Oklahoma – Direct Mail Sourcing Rule Amended

SALT Report 1320 – An Oklahoma rule governing the definition of direct mail has been amended to conform to the Streamlined Sales and Use Tax Agreement. The amendment provides updated definitions and guidance regarding “advertising and promotional direct mail” and “other direct mail.” Prior to the amendment these terms were not defined under Oklahoma law.

Advertising and Promotional Direct Mail

Advertising and promotional direct mail is now defined as “any printed material that meets the current definition of direct mail for which the primary purpose is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization.”  Product is now defined as tangible personal property, a product transferred electronically, or a service.

Purchasers of advertising and promotional direct mail that do not hold a direct pay permit must provide the seller a Direct Mail Form or information showing the jurisdictions where the advertising and promotional direct mail will be delivered.  If the seller receives the form, the seller is relieved of the obligation to collect, pay, or remit the applicable tax and the purchaser must pay or remit the tax on a direct pay basis. The Direct Mail Form will remain in effect for all future direct mail sales by the seller to that purchaser until written notification is received terminating the form.

If the seller receives information from the purchaser showing the jurisdictions to which the direct mail is delivered, the seller must collect the tax according to the delivery information provided by the purchaser.  Absent misrepresentation, the seller is relieved of the obligation to collect tax on any transaction where the seller has collected tax according to the delivery information provided by the purchaser.

If a direct mail purchaser does not have a direct pay permit and does not provide the seller with a Direct Mail Form or delivery information, the seller must collect sales tax based on the address from where the tangible personal property was shipped or from where the service was provided. If a purchaser of direct mail provides the seller with valid direct pay documentation, the purchaser is not required to provide a Direct Mail Form or delivery information to the seller.

Other Direct Mail

The amended rule specifically states that sales of “other direct mail” are not subject to sales tax under the state’s sales tax code. Other direct mail is defined under the amended rule as “any direct mail that is not advertising and promotional direct mail,” regardless of whether advertising and promotional direct mail is included in the same mailing. Other direct mail does not include the development of billing information or the provision of any data processing service that is incidental.

Other direct mail includes, but is not limited to:

  • Transactional direct mail that contains personal information specific to the addressee, such as bills or account statements.
  • Legally required mailings, such as privacy notices, tax reports, or stockholder reports; and
  • Other non-promotional direct mail, such as newsletters and informational pieces, delivered to current or former shareholders, customers, employees, or agents.

For Further Information:

Oklahoma Tax Commission – Rule 710:65-18-6