Iowa Code 423.19 – Direct mail sourcing
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1. Notwithstanding section 423.15, the following provisions apply to sales of advertising and promotional direct mail:
a. A purchaser of advertising and promotional direct mail may provide the seller with one of the following:
(1) A direct pay permit.
(2) An agreement certificate of exemption claiming to be direct mail, or a similar written statement, if the statement is approved, authorized, or accepted by the department.
(3) Information showing the jurisdiction to which the advertising and promotional direct mail is to be delivered to the recipient.
b. (1) If the purchaser provides the seller a permit, a certificate of exemption, or an approved written statement pursuant to paragraph “a”, subparagraph (1) or (2), then, in the absence of bad faith, the seller is relieved of the obligation to collect, pay, or remit tax on a transaction involving advertising and promotional direct mail to which the permit, certificate, or approved written statement applies. In such a transaction, the purchaser shall source the sale to the jurisdiction in which the advertising and promotional direct mail is to be delivered to the recipient and shall report and pay any tax due accordingly.
(2) If the purchaser provides the seller information showing the jurisdiction to which the advertising and promotional direct mail is to be delivered pursuant to paragraph “a”, subparagraph (3), the seller shall source the sale to the jurisdiction in which the advertising and promotional direct mail is to be delivered and shall collect and remit the tax due accordingly. If the seller has sourced the sale according to the delivery information provided by the purchaser, then, in the absence of bad faith, the seller is relieved of any further obligation to collect tax on the sale of the advertising and promotional direct mail.
c. (1) If the purchaser fails to provide the seller with one of the items listed in paragraph “a”, the sale shall be sourced pursuant to the sourcing directive described in section 423.15, subsection 1, paragraph “e”.
(2) If a sale is sourced to this state pursuant to subparagraph (1), the full amount of the tax imposed by subchapter II or III, as applicable, is due from the purchaser, notwithstanding section 423.22.
Terms Used In Iowa Code 423.19
- Advertising and promotional direct mail: means direct mail the primary purpose of which is to attract public attention to a product, person, business, or organization or in an attempt to sell, popularize, or secure financial support for a product, person, business, or organization. See Iowa Code 423.1
- Agreement: means the streamlined sales and use tax agreement authorized by subchapter IV of this chapter to provide a mechanism for establishing and maintaining a cooperative, simplified system for the application and administration of sales and use taxes. See Iowa Code 423.1
- Department: means the department of revenue. See Iowa Code 423.1
- Direct mail: includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. See Iowa Code 423.1
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Other direct mail: means all direct mail that is not advertising and promotional direct mail even if advertising and promotional direct mail is included in the same mailing. See Iowa Code 423.1
- Purchaser: is a person to whom a sale of personal property is made or to whom a service is furnished. See Iowa Code 423.1
- Sale: means any transfer, exchange, or barter, in any manner or by any means whatsoever, for a consideration, and includes and means all sales made by any person. See Iowa Code 453A.42
- sale: includes a rental. See Iowa Code 423.1
- seller: includes an affiliated group of sellers using the same proprietary system. See Iowa Code 423.1
- State: means any state of the United States, the District of Columbia, and Puerto Rico. See Iowa Code 423.1
2. Notwithstanding section 423.15, sales of other direct mail are subject to all of the following:
a. Except as otherwise provided in this subsection, the sale of other direct mail shall be sourced pursuant to the sourcing directive described in section 423.15, subsection 1, paragraph “c”.
b. A purchaser of other direct mail may provide the seller with either of the following:
(1) A direct pay permit.
(2) An agreement certificate of exemption claiming to be direct mail, or a similar written statement, if the statement is approved, authorized, or accepted by the department.
c. (1) If the purchaser provides the seller a permit, a certificate of exemption, or an approved written statement pursuant to paragraph “b”, then, in the absence of bad faith, the seller is relieved of the obligation to collect, pay, or remit tax on a transaction involving other direct mail to which the permit, certificate, or approved written statement applies.
(2) Notwithstanding paragraph “a”, the sale of other direct mail under the circumstances described in subparagraph (1) shall be sourced to the jurisdiction in which the other direct mail is to be delivered to the recipient, and the purchaser shall report and pay any tax due accordingly.