Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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432.0000 PRINTED SALES MESSAGES—Regulation 1541.5

Annotation 432.0041

432.0041 Exemption Certificate—Advertising Agencies. An exemption certificate as specified by Regulation 1541.5(c) should not be issued by an advertising agency in its own name when purchasing printed sales messages from a printer. However, the advertising agency could issue the exemption certificate if it establishes that it is acting as an agent for its client in the particular purchase. Specifically, it must clearly disclose to the printer that it is acting as agent for its client. It must obtain, prior to the purchase, and retain written evidence of the agent status with its client. The price billed to its client must be the same as the amount charged by the printer exclusive of any agency fee.

The same rules apply to issuing an exemption certificate as those which apply to a resale certificate. That is, the advertising agency that purchases tangible personal property on behalf of its client may not issue an exemption certificate in its own name to the supplier. It will be presumed that an advertising agency who issues an exemption certificate to its suppliers is purchasing the property on its own behalf and is not acting as an agent for its client. (Regulation 1540(a)(2)(A).)

In addition, the printed sales messages must be delivered in accordance with the requirements in Regulation 1541.5(b)(2) and (3) for the sales to be exempt from the sales tax. 2/27/96.