Which county's discretionary sales surtax applied when a Florida document-reproduction business delivered taxable products itself or by common carrier?

Plain-English summary

Florida concluded that the discretionary sales surtax rate was determined by the Florida county where the reproduced documents were delivered. The same destination rule applied whether the taxpayer delivered the property in its own vehicles or used a common carrier.

The taxpayer produced taxable reproduced documents at fixed Florida facilities for business and government customers. Its contracts said title passed when production finished at its premises, and customers could pick up their orders, arrange common-carrier delivery, or buy a separately stated delivery service from the taxpayer.

Delivery method did not change the surtax county

Rule 12A-15.003(4)(a) required the dealer to collect surtax at the rate imposed by the county where taxable tangible personal property was delivered. The Department therefore rejected the taxpayer's view that its production facility's county controlled merely because the customer chose the shipping method or the contract said title passed there.

For Florida deliveries:

• Common-carrier delivery used the surtax rate of the delivery county.
• Delivery in the taxpayer's vehicles also used the surtax rate of the delivery county.
• Multiple destinations could require applying the rate for each actual delivery county.

The ruling separately noted that a delivery charge was not subject to sales tax or surtax when it was separately stated and the customer could avoid it by picking up the merchandise.

Continuous out-of-state delivery was not a Florida sale

No Florida sales tax or surtax was due when the seller committed the property to export at the time of sale and the export process remained continuous and unbroken through delivery outside Florida. The ruling cautioned that the seller still had to review the destination state's tax law and noted that physical presence could create a collection obligation there.

What this means for you

Printing and document-reproduction businesses

Track the actual delivery address for each taxable order. A production location or contract provision about title does not replace delivery evidence for Florida surtax sourcing under this ruling.

Billing and logistics teams

Coordinate invoices and shipment records, especially for orders split among multiple Florida counties. Keep separately stated optional delivery charges distinct from the taxable product price.

Accountants and tax professionals

Verify the county rate at the destination and retain evidence for claimed out-of-state export treatment. Analyze tax obligations in the destination state separately.

Common questions

Q: Did the production facility's county set the surtax rate?
A: No. The Florida delivery county controlled.

Q: Did using a common carrier change the answer?
A: No. Common-carrier and taxpayer delivery were treated the same for sourcing.

Q: Was an optional delivery charge taxable?
A: The ruling said no when the charge was separately stated and the customer could avoid it through pickup.

Q: Did Florida tax products delivered outside the state?
A: Not when the property was committed to a continuous, unbroken export process at the time of sale.

Citations and references

• Fla. Stat. § 212.054 — discretionary sales surtax
• Fla. Admin. Code r. 12A-15.003(4)(a) — delivery-county sourcing
• Fla. Admin. Code r. 12A-1.0015(2)(b) — continuous exportation
• Fla. Admin. Code r. 12A-1.045 — separately stated, avoidable delivery charges
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 04A-003

Original ruling text

SUMMARY

QUESTION: The Taxpayer is a Florida business providing
document reproduction services, which are subject to
Florida sales tax, primarily to business and governmental
agencies located in the State of Florida. The Taxpayer
believes that title to the merchandise passes at the
production facility because the customer has the option to
take possession at the facility or arrange for delivery
through an independent common carrier. The Taxpayer's
customers may be in counties other than that where the
Taxpayer operates its facility. Based on the foregoing,
the Taxpayer is of the opinion that the surtax rate to be
used is that which is in effect in the country where the
Taxpayer's production facility is located.

ANSWER - Based on Facts Below: Rule 12A-15.003(4)(a),
F.A.C., provides that "[a] dealer who makes sales of
tangible personal property is required to collect surtax
when the taxable item of tangible personal property is
delivered within a surtax county. The dealer is required to
collect surtax at the rate imposed by the county where the
delivery occurs, whether the delivery is made directly by
the dealer or by a manufacturer or wholesaler who delivers
the property to the purchaser on behalf of the dealer....
(emphasis added).

Therefore, the option of delivery methods is not a factor
in calculating the surtax. It also makes no difference
that delivery is made by the Taxpayer's delivery service or
by common carrier. It is the point of delivery that is the
determining factor.

Jan 16, 2004

Re: Technical Assistance Advisement 04A-003
XXX ("Taxpayer")
Sales and Use Tax - Surtax

Statute: Section 212.054, F.S.
Rules: 12A-15.003, 12A-1.0015, F.A.C.

Dear :

This response is in reply to your letter dated October 22, 2003,
requesting the Department's issuance of a Technical Assistance
Advisement ("TAA") pursuant to s. 213.22, F.S., and Chapter 1211, F.A.C., regarding the referenced matter and parties. An
examination of your petition has established that you have
complied with the statutory and regulatory requirements for
issuance of a TAA. Therefore, the Department is hereby granting
your request for issuance of a TAA.

INFORMATION SUPPLIED

Your letter states in pertinent part:

The Taxpayer is a Florida business providing document
reproduction services, which are subject to Florida sales
tax, primarily to business and governmental agencies
located in the State of Florida.

The Taxpayer operates its business out of a fixed facility
located in [Florida]. The Taxpayer's affiliates operate
their business out of fixed facilities in other counties in
the State of Florida as well as two facilities outside the
State of Florida.

The Taxpayer believes that title to the merchandise passes
at the production facility because the customer has the
option to take possession at the facility or arrange for
delivery through an independent common carrier. The
Taxpayer is not responsible for the merchandise shipped[,]
as the contract with the customer states that title passes
at the Taxpayer's premises. The Taxpayer's customers may
be in counties other than that where the Taxpayer operates
its facility. In addition, a customer may arrange for
shipment to be made to counties, and even to multiple
counties, other than where the customer's production
facility is located.

For customers with locations within approximately 50 miles
of the production facility, the Taxpayer will offer to sell
shipping services via the Taxpayer's own commercial
vehicles. The customer continues to have the option of
taking possession at the production facility, using an
independent common carrier or purchasing this separate
shipping service from the Taxpayer. When the Taxpayer is
engaged it will separately state the handling and delivery
charges. Again, the Taxpayer is not responsible for the
merchandise shipped[,] as the contract with the customer
states that title passes at the time when production is
complete and the merchandise is available for possession at
the Taxpayer's premise.

In addition to sales to Florida customers, the Taxpayer
also produces merchandise at its Florida facilities for
shipping to customer locations out of the State of Florida.

QUESTIONS PRESENTED

(1) What county surtax rate should be applied when a
common carrier is used?
Short Answer: The surtax rate of the county where the
tangible personal property is delivered.

(2) What county surtax rate should be applied when
Taxpayer's delivery service is used?
Short Answer: The surtax rate of the county where the
tangible personal property is delivered.

(3) What sales tax rate should be applied when shipping is
made to locations outside the State of Florida.
Short Answer: Since delivery will be outside the
State, no Florida sales tax or surtax is due.

TAXPAYERS POSITION

The Taxpayer asserts that the requested ruling is an
accurate statement of the law. The grounds for this
asserted determination and relevant authorities in support

of that determination are set forth in the following
discussion.

(1) What county surtax rate should be applied when a common
carrier is used?

The fact the customer has the option of taking the product
from the Taxpayer's premises or directing the method of
shipping establishes that the customer took possession at
the time of production.

Based on the foregoing, the Taxpayer is of the opinion that
the surtax rate to be used is that which is in effect in
the country where the Taxpayer's production facility is
located.

(2) What county surtax rate should be applied when
Taxpayer's delivery service is used?

Section 212.054(3)(a)1., F.S., states that if there is no
reasonable evidence of delivery of service, the sale of a
service is deemed to occur in the county in which the
purchaser accepts the bill of sale.

The fact the customer has the option of taking the product
from the Taxpayer's premises or directing the method of
shipping through an independent shipping company or through
the Taxpayer's own shipping service establishes that the
customer took possession at the time of production.

Based on the foregoing, the Taxpayer is of the opinion that
the surtax rate to be used is that which is in effect in
the county where the Taxpayer's production facility is
located.

(3) What sales tax rate should be applied when shipping is
made to locations outside the State of Florida?

Section 212.054(3)(a)1., F.S., states that if there is no
reasonable evidence of delivery of service, the sale of a
service is deemed to occur in the county in which the

purchaser accepts the bill of sale.

The fact the customer has the option of taking the product
from the Taxpayer's premises or directing the method of
shipping through an independent shipping company
establishes that the customer took possession at the time
of production.

Based on the foregoing, the Taxpayer is of the opinion that
the surtax rate to be used is that which is in effect in
the county where the Taxpayer's production facility is
located.

APPLICABLE LAW AND DISCUSSION

Florida counties are authorized to levy a discretionary sales
surtax on most transactions in the county that are subject to
sales and use tax. The tax is computed using the tax rate in
the county in which the consumer takes delivery of the tangible
personal property.

Rule 12A-15.003(4)(a), F.A.C., provides that "[a] dealer who
makes sales of tangible personal property is required to collect
surtax when the taxable item of tangible personal property is
delivered within a surtax county. The dealer is required to
collect surtax at the rate imposed by the county where the
delivery occurs, whether the delivery is made directly by the
dealer or by a manufacturer or wholesaler who delivers the
property to the purchaser on behalf of the dealer.... (emphasis
added).

Therefore, the option of delivery methods is not a factor in
calculating the surtax. It also makes no difference that
delivery is made by the Taxpayer's delivery service or by common
carrier. It is the point of delivery that is the determining
factor. Please note that if the charges are separately stated,
and the customer has the option of picking up the merchandise,
sales or surtax does not apply to the delivery charge. See Rule
12A-1.045, F.A.C.

The Florida Administrative Code further provides that sales and

use tax is not assessed on tangible personal property when the
dealer "commits the property to the exportation process at the
time of sale, and the exportation process remains continuous and
unbroken." See Rule 12A-1.0015(2)(b), F.A.C. A taxpayer must
demonstrate a specific commitment of the property to the
exportation process in order to avoid the tax. Therefore, when
the Taxpayer makes sales of tangible personal property to out of
state customers, no Florida sales or surtax will be due.
However, please refer to the laws of each particular state to
determine any state sales tax liability. Maintaining a physical
presence in a state will subject the Taxpayer to collecting and
remitting that state's sales tax.

CLOSING STATEMENT

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 and
administrative rule changes or those 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., which 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 that 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,

Michael T. Cavanaugh
Tax Law Specialist
Technical Assistance and Dispute Resolution
850-922-9411
Control # 57378