This Technical Information Release ("TIR") is issued in response to St. 1995, Chapter 38, § 86, which amended G.L. c. 64H, § 6(ff) [hereinafter "section 6(ff)"], to expand the sales tax exemption for certain sales of printed material delivered through the mails. The purpose of this TIR is to explain the effect of the amendment on the availability of the sales tax exemption under section 6(ff). Section 6(ff) provides the following exemption with the recently amended portion indicated in bold:

Sales of printed material which is manufactured in the commonwealth to the special order of a purchaser, to the extent such material is delivered to an interstate carrier, a mailing house or a United States Post Office for delivery or mailing to a purchaser located outside the commonwealth or a purchasers [sic] designee located outside the commonwealth, including sales of direct and cooperative direct mail promotional advertising materials which are manufactured both inside and outside the commonwealth and which are distributed to residents of the commonwealth from locations both inside and outside the commonwealth. For the purpose of this paragraph, "direct and cooperative direct mail promotional advertising materials" shall mean discount coupons, advertising leaflets and similar printed advertising including any accompanying envelopes and labels which are distributed with promotional advertising materials of one or more than one business in a single package to potential customers, at no charge to the potential customer, of the business paying for the delivery of such material.

Section 6(ff), exempts sales of printed material manufactured to the special order of a purchaser and delivered to an interstate carrier, a mailing house or a United States Post Office, for delivery to a purchaser or purchaser's designee located out of state. Effective July 1, 1995, sales of direct mail promotional advertising, delivered in that manner to Massachusetts residents free of charge, also are included under the exemption. Prior to the amendment, such sales were subject to the Massachusetts sales tax. The exemption only applies for certain sales of promotional advertising. The limitations on the section 6(ff) exemption are explained below.

First, the statutory change provides an exemption for sales of direct mail promotional advertising consisting of discount coupons, advertising leaflets and similar printed advertising only. Sales of envelopes containing discount or advertising coupons of various vendors fall within this exemption. Advertising leaflets and similar printed advertising falling within the exemption typically will consist of a single sheet of advertising, or multiple single sheets of advertising of various vendors included together in a single package as part of a cooperative mailing effort. The section 6(ff) exemption does not apply to sales of items such as department store or mail order catalogs, or publications of real estate listings. Additionally, sales of product samples or other items included with direct mail promotional advertising, such as shampoos, detergents, pain relievers, pens and calendars, are not exempt from tax under section 6(ff).
Secondly, the exemption applies only to promotional advertising printed for the sole purpose of advertising or promoting goods or services. It does not apply to printed material provided for other than the sole purpose of advertising or provided for mixed purposes such as newsletters, reference guides, resource directories, campaign or fund raising literature, educational publications, and any similar materials that contain advertising materials along with other information, even where the principal purpose of such material is advertising. But cf. G.L. c. 64H, § 6(m)(for other exemptions which might apply).

Third, to be eligible for exemption, direct mail promotional advertising material must be delivered to an interstate carrier, a mailing house or a United States Post Office for delivery or mailing directly to potential customers at their home addresses or places of business free of charge. Promotional advertising to be distributed by any means other than direct mailing to the potential customer will not qualify for exemption. Accordingly, sales of coupons delivered to a vendor and then re-delivered to a mailing house to be included in a cooperative mailing effort are not exempt.

/s/Mitchell Adams
Mitchell Adams
Commissioner of Revenue

June 14, 1996

TIR 96-5