Ohio – Direct Mail Sourcing and Definitions

SALT Report 2862 – The Ohio Department of Taxation issued guidance regarding direct mail sourcing for sales and use tax purposes.  The information release defines specific direct mail terms and explains how to source “other direct mail” and “advertising and promotional direct mail.”

Other Direct Mail

Generally, sales of other direct mail are sourced “to the location indicated by an address for the purchaser that is available from the vendor’s business records that are maintained in the ordinary course of the vendor’s business, when use of that address does not constitute bad faith.”

To make exempt purchases of other direct mail, the purchaser may provide their vendor with either:

  • A direct pay permit, or
  • A certificate of exemption indicating “direct mail,” or a written statement that includes the purchaser’s name and business address; a vendor’s license or seller’s account number, if any; the name of the seller; the reason for exemption; and the signature of the purchaser.

Advertising and Promotional Direct Mail

Sales of advertising and promotional direct mail should be sourced to the address to which it will be shipped. To make exempt purchases of advertising and promotional direct mail, the purchaser may provide their vendor with either:

  • A direct pay permit, or
  • A certificate of exemption indicating “direct mail” or a written statement that includes the purchaser’s name and business address; a vendor’s license or seller’s account number, if any; the name of the seller; the reason for exemption; and the signature of the purchaser, or
  • Information identifying the jurisdictions of the recipients to which the advertising and promotional direct mail will be delivered

If the purchaser provides the vendor with information that identifies the jurisdictions to which the “advertising and promotional direct mail” is to be delivered, the vendor should source the sale to those jurisdictions and collect and remit the appropriate tax. If the certificate is accepted in good faith, the vendor will be relieved of its obligation to collect additional taxes so long as the vendor has sourced the sale according to the delivery information provided by the purchaser.

However, the purchaser will be required to report and pay use tax to the jurisdictions in which the recipients of the advertising and promotional direct mail are located, if the vendor does not collect sales tax in those jurisdictions.

For vendors of other direct mail and advertising and promotional direct mail, if the purchaser provides a permit, certificate, or other statement as described above, and the vendor accepts it in good faith, the vendor will be relieved of its obligations to collect and remit tax on transactions involving sales made with the certificate or statement. However, the purchaser will be required to report and pay any applicable taxes due to the jurisdictions in which the recipients of the “other direct mail” are located.

For Further Information

Ohio Department of Taxation – ST 2013-01 – Direct Mail Sourcing and Definitions