For California's printed-sales-message exemption, must a mailing house act only as the purchaser's agent?

Plain-English summary

A Board audit office asked whether the printed-sales-message rules restricted the parties to a mailing house acting solely for the purchaser.

California said no. If a mailing house acted as the seller's agent, the messages were treated as mailed or delivered by the seller. The language also allowed a seller to deliver the pieces to a mailing house hired by the purchaser without losing the exemption.

The memorandum therefore treated seller-agent and purchaser-agent mailing-house arrangements as potentially compatible with the delivery requirement.

What this means for you

Printers, mailing houses, and tax professionals

Agency labels did not create a seller-only or purchaser-only restriction. Document who hired the mailing house and how the messages moved, then test the transaction against all other printed-sales-message requirements.

Common questions

Q: Did the mailing house have to act only for the purchaser?

A: No.

Q: What if the mailing house acted for the seller?

A: Its mailing or delivery was treated as mailing or delivery by the seller.

Q: Could the purchaser hire the mailing house?

A: Yes. The memorandum said the seller could deliver to a purchaser-hired mailing house without losing the exemption.

Citations and references

• California Revenue and Taxation Code § 6379.5
• California Sales and Use Tax Regulation 1541.5

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Annotation page: Annotation 432.1100
• Original supporting memorandum: 432.1100 PDF

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Mr. Morris Verna, Jr.
San Francisco Audit

From:

Ronald L. Dick
Senior Tax Counsel

Subject:

Revenue and Taxation Code Section 6379.5

432.1100

Date:

December 16, 1991

This is in reply to your question regarding the language in section 6379.5 and Sales and Use Tax Regulation 1541.5, Printed Sales Messages, which requires in relevant part that printed sales messages be “mailed or delivered by the seller, the seller’s agent, or a mailing house, acting as the agent for the purchaser, through the United States Postal Service or by common carrier”. You ask whether there is any legislative intent to restrict the parties to using a mailing house that acts solely as the purchaser’s agent and not one that acts as the seller’s agent. We do not believe so. If the mailing house acts as an agent of the seller, then the printed sales messages would be “mailed or delivered by the seller”. We believe that the language is meant to allow the seller to deliver the printed sales messages to a mailing house hired by the purchaser without losing the exemption.

RLD:sr