Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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340.0000 MAILING LISTS AND SERVICES—Regulation 1504

Annotation 340.0170

340.0170 Rentals of Mailing Lists. A contract states that a company may provide a mailing list to a proposed direct mail user only if approved in writing by an officer of the list owner and for the purpose and in the manner set forth in the proposal. The company agrees that, if the list owner does not approve the use, the company will not use the mailing list in accordance with the proposal or otherwise. The company agrees that it will provide the list to a direct mail user only in accordance with a written agreement between the company and the direct mail user, which in form and substance has been approved in writing by the list owner. The company shall not, in any way, bind or incur obligations on behalf of the list owner without the express written approval of the list owner. The company keeps a percentage of the rental receipts for its service and the remainder (called royalties on the books) goes to the list owner as rental income belonging to the list owner for rental of its property.

The company is acting as a list broker or agent for the rental of these mailing lists. The provisions of the agreement indicate that, while the company has possession of the mailing lists and the company transfers the lists to the customers, the lists will not be rented until the list owner has approved the transaction. It is the list owner, not the company, who is making a taxable rental of the mailing lists. The amount subject to tax includes the total amount paid by the customer including the amount designated as a royalty. 10/18/88.