When a printer in one Colorado city prints marketing material and either ships it to a direct-mail company or mails it to recipients, whose local sales tax applies?

Plain-English summary

A Colorado direct-mail company inserts clients' marketing material into envelopes and mails it to prospective customers. The material is printed by another company in a different city/county. The printer told the direct-mail company that local sales tax isn't due if the printer prints and mails the pieces to recipients, but is due if the printer prints and ships them to the direct-mail company to address and mail. The company asked the Department to sort out which local tax applies.

The Department's answer was largely a jurisdictional one:

• It does not administer home-rule city/county taxes, and the cities involved here are home-rule. So it couldn't decide whether those city taxes apply — the company should contact those cities directly (and consult DR 1002 for the list of state-administered vs. self-collected jurisdictions).
• It does administer the county taxes (except home-rule counties like Denver). The printer sits in a city that straddles two state-administered counties, so the Department limited its response to those county taxes.
• The governing rule for state-administered local tax is the destination/sourcing rule of § 29-2-105(1)(b): all retail sales are consummated at the retailer's place of business unless the property is delivered by the retailer or its agent to a destination outside the local taxing entity, or to a common carrier for such delivery. So a printer that delivers its goods to a consumer in another county should not collect its own county's sales tax — the sale follows the goods to the destination.

The Department pointed to FYI Sales 47 (printed material sold by printers) and FYI Sales 62 (a retailer's obligation to collect state-administered local taxes), and cautioned that the originating home-rule city might impose its own tax on goods delivered within its boundaries — another reason to ask the home-rule cities.

What this means for you

Printers and direct-mail businesses

Where the printed pieces are delivered drives the local tax, not simply where you printed them. For state-administered county tax, if you deliver (yourself, by agent, or by common carrier) to a customer or destination in another county, you don't charge your home county's tax — the sale is sourced to the destination (§ 29-2-105(1)(b)). That's the kernel behind the printer's print-and-mail vs. print-and-ship distinction: who delivers, and to where.

Home-rule is the big asterisk

Much of Colorado's local sales/use tax is self-collected home-rule city/county tax that the Department doesn't administer and can't rule on. If your transaction touches home-rule cities (very common for printing/mailing across the Front Range), you must check each city's own rules — the originating city may tax goods delivered within it, and a destination city may tax goods delivered into it. Start with DR 1002 to see which jurisdictions are state-administered.

Use the FYIs

For the mechanics of taxing printed material and collecting local taxes, the Department points to FYI Sales 47 (printers) and FYI Sales 62 (collecting state-administered local tax).

Common questions

Q: Does my home county's sales tax apply if I ship printed material to a customer in another county?
A: For state-administered county tax, no — under § 29-2-105(1)(b) a sale delivered (by you, your agent, or common carrier) to a destination outside your local taxing entity is sourced to the destination, so you don't collect your own county's tax.

Q: Why couldn't the Department just answer about the city taxes?
A: Because the cities involved are home-rule and self-collect their own sales/use taxes. The Department doesn't administer those, so it can't rule on them — you contact each city.

Q: Print-and-mail vs. print-and-ship — does it matter?
A: It can, because it changes who delivers and where the goods end up, which drives sourcing. The Department framed its answer around delivery destination and the home-rule question rather than endorsing the printer's exact split.

Q: Where do I find which jurisdictions are state-administered?
A: Department publication DR 1002 lists state-administered cities, counties, and special districts and identifies home-rule jurisdictions.

Q: Can I rely on this letter?
A: No. It's a General Information Letter — general guidance, not binding on the Department.

Citations and references

Statutes and publications:
- § 29-2-105(1)(b), C.R.S. — retail sales are consummated at the retailer's place of business unless the property is delivered to a destination outside the local taxing entity (or to a common carrier for such delivery)
- DR 1002 — list of state-administered local jurisdictions and home-rule cities/counties
- FYI Sales 47 (sales/use tax on printed material sold by printers); FYI Sales 62 (collecting state-administered local sales taxes)

Source

• Landing page: https://tax.colorado.gov/sales-use-tax-letter-rulings
• Original PDF: https://tax.colorado.gov/sites/tax/files/documents/GIL-08-019.pdf

Original ruling text

Office of Tax Policy
P.O. Box 17087
Denver, CO 80217-0087
[email protected]

GIL-2008-19
September 23, 2008
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
Re: Sales tax on printing and mailing
Dear XXXXXXXXXX,
This letter is in response to your letter, dated March 21, 2008 regarding the taxability of
printing and mailing of marketing material. I apologize that it has taken so long to reply
to your request. The department recently acquired the staff needed to respond to these
types of requests.
The department also recently enacted a regulation governing requests for tax advice.
We issue both private letter rulings and general information letters. See, §24-35-103.5,
C.R.S. and Department regulation (24)-35-103.5. Private letter rulings are issued in
response to tax questions addressed to specific factual settings and are binding on the
department. General information letters are issued in response to general tax questions
and are not binding on the department. You can view this regulation on-line at:
http://www.revenue.state.co.us/taxstatutesregs/3921reg24-35-103.5.html
I am treating your request as a request for a general information letter. However, if you
would like a private letter ruling, please take a moment to review the regulation and
resubmit your request with the necessary information.
Issue
1. What, if any, sales tax is due when the printer, which is located in another city:
a. Prints the material and ships the material to your company for mailing?
b. Prints and mails the material from the printer’s location?
Background
Your company provides direct mail service and is located in [City and County A],
Colorado. The company inserts marketing material into envelops and mails the material
to recipients who presumably are prospective customers of your clients. The marketing
material is printed by another company located in another city and county. The printer
has told you that local sales tax is not due if the printer prints and mails the material to
the recipients, but that local sales tax is due if the printer prints the material and ships
the material to you for addressing and mailing to recipients.

Discussion
As an initial matter, I note that the department does not administer the sales or use taxes
of home-rule cities and counties. Both cities mentioned in your letter are home-rule
cities and/or counties. You may want to contact the revenue departments of these cities
for more information about whether their city sales or use taxes apply to the transactions
you describe. For a complete list of cities, counties and special districts administered by
the department and a list of home rule cities and counties, see our publication DR 1002,
which you can view on our web site at www.revenue.state.co.us and click on Taxation >
Forms > Businesses > Sales and Use.
The department administers sale tax of counties (except for home-rule counties, such as
Denver). The printer is located in the [City B], which straddles two counties ([County C
and D]) whose sales taxes are administered by the department. Therefore, this
response is limited to the sales tax imposed by those two counties.
Both counties impose sales tax on the sale of tangible personal property. For a general
discussion of applicability of sales and use taxes on the sale of printed material by
printers, see DOR FYI Sales 47, which you can view by visiting our web site at
www.revenue.state.co.us and click on Taxation > FYIs > Sales Tax > FYI Sales 47.
However, Colorado law states that a retailer, who delivers its goods to a consumer in
another county, should not collect sales tax of the county in which the retailer resides.
§29-2-105(1)(b), C.R.S. (“[A]ll retail sales are consummated at the place of business of
the retailer unless the tangible personal property sold is delivered by the retailer or his
agent to a destination outside the limits of the local taxing entity or to a common carrier
for delivery to a destination outside the limits of the incorporated town, city, or county.”).
For a general discussion of a retailer’s obligation to collect local sales taxes
administered by the department, see FYI Sales 62.
You should be aware that the [City and County A] may impose a tax on goods delivered
to consumers located within its municipal boundaries. Also, the [City B] may impose a
sale or use tax for goods delivered outside its municipal boundaries. As noted above,
the department does not administer sales or use taxes of these home-rule cities and you
may wish to contact them for more information about their taxes.
Pursuant to state law, the Department is required to make publish redacted responses to
requests for general informational letters. Your letter requesting this informational letter
is not made public. See, §24-35-103.5(13), C.R.S. The regulation governing
informational letters is available on our web site at:
http://www.revenue.state.co.us/taxstatutesregs/3921reg24-35-103.5.html
I enclose a proposed redacted version of this letter. Please contact me within 60 days
from the date of this letter if you have any questions, comments or concerns about the
redacted letter.
I hope this is helpful. Please feel free to contact me if you have any questions.
Sincerely,
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Office of Tax Policy
Colorado Department of Revenue

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