How did Florida tax installed monuments, funeral-related monuments, dealer materials, animal memorials, and out-of-state installers?

Subject

Sale of Monuments and Monument Products and Services

Plain-English summary

A customer did not owe sales tax on a monument installed at the customer's chosen location or sold with a funeral or burial service. The installer or funeral provider instead owed sales or use tax when purchasing the monument and materials consumed in providing that installed or funeral-related memorial.

Items previously bought tax-free for resale became subject to use tax when converted to installed memorials. The same framework applied to animal memorials. Registered out-of-state sellers had to collect Florida tax on materials delivered to Florida dealers; otherwise the Florida buyer owed use tax. Out-of-state monument dealers installing in Florida followed the same rules as Florida installers.

What this means for you

Florida treated the installer as the consumer of materials for an installed memorial. A resale certificate was appropriate only when a dealer truly resold the monument without installation or funeral services and collected tax from the customer.

Common questions

Q: Did the installer collect tax from the customer on an installed monument? No.

Q: Who paid tax on the monument and materials? The installer or funeral-service provider.

Q: Did the same rules cover animal memorials and out-of-state installers? Yes.

Citations and references

• Fla. Stat. §§ 212.05(1)(b), 212.06(1)(a), and 212.07(2), (8) — sales, use, collection, and purchaser liability
• Fla. Stat. § 212.08(2)(a) — funeral exemption
• Fla. Stat. § 212.17 and Fla. Admin. Code r. 12A-1.013 — credit on later resale
• Fla. Admin. Code rr. 12A-1.026 and 12A-1.035 — monuments and funeral-related merchandise
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01A-016

Original ruling text

SUMMARY

QUESTION: Is the sale of tombstones and other monuments
that are installed at the purchaser's designated location
or sold in conjunction with the sale of a funeral or burial
service subject to sales tax?

ANSWER - Based on Facts Below: No. The sale of a monument
that is installed at the customer's designated location is
not subject to Florida sales tax, and the seller is not
required to collect sales tax from the customer. However,
purchases of monuments, monument products, and other items
that are delivered into Florida to be installed at the
customer's designated location or used in providing a
funeral or burial service are subject to sales and use tax
at the time of purchase by the installer or the provider of
the funeral or burial service.

QUESTION: Do the same guidelines regarding the taxability
of the sale of monuments and monuments services that are
used to memorialize human remains apply to those products
and services used to memorialize animal remains?

ANSWER - Based on Facts Below: Yes. These guidelines apply
whether the memorial is used to memorialize human remains
or animal remains.

QUESTION: Are monument dealers required to pay Florida
sales and use tax on materials used to construct monuments
that are imported from out-of-state sellers?

ANSWER - Based on Facts Below: Yes. When an out-of-state
seller is registered with the Department as a sales tax
dealer, the dealer is required to collect Florida sales tax
on the retail sale of goods shipped to, or delivered to, a
Florida monument company. In the event that the out-ofstate seller is not registered with the Department as a
Florida dealer or the dealer does not separately state
"Florida sales tax" on the invoice or other evidence of
sale, the Florida monument company will be held liable for
payment of use tax on the purchased goods.

QUESTION: Are out-of-state monument dealers required to pay
Florida sales and use tax on materials they use to
construct or install monuments in Florida?

ANSWER - Based on Facts Below: Yes. Any person who
installs monuments in this state is subject to the same
laws and provisions regarding the collection and payment of
Florida sales and use tax as those that pertain to monument
dealers located in Florida.

Mar 15, 2001

Re: Technical Assistance Advisement 01A-016
Florida Sales Tax on the Sale of Monuments and Monument
Products and Services
Sections 212.05(1)(b) and 212.08(2)(a), F.S.
Taxpayer: XXX ("Taxpayer")

Dear :

This response is to your petition of [date received], requesting
the Department's issuance of a Technical Assistance Advisement
(TAA) pursuant to s. 213.22, F.S., and Ch. 12-11, F.A.C., on
behalf of the referenced Taxpayer regarding the referenced
matter. The Department has carefully examined your request and
supporting documents and finds them to be in order. Therefore,
the Department is hereby issuing the requested TAA to the
referenced Taxpayer.

BACKGROUND

The Department of Revenue has conducted rule development
workshops regarding its proposed amendments to Rule 12A-1.035,
F.A.C., Funerals; Related Merchandise and Services. The
Department will conduct a rule hearing on March 13, 2001. The
Department further anticipates Florida Cabinet approval of the
rule amendments in April 2001 and that the rule will become

effective in May 2001.

You have requested that the Department administer the taxability
of the sale of monuments, monument services, and monument
products pursuant to the guidelines provided in the proposed
substantial rewording of Rule 12A-1.035, F.A.C., effective
immediately. You have also requested a determination regarding
the taxability of inventory that was purchased tax exempt for
the purposes of resale.

STATUTORY LAW

Section 212.05(1)(b), F.S., provides:

(1) For the exercise of such privilege, a tax is levied on
each taxable transaction or incident, which tax is due and
payable as follows:

(b) At the rate of 6 percent of the cost price of each item
or article of tangible personal property when the same is
not sold but is used, consumed, distributed, or stored for
use or consumption in this state; ....

Section 212.06(1)(a), F.S., provides:

212.06 Sales, storage, use tax; collectible from dealers;
"dealer" defined; dealers to collect from purchasers;
legislative intent as to scope of tax.-

(1)(a) The aforesaid tax at the rate of 6 percent of the
retail sales price as of the moment of sale, 6 percent of
the cost price as of the moment of purchase, or 6 percent
of the cost price as of the moment of commingling with the
general mass of property in this state, as the case may be,
shall be collectible from all dealers as herein defined on
the sale at retail, the use, the consumption, the
distribution, and the storage for use or consumption in
this state of tangible personal property or services
taxable under this chapter. The full amount of the tax on a
credit sale, installment sale, or sale made on any kind of
deferred payment plan shall be due at the moment of the

transaction in the same manner as on a cash sale.

Section 212.07(2) and (8), F.S., provide, in pertinent part:

(2) A dealer shall, as far as practicable, add the amount
of the tax imposed under this chapter to the sales price,
and the amount of the tax shall be separately stated as
Florida tax on any charge ticket, sales slip, invoice, or
other tangible evidence of sale.

(8) Any person who has purchased at retail, used, consumed,
distributed, or stored for use or consumption in this state
tangible personal property, admissions, communication or
other services taxable under this chapter, or leased
tangible personal property, or who has leased, occupied, or
used or was entitled to use any real property, space or
spaces in parking lots or garages for motor vehicles,
docking or storage space or spaces for boats in boat docks
or marinas, and cannot prove that the tax levied by this
chapter has been paid to his or her vendor, lessor, or
other person is directly liable to the state for any tax,
interest, or penalty due on any such taxable transactions.

Section 212.08(2)(a), F.S., provides:

(2) EXEMPTIONS; MEDICAL.(a) ... There shall also be exempt from the tax imposed by
this chapter artificial eyes and limbs; orthopedic shoes;
prescription eyeglasses and items incidental thereto or
which become a part thereof; dentures; hearing aides;
crutches; prosthetic and orthopedic appliances; and
funerals.... Funeral directors shall pay tax on all
tangible personal property used by them in their business.

PRESENTATION AND RESPONSES TO FACTUAL SITUATIONS

1) Rule 12A-1.026, F.A.C., currently provides the following:
"Tombstones are items of tangible personal property and the
labor used in cutting and marking them may not be excluded
in computing the tax thereon. The installation and erection
of a tombstone is taxable."

Proposed Rule 12A-1.035, F.A.C., provides that monuments,
monument services, and related monument products for the
purpose of memorializing human remains are not subject to
tax when: 1) the merchandise is sold in conjunction with
the sale of funeral or burial service; or 2) the
merchandise is installed at the consumer's designated
location.

Based on the provisions of the proposed rule, it is the
position of the [Taxpayer] that, effective immediately,
sellers of monuments, monument services, and related
monument products may discontinue collecting sales tax on
their sales of tombstones and other monuments when the
monument is installed at the place where the purchaser has
designated. Further, when the sale of a tombstone or other
monument is in conjunction with the sale of funeral
service, sellers of monuments should also discontinue
collecting sales tax, effective immediately.

The sale of a monument that is installed at the customer's
designated location is not subject to Florida sales tax and the
seller is not required to collect sales tax from the customer.
The sale of a monument that is made in conjunction with the sale
of a funeral or burial service is not subject to Florida sales
tax. However, purchases of monuments, monument products, and
other items that are delivered into Florida to be installed at
the customer's designated location or used in providing a
funeral or burial service are subject to Florida sales and use
tax at the time of purchase by the installer or the provider of
the funeral or burial service.

To the extent that any licensed seller of a tombstone or other
monument installs a memorial at the customer's designated
location, such as a tombstone or monument, the purchase by that
seller of the tombstone, monument, or other items used in
providing the installed memorial is subject to Florida sales and
use tax at the time of purchase. When the memorial is installed
by the seller and Florida sales and use tax is paid on the
tombstone, monument, and other items used in providing the
memorial to the customer, the seller is not required to collect

Florida sales tax from the customer.

The sale of a monument to any person licensed or registered in
Florida to sell monuments is a sale for resale only if that
person resells the monument to their customers with no
installation services or related funeral or burial services, and
collects Florida sales tax from the customer. An annual resale
certificate may only be extended by a licensed seller of
monuments to purchase tombstones, monuments, and other items tax
exempt when Florida sales tax is collected by that seller at the
time of resale of the tombstone, monument, or other item.

2) Based on Rule 12A-1.026, F.A.C., sellers of monuments have
been issuing a resale certificate to purchase items that
are used in providing monuments and other related products
for which the seller collects sales tax from its customer.
Sales tax is collected on the full selling price of the
monument. As a result, sellers of monuments may have an
inventory of items purchased tax exempt for the purpose of
resale.

However, based on the proposed amendments to Rule 12A1.035, F.A.C., a resale certificate may be used to purchase
merchandise tax exempt for the purpose of resale when the
applicable tax is collected from the consumer at the time
of sale. Because sales tax should no longer be collected
by sellers of monuments on their sales of products and
services to their customers, the seller may no longer issue
a resale certificate to purchase items tax exempt for the
purposes of resale.

[Taxpayer] asserts that its members should comply with
future purchases and should pay use tax on items their use
from their tax exempt inventory when the items are used to
provide a customer a monument. Members who have complied
with the law when purchasing inventory tax exempt should
not be penalized and be required to pay Florida use tax
until the item is sold under contract to their customers.

Any dealer who purchased an item tax exempt for the purposes of
resale, but who later uses the item, is required to pay Florida

use tax on the cost price of any item used. Tax is due when the
item is converted from an item for resale to an item for use by
the purchaser. Therefore, to the extent that a seller of
monuments has purchased inventory items for the purposes of
resale tax exempt, but uses the items to install a memorial at
the customer's designated location, Florida use tax is due from
that seller when the item is installed.

3) The proposed amendments to Rule 12A-1.035, F.A.C., propose
to treat the sale of monuments and monument products for
the memorialization of animal remains in the same manner as
those products memorializing human remains. [Taxpayer]
asserts that sellers of monuments, monument services, and
monument products for animal remains should no longer be
required to collect sales tax from their customers.
[Taxpayer] further asserts that the same provisions and
responsibilities regarding the purchase of items used in
providing monuments and monument services for human remains
should be applicable to items used in providing monuments
and monument services for animal remains. If items that
were purchased tax exempt are removed from inventory, use
tax should be paid when the item is delivered to the
customer purchasing a memorial for an animal.

The provisions discussed in the response to the first two issues
apply whether the memorial is used to memorialize human remains
or animal remains.

4) In today's world economy, some monument dealers import
finished and unfinished products from China and other
Southeast Asian countries. How should the sales tax on
these goods be handled? (Keep in mind, they are shipped to
a Florida port, picked up and sometimes delivered by
commercial carrier.)

In the event that an out-of-state seller does have business
locations or other sufficient physical presence in this state,
the out-of-state seller is required to be registered as a
Florida sales tax dealer and to collect sales tax on the retail
sale of goods shipped into Florida.

Out-of-state sellers, including those located outside the United
States, who do not have Florida business locations or other
physical presence sufficient to be required to be registered
with the Department as Florida sales tax dealers would not be
required to collect Florida sales tax on their sales of goods
that are shipped into Florida.

However, goods that are used, consumed, distributed, or stored
for use or consumption in Florida by monument dealers to provide
monuments, monument products, and other monument services to
their customers remain subject to Florida's sales and use tax.
(s. 212.05(1)(b), F.S.) Monument dealers who purchase goods
from unregistered out-of-state sellers are required to remit use
tax directly to the Department on the cost price of those goods
purchased. The use tax is due directly to the Department at the
time of purchase of the goods and may be remitted on the
monument dealer's sales and use tax return due to the Department
the first day of the month following the date of purchase.

5) A good portion of granite stone is mined in northern
Georgia. Many of these operations are extremely small and
may include as many as 100 different business operators.
Many, we believe, will not posses adequate business
practices to comply with Florida law in terms of remitting
sales tax on purchased goods.

What is the Department's position on this issue? Should
monument dealers remit the tax directly to Tallahassee? Is
it the Department's position that the selling company
located in Georgia should be responsible for remitting the
tax?

The bottom line is that Florida monument dealers want to
either pay it or be held harmless if the tax is not
remitted by the dealer.

When an out-of-state seller is registered with the Department as
a sales tax dealer, the dealer is required to collect Florida
sales tax on the retail sale of goods shipped to, or delivered
to, a Florida monument company. The dealer is required to
separately state "Florida sales tax" on the invoice or other

evidence of sale issued to the monument company and to remit
that tax directly to the Department. (s. 212.07(2), F.S.) When
a monument company pays the separately identified "Florida sales
tax" to the out-of-state seller, the monument company will not
be held liable for the tax. In these instances, the Department
will look to the selling dealer for any tax that is collected
but is not properly remitted.

In the event that the out-of-state seller is not registered with
the Department as a Florida dealer or the dealer does not
separately state "Florida sales tax" on the invoice or other
evidence of sale issued to the Florida monument company, the
Florida monument company will be held liable for payment of the
tax due on the purchased goods. In these instances, the
Department will look to the purchasing monument company for tax
due, plus any applicable penalty or interest due.

6) In some circumstances, a registered monument dealer will
purchase a truckload of granite from out of state and
deliver it to the dealer's place of business. This dealer
will then sell some of this shipment to other Florida
registered monument dealers. When is the sales tax
collected on these transactions and who remits the sales
tax?

A dealer who has paid tax on property acquired for use may take
a credit for the amount of tax paid on the acquired property if:
1) the dealer sells the property within 3 years from the date of
payment of the tax; and 2) the dealer did not use the property
prior to the date of sale. (s. 212.17, F.S.; Rule 12A-1.013,
F.A.C.)

When a Florida monument company buys granite for its own use
rather than for resale, the monument company is required to pay
Florida sales and use tax at the time of purchase. (s.
212.05(1)(b), F.S.) To resell a portion of the granite to
another monument company, the monument company is required to be
registered with the Department as a sales tax dealer, and to
collect and remit sales tax due on the subsequent sale of the
granite. (s. 212.06(1)(a), F.S.) When remitting the sales tax
collected on the resale of the granite, a monument company that

was registered at the time of purchase of the granite may take a
credit for the amount of tax paid on the original purchase and
remit to the Department the difference between the tax collected
at the time of the subsequent sale and the tax paid on the
original purchase of the granite. A monument company that is
not registered with the Department as a sales tax dealer at the
time of purchase of the granite may not take a credit for tax
paid on the original, but it is still required to collect and
remit tax on the subsequent sale of the granite.

7) Some out-of-state wholesalers and monument dealers come
into Florida and install monuments before, during, and
after burial services. Is Florida entitled to the sales
tax on these products and, if so, how is it collected?

Any person who installs monuments in this state is subject to
the same laws and provisions regarding the collection and
payment of Florida sales and use tax as those that pertain to
monument dealers located in Florida. The same provisions
regarding the payment of Florida sales and use tax for sales of
monuments, monument services, and related monument products
apply to both Florida monument companies and out-of-state
wholesalers and monument dealers that come into Florida to
install monuments in Florida.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only
under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory or
administrative rule changes, or judicial interpretations of the
statutes or rules upon which this advice is based, may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Ordinarily, confidential
information, such as the identity of the person to whom an

advisement is used, must be deleted before public disclosure.
In the situation in which a taxpayer association is seeking an
advisement on behalf of its members, having the identity of the
requesting association remain in the published advisement is
useful to those using the advisement for guidance. No specific
taxpayer information is included in an advisement issued to a
taxpayer association, and concerns about protecting proprietary
information are not present under such circumstances. However,
in light of statutory requirements as to confidentiality, a
taxpayer association must give its consent to the Department to
allow its name to be included in the published advisement. The
taxpayer association to which this advisement is issued has
given written consent to allow the disclosure of its identity.

Sincerely,

Janet L. Young
Tax Law Specialist

JLY/jp
Control No. 44105