Advertising materials that are printed outside Tennessee then subsequently shipped to Tennessee for temporary storage at a taxpayer’s distribution center before being distributed outside the state are not subject to Tennessee use tax. If the materials are shipped from the distribution center in Tennessee to locations within Tennessee, the use tax is imposed. The use tax liability for printed advertising materials remaining in Tennessee is determined based upon the “entire cost” of designing and printing the materials.This includes costs paid to design and develop the advertising materials, printing costs, transportation costs, and any other expense paid by the taxpayer to produce the materials, regardless of where the expenses were incurred.If the state where the advertising materials are printed imposes use tax on the advertising materials and the taxpayer pays the use tax, the amount of tax paid to that state can be credited against Tennessee use tax due. (Revenue Ruling No. 12-31, Tennessee Department of Revenue, November 29, 2012)