Does a company owe Utah use tax on brochures and catalogs it mails to Utah customers from out of state at no charge?

Plain-English summary

A law firm representing a Fortune 500 manufacturer with sales offices and manufacturing operations in multiple states asked how Utah treats printed marketing literature (brochures, catalogs, pamphlets) mailed at no charge to customers, when the literature's design, printing, and mailing all happen entirely outside Utah. The firm specifically noted there was no dispute about the company having Utah sales tax nexus.

The Commission's answer: advertising materials mailed to customers in Utah are subject to Utah use tax, regardless of where they're mailed from. Use tax reaches "personal property stored, used or consumed" in Utah (§ 59-12-103), and "use" — "the exercise of any right or power over tangible personal property" (§ 59-12-102) — is interpreted broadly enough to cover direct mailing or distribution of items like advertising brochures. So it doesn't matter whether the piece was mailed from within Utah or from another state; delivering it to a Utah customer triggers Utah use tax. Utah's law, like many states', includes a reciprocity credit for tax already properly paid to another state on the same material, avoiding double taxation.

Separately, if the company produces the advertising materials in Utah itself, it must pay Utah sales tax on the items it purchases or uses in Utah to produce them, per Rule R865-19S-65 (the Commission's specific rule governing taxation of advertising materials — described as having no other special exceptions for advertising materials beyond what that rule covers). Whether the company would also owe use tax to another state for materials it mails there from Utah depends on that other state's own laws, not Utah's.

What this means for you

Companies mailing marketing literature into Utah

Expect Utah use tax on brochures, catalogs, and pamphlets you mail to Utah customers — even if the pieces are free, and even if everything about producing and mailing them happens entirely outside Utah. Check whether you already paid sales/use tax on the same materials to another state, since Utah's reciprocity credit can offset what you owe here.

Companies that produce their own advertising materials in Utah

If you design or print your own marketing materials using Utah-based facilities, labor, or purchased inputs, you separately owe Utah sales tax on what you buy or use here to produce them — apply Rule R865-19S-65 to figure out the specifics, since it's the Commission's dedicated rule for advertising materials with no other special carve-outs.

Multi-state businesses coordinating marketing mailings

Track where each mailing originates and where it's delivered — Utah taxes based on delivery into the state regardless of mailing origin, and whether you owe a different state's tax on outbound mailings from Utah depends entirely on that other state's own law, not Utah's.

Common questions

Q: Does mailing free brochures into Utah from another state trigger Utah tax?
A: Yes — Utah use tax applies to advertising materials delivered to Utah customers regardless of where they were mailed from.

Q: What if I already paid tax on the same materials to the state I mailed them from?
A: Utah has a reciprocity provision giving credit for tax already properly paid to another state on the same property.

Q: Do I owe tax if I produce my own advertising materials using Utah facilities?
A: Yes — separately from the mailing/use tax, you'd owe Utah sales tax on items purchased or used in Utah to produce the materials, under Rule R865-19S-65.

Q: Can I rely on this 1997 ruling today?
A: Not directly — it binds the Commission only for the taxpayer and facts it addressed, and Utah's statutes and rules have been renumbered and amended repeatedly since. Verify current law before relying on it.

Citations and references

Statutes:

• Utah Code Ann. § 59-12-103 (tax on personal property stored, used, or consumed in Utah)
• Utah Code Ann. § 59-12-102 (definition of "use")

Rules:

• Utah Admin. Rule R865-19S-65 (taxation of advertising materials)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original PDF: https://files.tax.utah.gov/tax/commission/ruling/97-059.htm

Original ruling text

97-059

Response October 7, 1997

August 19,
1997

Re: Request
for Written Advice

To Whom It May Concern:

I am request your legal opinion on the application
of Utah sales/use tax to printed

marketing literature, ie. brochures, catalogs,
pamphlets, etc. The Fortune 500 company that I represent has sales offices in
every state. In addition to sales
offices, this company also has manufacturing operations in several states. In order to market its manufactured products
this company often makes or contracts for mass mailings of promotional
literature. Such literature is

received by customers in your state at no charge via
the U.S. mail. The design, printing,
and

mailing of this marketing literature occurs outside
your state.

In order for me to provide guidance to my client
regarding the taxability of such printed literature, I would appreciate your
written opinion on the following questions:

1. Is a
   use tax liability incurred by my client for printed literature mailed into your
   state?

2. If
   the state from where the printed literature was mailed did or did not impose a sales
   or use tax on the mailing of the printed literature, would this affect the
   answer to Question 1 above?

3. If a
   large mailing of printed literature as mailed within your state to recipients
   outside and within your state would the entire mailing be subject to sales or
   use tax only the portion of the mailing that remained within your state?

4. Does
   your state allow for special sales or use tax treatment of printed marketing
   literature in your state, ie. brochures, catalogs, pamphlets etc.?

Thank you for your assistance in this matter. Your
prompt response will assure accurate state

sales and use tax compliance surrounding this issue.

Regards,

NAME

NAME

ADDRESS

CITY STATE ZIP

Advisory Opinion - Sales tax on printed materials
distributed in or from Utah

Dear NAME,

We
have received your request for sales tax guidance pertaining to distribution of
printed advertising material by your client or your client�s agent. We note that with regard to your client
there is no issue concerning nexus. We
offer the following:

Advertising
brochures, catalogs, pamphlets mailed by your client to customers in Utah are
subject to Utah use tax. Utah Code Ann.
section 59-12-103 levies a tax on �personal property stored, used or consumed
in this state.� �Use� means �the
exercise of any right or power over tangible personal property,� Utah Code
Ann.�59-12-102, and we interpret the provision broadly to encompasses direct
mailing or distribution of items such as the items in question here. Any advertising materials delivered to
customers in Utah are subject to our use tax, whether mailed from within Utah
or from outside Utah. Utah�s law, like
that of many states, has a reciprocity provision that allows a credit for tax
that is first due and properly paid in another state.

If
your client produces advertising materials in Utah, your client must pay sales
tax on items purchased or used in Utah to produce the advertising as outlined
in Utah Administrative Rule R865-19S-65 (copy enclosed). Whether your client is also liable for use
tax in another state for materials mailed to another state from Utah depends
upon the sales and use tax laws of the
state in question.

Rule
R865-19S-65 outlines the rules governing taxation of advertising
materials. There are no other special
provisions that apply especially to advertising materials.

Please
let us know if you have other questions.

For
the Commission,

Joe
B. Pacheco,

Commissioner

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