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Taxable and Exempt Direct Mailings in Massachusetts

  • Oct 23, 2014 | Gail Cole

 Massachusetts: taxation of direct mailings clarified.

Massachusetts Department of Revenue issued a directive to clarify the requirements for that exemption.

Direct and cooperative mail promotional advertising materials must meet all of the following criteria in order to qualify for an exemption from Massachusetts sales tax:

  • Materials must be discount coupons or promotional advertising materials or leaflets incorporating coupons. Coupon here is defined as “(a) a piece of printed paper, (b) a scan card, or (c) a code or other identifier that, upon presentation to a vendor, allows a retail customer to receive a service or product for free or at a lower price.”
  • Materials must be no greater than six pages in length.
  • Materials must qualify as direct mail advertising and be distributed by U.S. main (or other common carrier). The materials may be part of a package of materials promoting one or more than one business.
  • Materials are distributed at no charge to the potential customer.
  • Materials must not be “mixed use publications” (see TIR 04-26).

Under the directive, the retail customer must be required to do one of the following:

  • Present the coupon to the vendor at the time of purchase. OR
  • Otherwise identify the special offer to the vendor at the time of redemption to receive the free item or discounted price.

Not exempt

Printed materials that make a general announcement of a sales price available to all customers “do not qualify as a coupon for purposes of the Directive.”

Mail order catalogs, department store catalogs, telephone directories, and similar printed advertising books that are greater than 6 pages in total length do not meet the definition of “direct and cooperative direct mail promotional advertising materials.”

Promotional advertising material distributed by any means other than via an interstate carrier, mailing house, or United States Post Office will not qualify for exemption. For example, “sales of coupons delivered to a vendor and then re-delivered to a mailing house to be included in cooperative mailing effort will not be exempt.”

Advertising distributed by bulk mailing to all residents in a zip code or other geographical area is also not exempt as it does not qualify as direct mail.

Directive 14-3 provides further examples of exempt and taxable mailings.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
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.