(c) Supporting Documentation. Any seller claiming an exemption for the sale of printed sales messages must obtain and retain supporting evidence of the delivery of the property. (1) Delivery by the Seller. A seller who mails exempt printed sales messages through the United States Postal Service or by common carrier, should obtain and retain U.S. Postal receipts or bills of lading and obtain and retain a timely exemption certificate, taken in good faith, from the purchaser. The exemption certificate should be similar to the following: "I hereby certify that the items purchased are printed sales messages and that the printed sales messages described herein which I shall purchase from __________________________________________________ will be delivered by the seller or the seller's agent through the U.S. Postal Service or by common carrier at no cost to another person who becomes the owner of the printed material. If any of such printed material is determined not to be a printed sales message or is delivered other than as specified above, I understand that I am required by the Sales and Use Tax Law to report and pay tax, measured by the purchase price of such property.
___________________________
Description of property to be purchased:
Date ______________________________, ______
___________________________
Purchaser:
(Company Name)
___________________________
Address:
___________________________
Signature:
(Signature of Authorized Person)
___________________________
Title:
___________________________
Seller's Permit No. of Purchaser (if any)
"
(2) Delivery by Mailing House as Agent for Purchaser. When the seller of printed sales messages delivers the property to a mailing house acting as agent for the purchaser, the contract of sale should specify to whom the property was delivered, and the seller should obtain and retain a timely exemption certificate, taken in good faith from the purchaser, similar to the following: "I hereby certify that the items purchased are printed sales messages and that the printed sales messages described herein which I shall purchase from __________________________________________________, delivered by the seller to the mailing house designated below, will be delivered by the mailing house, acting as my agent, through the United States Postal Service or common carrier at no cost to another person who becomes the owner of the printed material. If any such printed material is delivered other than as specified above, I understand that I am required by the Sales and Use Tax Law to report and pay tax, measured by the purchase price of such property. Description of property to be purchased:
___________________________
Mailing house
(Name)
___________________________
(Address)
Date ______________________________, ______
___________________________
Purchaser:
(Company Name)
___________________________
Address:
___________________________
Signature:
(Signature of Authorized Person)
___________________________
Title:
___________________________
Seller's Permit No. of Purchaser (if any)
"
(3) A copy of the exemption certificate described in subdivision (c)(1) or (c)(2), accepted in good faith, shall relieve the seller from liability for the sales tax for the sale of printed sales messages delivered in accordance with subdivisions (b)(2), (b)(3), and (b)(10) of this regulation. If the seller fails to deliver the printed sales messages in such a manner, the seller will not be relieved from liability for the sales tax, on the ground that an exemption certificate was obtained with respect to the transaction.(4) If a purchaser certifies in writing to a seller that the printed matter is a printed sales message or that the printed sales messages purchased will be delivered in a manner entitling the seller to regard the gross receipts from the sale as exempt from the sales tax and it is determined that the printed matter is not a printed sale message or the purchaser arranges for the delivery of the printed sales messages in some other manner, the purchaser shall be liable for payment of sales tax as if the purchaser were a retailer making a retail sale of the printed matter at the time of such use and the sales price of the printed matter to the purchaser shall be deemed the gross receipts from such retail sale.(5) If a purchaser wishes to designate on each purchase order that the property is an exempt printed sales message, the seller should obtain a qualified exemption certificate, i.e., one that states "see purchase order" in the space provided for a description of the property to be purchased. Each purchase order must then specify whether the property covered by the order constitutes an exempt printed sales message within the provisions of this regulation or whether tax applies to the order. If each purchase order does not so specify, it will be assumed that the property covered by that purchase order is not an exempt printed sales message. If the purchase order includes both exempt printed sales messages and printed matter subject to tax, the purchase order must specify which items are exempt printed sales messages and which items are subject to tax.(6) When the purchaser and seller of printed sales messages enter into an agency agreement for the purchase of envelopes or other printed matter, pursuant to subdivision (b)(10), the purchaser must clearly disclose to the third party supplier the name of the seller for whom the purchaser is acting as an agent prior to, or at the time of purchase. This condition will be met by including on all purchase orders provided to the third party supplier a statement containing the elements noted on the following example: ___________________________
"This order is placed for and on behalf of
___________________________
[printer/principal's name]; seller's permit No.
___________________________
[printer/principal's permit number] located at
___________________________
[address of printer/principal] for whom
[purchaser/agent's name] is acting as agent.
"The order is for ______________________________ [number of envelopes] envelopes to be used as containers for printed sales messages. The envelopes are to be delivered to ______________________________ [mailing house name] for inclusion of the printed sales message.
| ___________________________Date: | ___________________________ |
| | (Signature of Purchaser or Authorized Agent)" |
(7) Pursuant to subdivision (b)(10), prior to the acquisition of the envelopes or other printed matter, the purchaser and seller of the printed sales messages must agree that the purchaser is acting as an agent for the seller with respect to the purchase of envelopes or other printed matter which become incorporated by the seller into the printed sales message sold. This condition will be met by including a statement in a letter of agreement or other such document similar to the following example: "You are hereby authorized to act as our agent in the procurement on our behalf of ______________________________ [number of envelopes] envelopes purchased for resale under seller's permit number ______________________________ [printer/seller's permit number] from ______________________________ [third party supplier's name], located at ______________________________ [address of third party supplier] for inclusion of printed sales messages to be sold and delivered pursuant to Regulation 1541.5.
| ___________________________Date: | ___________________________ 19 | ___________________________ |
| | (Signature of Printer/Seller)" |
(8) The fact that the seller/principal of the printed sales messages may not formally reimburse the purchaser/agent with respect to the acquisition of envelopes or other printed matter from the third party supplier will not invalidate the agency relationship between the seller and purchaser of printed sales messages when all other provisions of this regulation are met. Note: Authority cited: Section 7051, Revenue and Taxation Code. Reference: Sections 6379.5 and 6421, Revenue and Taxation Code.