North Dakota Code 57-39.4-14 – (313) Direct mail sourcing
1. For purposes of this section:
Terms Used In North Dakota Code 57-39.4-14
- following: when used by way of reference to a chapter or other part of a statute means the next preceding or next following chapter or other part. See North Dakota Code 1-01-49
- 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.
- Organization: includes a foreign or domestic association, business trust, corporation, enterprise, estate, joint venture, limited liability company, limited liability partnership, limited partnership, partnership, trust, or any legal or commercial entity. See North Dakota Code 1-01-49
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
- written: include "typewriting" and "typewritten" and "printing" and "printed" except in the case of signatures and when the words are used by way of contrast to typewriting and printing. See North Dakota Code 1-01-37
a. “Advertising and promotional direct mail” means:
(1) Printed material that meets the definition of direct mail, in appendix C, part I of the agreement; and
(2) The primary purpose of which is 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. As used in this subsection, the word “product” means tangible personal property, a product transferred electronically, or a service.
b. “Other direct mail” means any direct mail that is not advertising and promotional direct mail regardless of whether advertising and promotional direct mail is included in the same mailing. The term includes:
(1) Transactional direct mail that contains personal information specific to the addressee, including invoices, bills, statements of account, and payroll advices; (2) Any legally required mailings, including privacy notices, tax reports, and stockholder reports; and
(3) Other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents, including newsletters and informational pieces.
Other direct mail does not include the development of billing information or the provision of any data processing service that is more than incidental.
2. Notwithstanding sections 57-39.4-11 and 57-39.4-11.1, 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 either:
(1) A direct pay permit; (2) A streamlined sales and use tax agreement certificate of exemption claiming direct mail or other written statement approved, authorized, or accepted by the state; or
(3) Information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to recipients.
b. If the purchaser provides the permit, certificate, or statement referred to in this subsection, the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving advertising and promotional direct mail to which the permit, certificate, or statement applies. The purchaser shall source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered to the recipients and shall report and pay any applicable tax due.
c. If the purchaser provides the seller information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to recipients, the seller shall source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered and shall collect and remit the applicable tax. In the absence of bad faith, the seller is relieved of any further obligation to collect any additional tax on the sale of advertising and promotional direct mail where the seller has sourced the sale according to the delivery information provided by the purchaser.
d. If the purchaser does not provide the seller with any of the items listed in this subsection, the sale shall be sourced according to subdivision e of subsection 1 of section 57-39.4-11. The state to which the advertising and promotional direct mail is delivered may disallow credit for tax paid on sales sourced under this subdivision.
3. Notwithstanding sections 57-39.4-11 and 57-39.4-11.1, the following provisions apply to sales of other direct mail:
a. Except as otherwise provided in this subsection, sales of other direct mail are sourced in accordance with subdivision c of subsection 1 of section 57-39.4-11. b. A purchaser of other direct mail may provide the seller with either:
(1) A direct pay permit; or
(2) A streamlined sales and use tax agreement certificate of exemption claiming direct mail or other written statement approved, authorized, or accepted by the state.
c. If the purchaser provides the permit, certificate, or statement referred to in this subsection, the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving other direct mail to which the permit, certificate, or statement applies. Notwithstanding subdivision a, the sale shall be sourced to the jurisdictions to which the other direct mail is to be delivered to the recipients and the purchaser shall report and pay any applicable tax due.
4. a. This section applies to a transaction characterized under state law as the sale of services only if the service is an integral part of the production and distribution of printed material that meets the definition of direct mail.
b. This section does not apply to any transaction that includes the development of billing information or the provision of any data processing service that is more than incidental regardless of whether advertising and promotional direct mail is included in the same mailing.
c. If a transaction is a “bundled transaction” that includes advertising and promotional direct mail, this section shall apply only if the primary purpose of the transaction is the sale of products or services that meet the definition of advertising and promotional direct mail.
d. Nothing in this section shall limit any purchaser’s:
(1) Obligation for sales or use tax to any state to which the direct mail is delivered; (2) Right under local, state, federal, or constitutional law, to a credit for sales or use taxes legally due and paid to other jurisdictions; or
(3) Right to a refund of sales or use taxes overpaid to any jurisdiction.
e. This section applies for purposes of uniformly sourcing direct mail transactions and does not impose requirements on states regarding the taxation of products that meet the definition of direct mail or to the application of sales for resale or other exemptions.