Saturday, March 10, 2012

Revenue Finds Direct Mailers Subject to Use Tax


Taxpayer protests the imposition of use tax on direct mailers and associated postage.

DISCUSSION

Taxpayer protests the imposition of use tax on amounts it paid direct mail vendors to send bills to customers.

Taxpayer states that the direct mailings are a service and thus are not taxable.  Taxpayer also states that the postage paid to the direct mail vendors is not taxable.


Regarding the direct mailers, the Department only imposed use tax on those mailers sent to Indiana customers.


In conclusion, the invoices list a total combined charge for services and tangible personal property.  The transactions in question are unitary transactions subject to sales and use taxes, as provided by IC 6-2.5-1-1(a).  The invoices do not establish that the value of the tangible personal property transferred is less than ten percent of the service charge and so do not establish that the transactions qualify for the exemption defined under 45 IAC 2.2-4-2.  The postage is properly included as subject to use tax, as provided by IC § 6-2.5-1-5(a).

Taxpayer has not met the burden of proving the proposed assessments wrong, as required by IC § 6-8.1-5-1(c).

FINDING

Taxpayer's protest is denied.

http://www.in.gov/legislative/iac/20120229-IR-045120083NRA.xml.pdf