Sales Tax State Activity Update - March 2004

Email Marketing Campaign Taxable in Texas

A Texas company was hired by an out -of-state client to do an email marketing campaign. This Texas advertising firm rented names and email address for its out-of- state client for the purpose of sending the emails containing the text it has created. The advertising company never actually took possession of the email lists.

At issue is whether sales tax should be charged for the email marketing campaign. The Tax Policy Division ruled that if the campaign is performed for a single charge, it is a non-taxable service. Therefore, the advertising firm would be required to pay tax on any taxable items or services it purchased to create the campaign.

(Letter No. 20031123L, Sales and Use, Texas Comptroller of Public Accounts, 2/17/04) 03/04

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