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Ohio: Sales Tax, Sourcing and Direct Mailings


 Ohio explains how sales tax applies to direct mailings.

Many small businesses rely on direct mail marketing for business. The vast majority of these businesses are upstanding and work to comply with state and local tax laws. However, since direct mailings are often handled (taxed) differently in different states and different localities, the task of accurately accounting for those taxes can keep a small businessperson up at night.

The issue boils down to sourcing. How direct mail is sourced impacts how it is taxed, and sourcing is complicated. Years ago, the National Federation of Independent Business sent a Streamlined Sales Tax Governing Board. It reads, in part:

"Direct mail sourcing is extremely complicated for small businesses located in states with local sales tax jurisdictions."

In an attempt to Department of Taxation has created an Information Release on the subject. In it, sourcing rules for advertising and promotional direct mail and "other direct mail" are explained.

Advertising and promotional direct mail

Advertising and promotional direct mail is defined as printed material meeting the definition of direct mail in R.C. 5739.01(ZZ) that is created 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."

Advertising and promotional direct mail is sourced to the address from which the tangible personal property was shipped.

Vendors are relieved of their obligation to collect sales tax on transactions involving advertising and promotional direct mail when the purchaser provides a vendor with one of the following:

  • "A direct pay permit; or
  • A fully completed certificate of exemption claiming 'direct mail.'"

In this event, the purchaser must remit the applicable use tax on these transactions.

If the purchaser provides the vendor with information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to the recipients, the vendor must source the sale to those jurisdictions and collect and remit the applicable tax.

Other direct mail

Other direct mail is defined as:

  • Transactional direct mail that contains the addressee's personal information, such as invoices and bills;
  • Legally required mailings such as privacy notices and stockholder reports; and
  • Other non-promotional direct mail sent to existing or former customers, employees, shareholders, etc, such as newsletters and informational pieces.

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."

Vendors are relieved of their obligation to collect and remit sales tax on transactions involving direct mail when the purchaser provides one of the following:

  • "A direct pay permit; or
  • A fully completed certificate of exemption claiming 'direct mail.'"

In this event, the purchaser must remit the applicable use tax on these transactions.

Confused? Call the Ohio Department of Taxation at 1.888.405.4039.

Or let someone else handle all your business sales tax needs.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.