Important Sales Tax Information

    If you are being charged an incorrect sales tax rate on Mary Kay product orders shipped to the address on your Mary Kay file, you may want to consider one of the following options depending on your situation:

• Obtain a document that is clearly from a local taxing authority, referencing the full physical address on your Mary Kay file and stating the proper taxing jurisdiction and tax rate for your address. This will allow the Sales Tax Department to adjust your tax rate for Mary Kay product orders shipped to your address. Please mail this document to the following address:

  Mary Kay Inc.
  Sales Tax Department/Tax Assistant
  P O Box 799045
  Dallas, TX 75379-9045
  

  (Documents submitted to your distribution branch could cause a delay in processing your sales tax rate change.)

  Note: Unfortunately, when you ship to an address other than the address on your Mary Kay file you will continue to be charged the highest tax rate in that local area. In addition, new documentation will have to be submitted to the Sales Tax Department if you move or change your address on your Mary Kay file.

• If you sell products to customers in lower sales tax areas than the sales tax rate you are charged, you may apply for a refund on the non-recovered portion of sales tax. To apply for a refund simply request a form titled "Sales Tax Refund Claim Form" from your branch or you may obtain a form through Mary Kay InTouch. Remit this form signed, along with copies of your retail sales tickets, to your branch. Or, you may deduct this non-recovered portion of sales tax on your Federal Income Tax Return, Schedule C.

• Depending on your state, you may apply for a sales tax license with the state. The sales tax license must be in your name, not a company name. You also must have approval from the Mary Kay Inc. tax department in Dallas. Once you have obtained approval, the Company will no longer charge you sales tax. You will be responsible for collecting and remitting sales and use tax directly to your taxing jurisdiction.

FOR YOUR INFORMATION: Mary Kay Inc. implemented the use of a new sales tax package known as Vertex in early 2000. When you place an order by telephone, mail or through Mary Kay InTouch, the Vertex system automates the sales tax collection process by applying consistent tax rates to all orders shipped to a specific location. This also means you can place an order and have it delivered to a different ship to address other than your own and the Vertex system determines the sales tax rate for the address you are shipping to. However, the Vertex sales tax system also charges the highest rate for a local area, which will prevent underpayment of taxes to your local area. Many of you sell product across taxing jurisdiction lines, and each sale could be subject to different tax rates. Therefore, when the system charges the highest rate for the shipping addresses in a local area it reduces your potential liability. All sales taxes collected by Mary Kay Inc. are remitted to your local taxing jurisdictions, as required by law. For additional tax information, please visit Mary Kay InTouch.