and resold the materials.

Could the requester buy from the printer tax-free? Yes, by presenting a resale certificate.

When were customer sales exempt? When outside-Florida delivery was agreed at sale, completed through USPS, and supported by records showing continuous export.

Citations and references

• Fla. Stat. §§ 212.02, 212.05, 212.06, and 212.08, and Fla. Admin. Code rr. 12A-1.0015 and 12A-1.027, as quoted and discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 10A-023

Original ruling text

SUMMARY
QUESTION: Is the Taxpayer responsible for collecting and remitting sales tax on direct
mailing sales when such items are delivered into Florida?
ANSWER – Based on the Facts Below: Yes, the Taxpayer is responsible for collecting and
remitting sales tax on direct mailing sales when such items are delivered into Florida. Based on
the information provided, the Taxpayer is purchasing printed materials for resale from a third
party printer. The exclusion from sales tax for printers as provided in section 212.08(3)(b)1.,
F.S., and Rule 12A-1.027(4), F.A.C., does not apply to the Taxpayer. The Taxpayer should be
registered as a dealer to collect and remit sales tax for sales of printed materials delivered in this
State. Since the Taxpayer is purchasing printed materials to be resold to its clients, it should
present a resale certificate to the printer in lieu of paying sales tax.
The Taxpayer would not be required to collect sales tax if, at the time of the sale, it agrees to
deliver the printed materials to a location outside Florida and the printed materials are delivered
to USPS for subsequent delivery outside of Florida. Services must maintain sufficient
documentation to support that the exportation process of the printed materials outside this State
is continuous and unbroken.
May 13, 2010
XX
Re:

Subject: Technical Assistance Advisement (TAA) 10A-023
Sales and Use Tax – Printed Materials
Sections 212.02, 212.05. 212.06, and 212.08, Florida Statutes (F.S.)
Rules 12A-1.0015 and 12A-1.027, Florida Administrative Code (F.A.C.)
XX (Services)
FEI # XX
XX (Marketing)
FEI # XX

Dear XX:
This is in response to your letter dated January 20, 2010, requesting this Department’s issuance
of a Technical Assistance Advisement (“TAA”) pursuant to section 213.22, F.S., and Rule
Chapter 12-11, F.A.C., concerning the taxability of the purchase of printed materials for resale.
Examination of your letter has established you have complied with the statutory and regulatory
requirements for issuance of a TAA. Therefore, the Department is hereby granting your request
of a TAA.

Facts

Technical Assistance Advisement
Page 2 of 4
A new Florida entity was established in September 2009, named [Services]. The
business purpose of [Services] is to sell the services of and operate as the management
company of [Marketing]. However, it is likely that [Services] may also operate similar to
its sister company, [Marketing], as a direct mail marketing company.
As a direct mail marketing company, [Services] will provide marketing services and
materials to various industries, predominately insurance companies. [Services] would
use non-related third parties to purchase printed materials for mass mailing. Typically,
[Services] would contract with a fulfillment company to print the mailings, print the
labels, stuff the envelopes, supply postage and mail the marketing pieces via the United
States Postal Service (USPS) directly to the ultimate recipients. As [Services] receives
responses from the direct mailers, [Services] would compile the information and
electronically forward the contact information to the appropriate professionals within the
insurance company (customer). [Services] will invoice its customers using a bundled fee
arrangement which covers all materials, utilization of theft contact list, services
performed and postage reimbursement.
Taxpayer’s Position
1) If Services were to operate as a direct marketer, it would not be required to collect sales tax.
Services must be able to show that at the time of sale, the exportation process is continuous and
unbroken (never shipped to the state of Florida or delivered to the state of Florida for future
distribution) and sufficient support is in place to document the out of state sales. If Services has
this support, then no sales tax should be collected on direct mailings outside or inside the state of
Florida. Any direct mailings to Florida residents or businesses would be subject to use tax
payable by the customer acquiring the direct mailing service. If Services cannot maintain the
appropriate records internally to show that the sales are not subject to sales tax, the alternative
option is to request the purchaser to provide Services with a signed affidavit which certifies at a
minimum that:
a) Services is to deliver the printed materials to the USPS for mailing, at least in part, to an
agreed list of persons, other than the purchaser, located outside Florida; and
b) The purchaser understands that they must pay use tax directly to the State of Florida for all
printed materials that are mailed to persons located within Florida and the use tax would be
reported on the Out-of-State Purchase Return (Form DR- 15MO). Services should request a tax
exemption certificate from the customer to maintain internally if Services is advised by the
customer that the exemption is applicable.
Requested Advisement
The Taxpayer requests an advisement that provides whether or not it is responsible for collecting
and remitting sales tax on direct mailing sales when such items are delivered into Florida.
Discussion

Technical Assistance Advisement
Page 3 of 4
Section 212.05, F.S., imposes a taxable privilege on every person engaged in the business of
selling tangible personal property at retail in Florida. This includes the sale of printing services
as provided by section 212.02(15)(c), F.S. Section 212.02(16), F.S., defines “sales price” to
include any services that are sold as part of the sale of tangible personal property. Section
212.02(14), F.S., defines “retail sale” to include any sale, for any purpose other than for resale.
Rule 12A-1.027, F.A.C., provides the sale of printed tangible personal property, including all
charges to the consumer for materials, for the production or fabrication of items used, and for
binding and finishing the printed property or graphic matter for distribution, are subject to tax.
Section 212.05(2), F.S., provides the tax is to be collected by the dealer and remitted to the State.
Generally, where sales and use tax is imposed, the purchaser of the tangible personal property
would be responsible for paying the tax, and the seller would be responsible for collecting the
tax and remitting it to the Department of Revenue.
Section 212.06(3)(b), F.S., provides an exception to this general rule for printers. This paragraph
shifts the burden of collecting and remitting taxes from the seller (printer) to the purchaser of the

printed materials. Section 212.06(3)(b)1., F.S., provides that a purchaser of printed materials
will have the sole responsibility for the taxes imposed by Chapter 212 of the Florida Statutes
when the printer delivers them to the United States Postal Service for mailing to persons other
than the purchaser located within and outside this state. The subparagraph further provides that
under these circumstances, printers will have no obligation for the payment or collection of any
taxes imposed by Chapter 212, F.S. ,on such materials unless all or substantially all the materials
are mailed to persons located within this state. In addition, section 212.06(3)(b)1., F.S., creates a
rebuttable presumption that all materials printed at a facility are mailed to persons located within
the same state as that in which the facility is located.
Based on the information provided, Services is not a printer but rather is purchasing printed
materials for resale from a third party printer. The exclusion from sales tax for printers as
provided in section 212.08(3)(b)1., F.S., and Rule 12A-1.027(4), F.A.C., does not apply to
Services. Services should be registered as a dealer to collect and remit sales tax for sales of
printed materials delivered in this State. Since Services is purchasing printed materials to be
resold to its clients, it should present a resale certificate to the printer in lieu of paying sales tax.
Section 212.06(5)(a)1., F.S., provides that tangible personal property that is produced in this
state for export is not subject to tax when the dealer delivers the property to a licensed exporter
or common carrier for delivery outside Florida. Services would not be required to collect Florida
sales tax, if at the time of the sale Services agrees to deliver the printed materials to a location
outside Florida.
Conclusion
Services is responsible for collecting and remitting sales tax on direct mailing sales when such
items are delivered into Florida. Services would not be required to collect sales tax if, at the time
of the sale, Services agrees to deliver the printed materials to a location outside Florida and the
printed materials are delivered to USPS for subsequent delivery outside of Florida. Services
must maintain sufficient documentation to support that the exportation process of the printed

Technical Assistance Advisement
Page 4 of 4
materials outside this State is continuous and unbroken.
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 that
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 section 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,

Brinton Hevey
Tax Law Specialist
Technical Assistance and Dispute Resolution
850/488-7157
Record ID: 78020