Did one purchase order for department-store fixtures receive one $5,000 surtax limitation despite multiple invoices or shipments?

Plain-English summary

Each qualifying purchase order was one sale for Florida's $5,000 discretionary sales surtax limitation. The ruling covered both fixtures for one store department and fixtures for an entire store. Each order specified a definite quantity and required all goods to be delivered by a date certain.

Internal fulfillment did not split the sale. Multiple invoices, shipments, or warehouses used to complete the same purchase order still produced one $5,000 limitation.

What this means for you

The purchase order—not the number of invoices or deliveries—controlled these bulk-sale scenarios. The order must define the goods and delivery obligation as described in the ruling.

Common questions

Q: Did two warehouse shipments create two surtax limits? No.

Q: Did multiple invoices create separate sales? No, when they fulfilled the same qualifying purchase order.

Q: Did the result cover both a department buildout and a whole-store fixture order? Yes.

Citations and references

• Fla. Stat. § 212.054 — discretionary sales surtax
• Fla. Admin. Code r. 12A-15.004 — single sales and the $5,000 limitation
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 02A-047

Original ruling text

SUMMARY

QUESTION: Are purchases of furniture and fixtures for a
department store made pursuant to a single purchase order
subject to a single $5,000 discretionary sales surtax
limitation?

ANSWER - Based on Facts Below: Yes. Furniture and fixtures
for a department store purchased pursuant to a single
purchase order qualify for a single $5,000 discretionary
sales surtax limitation.

Nov 07, 2002

Re: Technical Assistance Advisement 02A-047
Sales and Use Tax - Discretionary Sales Surtax $5,000
Limitation
Section: 212.054, F.S.
Rule: 12A-15.004, F.A.C.
Petitioner: XXX (herein "Taxpayer")
FEI: XX

Dear :

This letter is a response to your petition dated September 19,
2002, for the Department's issuance of a Technical Assistance
Advisement ("TAA") concerning the above referenced party and
matter. Your petition has been carefully examined and the
Department finds it to be in compliance with the requisite
criteria set forth in Chapter 12-11, F.A.C. This response to
your request constitutes a TAA and is issued to you under the
authority of s. 213.22, F.S.

FACTS

The petition sets forth the following facts:

[Taxpayer] is a manufacturer of custom wooden furniture and

fixtures. Its main customer base consists of retail
department stores, specialty clothing stores, etc. More
specifically, [Taxpayer] is in the business of
manufacturing and supplying the wall fixtures, floor
fixtures, and the miscellaneous fixtures utilized to
display and store a retail store's items for sale.
Taxpayer may receive purchase orders on a department-bydepartment basis within a particular store or be contracted
to provide all of a particular store's fixtures. Lastly,
in rare cases, a customer may request a single wall unit or
a single floor fixture, etc.

Taxpayer may produce one invoice or multiple invoices
relating to a single sales order due to the fact that
Taxpayer maintains two warehouses [in two different
counties]. In some cases, the items necessary for one
order may be shipped from both warehouses. As a result,
for internal administrative purposes, two invoices may
exist related to a single purchase order. Despite this,
the transaction is for all intents and purposes, a single
sale. The taxpayer's goods are shipped via common carrier
from Taxpayer's warehouse. As a result, the location of
the customer (destination) determines which local surtax
rate to apply to the sales price.

It appears that a portion of the taxpayer's regular
transactions may be covered under the $5,000 surtax
limitation as a bulk/working unit sale....

The following are examples of the typical transactions that
Taxpayer is requesting advice on:

Scenario #1

Taxpayer may be contracted to provide the fixtures for the
children's department of a retail store. All fixtures
required for display and arrangement of the clothing in
this particular department will be provided under this
contract. This includes end panels, wall units, dividers,
etc., as well as the floor fixtures. There is a single
purchase order reflecting the sale.... In this case, the

items are all "put together" to produce the children's
department area within a store.

Scenario #2

Taxpayer may also receive a purchase order to provide an
entire store's wall units, floor fixtures, and
miscellaneous fixtures. The purchase order will reflect
multiple amounts of the same item, which are necessary to
provide the type of store arrangement that is desired.
Within this order, there are components that make up a
particular working unit, much like Scenario #1 above;
however, the purchase order may not reflect the items
purchases on a "department or unit basis"....

In all scenarios, Taxpayer is collecting sales tax from
each customer, unless the buyer presents a valid exemption
certificate.

REQUESTED ADVISEMENT

The petition sets forth the following questions:

1. Does the transaction described in Scenario #1 qualify
   for the $5,000 limitation on the local surtax component of
   the Florida sales tax, either as a bulk sale or as
   components of a working unit provided under Rule 12A-15.004
   of the Florida Administrative Code?

2. Does the transaction described in Scenario #2 qualify
   for the $5,000 limitation on the local surtax component of
   the Florida sales tax, either as a bulk sale or as
   components of a working unit provided under Rule 12A-15.004
   of the Florida Administrative Code?

LAW AND DISCUSSION

Section 212.054(2), Florida Statutes, allows counties to impose
discretionary sales surtax on transactions occurring in that
county; however, a limitation is imposed by the subsection,
which states in pertinent part as follows:

(b) However:

1. The sales amount above $5,000 on any item of tangible
   personal property shall not be subject to the surtax. . . .
   For purposes of administering the $5,000 limitation on an
   item of tangible personal property, if two or more taxable
   items of tangible personal property are sold to the same
   purchaser at the same time and, under generally accepted
   business practice or industry standards or usage, are
   normally sold in bulk or are items that, when assembled,
   comprise a working unit or part of a working unit, such
   items must be considered a single item for purposes of the
   $5,000 limitation when supported by a charge ticket, sales
   slip, invoice, or other tangible evidence of a single sale
   or rental.

Rule 12A-15.004(2)(d), Florida Administrative Code, provides:

Where a purchase order is issued by the purchaser to the
selling dealer, or an agreement is made between the selling
dealer and the purchaser which is reduced to writing, that
provides for the purchase of a specific quantity of
tangible personal property which, according to the terms
and conditions set out in the purchase order or agreement,
is to be delivered to the purchaser within a definite
specified time, such transaction constitutes one sale for
purposes of the $5000 limitation. Delivery of the tangible
personal property so ordered within the time specified in
the purchase order or agreement will constitute one sale
notwithstanding that due to the nature of the property it
must be delivered in installments or that multiple
deliveries may be necessary to consummate delivery to the
purchaser. In the absence of a written purchase order or
written agreement reflecting the above conditions, each
individual delivery of tangible personal property is to be
considered one sale. Each individual delivery of tangible
personal property on purchase orders for indefinite
quantities or open-end purchase orders is considered to be
one sale. (Emphasis Supplied)

In both scenarios, Taxpayer's customer has issued a single
purchase order (or entered into a single written contract) to
purchase multiple quantities of goods from Taxpayer. As long as
the single purchase order identifies a specific quantity of
goods, and it requires delivery of all of the goods to be made
by a date certain, then each purchase order qualifies as a
single sale for purposes of the $5,000 limitation. This is true
regardless how many invoices Taxpayer issues for each purchase
order, and regardless how many shipments are required to fulfill
the purchase order.

By its terms, Rule 12A-15.004(2)(d), Florida Administrative
Code, specifically categorizes these purchases as bulk sales,
regardless of the fact that purchases pursuant to a single
purchase order may also constitute a working unit.

CONCLUSION

Both scenarios represent a single sale for purposes of the
$5,000 discretionary sales surtax limitation.

This response constitutes a Technical Assistance Advisement
under Section 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 Section 213.22, F.S. Our
response is predicated upon 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 from that which is 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. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses
and any other details which might lead to identification of the

taxpayer. Your response should be received by the Department
within 15 days of the date of this letter.

Sincerely,

Sara D. Faulkenberry
Tax Law Specialist
Technical Assistance and Dispute Resolution
850/414-9838

Control No. 51957