Could a newspaper publisher exclude an independent-carrier delivery charge from sales tax when subscribers could choose pickup or mail instead?

Plain-English summary

Florida allowed the publisher to exclude its independent-carrier delivery charge from sales tax when subscribers could avoid that charge and it was separately stated. The newspaper subscription itself remained taxable when delivered in Florida by a carrier, but the optional transportation component did not have to be included in taxable sales price.

The publisher offered three choices at the beginning or renewal of a subscription: carrier delivery, pickup at a distribution center, or delivery by mail. A subscriber choosing pickup or mail could avoid the carrier delivery charge.

Three conditions controlled the result

Florida required the publisher to satisfy all three conditions:

1. At the initial subscription or renewal, disclose the carrier delivery charge and mail delivery charge.
2. At that same point, tell the subscriber that the carrier charge can be avoided by choosing distribution-center pickup or mail.
3. Separately state the carrier delivery charge on the invoice.

When those conditions were met, the delivery charge was not taxable under Rule 12A-1.045.

Separate statement alone was not enough

The transportation rule taxed delivery when the seller agreed to deliver and the customer could not avoid the charge, even if the charge appeared separately on the invoice. Nontaxable treatment required both separate statement and a decision or action solely by the purchaser that avoided the charge.

Subscription method still affected the newspaper sale

The ruling quoted Rule 12A-1.008: subscriptions delivered in Florida by a carrier or other nonmail method were taxable, while subscriptions designated for mail delivery at the beginning of the subscription period were exempt. The advisement focused specifically on whether the independent-carrier transportation charge joined the taxable base.

What this means for you

Newspaper and periodical publishers

Build delivery choice into the initial subscription and renewal process, clearly disclose each option, and separately state the avoidable carrier charge. A nominal “delivery” line does not qualify if customers cannot actually avoid it.

Subscription businesses

The ruling illustrates Florida's broader transportation-charge test: customer choice and invoice presentation both matter. Document when the choice is offered and how the customer can act to avoid the fee.

Accountants and tax professionals

Separate the tax treatment of the product or subscription from the delivery component. An optional transportation charge can be excluded even when the underlying sale remains taxable.

Common questions

Q: Was home-delivered newspaper subscription revenue taxable?
A: The ruling quoted Florida's rule that subscriptions delivered in Florida by carrier or another nonmail method were taxable.

Q: Was the carrier delivery fee taxable?
A: No, when all three disclosure, choice, and separate-statement conditions were met.

Q: Could pickup avoid the delivery charge?
A: Yes. Subscribers could pick up newspapers at a distribution center.

Q: Was mail treated the same as carrier delivery?
A: No. The ruling quoted an exemption for subscriptions designated for delivery by mail at the beginning of the subscription period.

Citations and references

• Fla. Stat. § 212.02(16) — taxable sales price includes services that are part of the sale
• Fla. Stat. § 212.05 — sales tax on retail sales of tangible personal property
• Fla. Stat. § 212.07(2) — dealer collection duties and separate statement of tax
• Fla. Stat. § 212.08(7)(w) — mailed newspaper subscriptions referenced by the taxpayer
• Fla. Admin. Code r. 12A-1.008(1) — tax treatment of periodical subscriptions by delivery method
• Fla. Admin. Code r. 12A-1.045 — transportation charges, separate statement, and customer choice

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 04A-042

Original ruling text

SUMMARY
QUESTION 1: Are newspaper delivery charges subject to sales tax when the charge is separately stated and can be
avoided by the customer?
ANSWER 1 - Based on Facts Below: No. The Company is not required to collect sales tax on the charge for
newspaper delivery by independent carriers if: 1) at the time of the initial subscription or subsequent renewal, the
subscriber is informed of the carrier delivery charge and mail delivery charge; 2) at the time of the initial subscription
or subsequent renewal, the subscriber is informed that the delivery charge can be avoided by an election to either pick
up the newspapers at a distribution center or to receive the newspapers by mail; and 3) the carrier delivery charge is
separately stated on the invoice.

July 23, 2004

Subject: Technical Assistance Advisement 04A-042
Newspaper Delivery Charges
Sales and Use Tax
Sections 212.02 and 212.05, F.S.
Rule 12A-1.045, F.A.C.
Dear:
This response is in reply to your petition dated June 24, 2004, requesting the Department's issuance of a Technical
Assistance Advisement pursuant to s. 213.22, F.S., and Chapter 12-11, F.A.C., regarding the above referenced
matter and party. 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.
ISSUE
Whether newspaper delivery charges are subject to sales tax when the charge is separately stated and can be
avoided by the customer.
FACTS
You have provided a letter and four documents (the "Documents") proposed to be used by the Taxpayer. Your letter
provides in part:
... The Taxpayer, a newspaper publisher, publishes a dailynewspaper commonly known as [Newspaper].The
Taxpayer has its principal offices in ... Florida. The Taxpayer sellsnewspapers through various means, including

subscriptions whereby a subscriber agrees to receive and pay for the newspaper for a specified period of time,
typically 4, 8, 13, 26 or 52 weeks. Delivery of the newspaper is made to the subscriber's residence or business by
independent contractors who have written agreements with the Taxpayer to deliver newspapers within a specified
geographic territory. The Taxpayer pays the independent contractor for this service. Subscribers may, upon request,
have the newspaper mailed to them rather than have the paperdelivered by a carrier.
Historically, subscribers who had their paper delivered by the independent carrier were charged appropriate Florida
sales tax (including local option taxes where applicable) based upon the total amount charged, which effectively
included the delivery charge incurred by the Taxpayer and which was not separately stated on the subscriber'sinvoice.

On May 10, 2004, the Taxpayer changed its delivery and billing practices. Subscribers will now pay a separateprice
for the newspaper and a charge for delivery. Pursuant to the new procedure, subscribers will have three delivery
options at the commencement or renewal of a subscription period. These options are:
(1)A subscriber may elect to have the paper delivered by carrier.
(2) A subscriber may elect to pick up the paper at a distribution center operated by the Taxpayer.
(3) A subscriber may elect to receive the paper by mail delivery.
... Subscribers are free to choose their delivery options at the commencement of the initial subscription period or at
the commencement of any renewal period....
In the case of new subscriptions or renewals, all subscribers will be sent a subscription notice confirming the
subscription or renewal. The subscription notice sets forth the amount due for a subscription and separately states the
charge for delivery (referred to as transportation costs in the notice) and the amount of sales tax that is imposed on
the price for thenewspaper. Although the subscription price may vary for customers depending on service type and
delivery area, the transportation cost remains the same, and is reflected on the document. The specific amount for
the newspaper cost is not separately stated. Under the new procedure, appropriate sales tax (including local option
taxes where applicable) will be charged on the implicit sales price of the newspaper but not the delivery charge,
because the subscriber has the option to receive the paper by carrier delivery or to pick up the newspaper at a
distribution center and avoid the delivery charge. Consistent with the Taxpayer's existing practice, sales tax will not be
imposedon the sale price of a newspaper when the subscriber electsto receive the newspaper by mail at the
beginning of asubscription period. See, Section 212.08(7)(w), Fla. Stat.
TAXPAYER POSITION
In your letter, dated June 24, 2004, you further state:
... Finally, in Case No. 02-2-DS, the Department recently issued a Declaratory Statement to the Miami Herald
Publishing Company, and concluded that the Miami Herald was not required to collect sales tax for newspaper

delivery.... The Documents provided by the Taxpayer are consistent with the foundation on which this Declaratory
Statement stands, and the Department should issue an advisement to the Taxpayer that the procedures it employs,
as reflected in the Documents, [result] in no sales tax being imposed on the transportation costs.
APPLICABLE AUTHORITY
Section 212.05, F.S., states in pertinent part as follows:
It is hereby declared to be the legislative intent that every person is exercising a taxable privilege who engages in the
business of selling tangible personal property at retail in this state, including the business of making mail order sales,
or who rents or furnishes any of the things or services taxable under this chapter....
For the exercise of such privilege, a tax is levied on each taxable transaction or incident, which tax is due and payable
as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of tangible personal property when sold at
retail in this state, computed on each taxable sale for the purpose of remitting the amount of tax due the state, and
including each and every retail sale....
Section 212.02(16), F.S., defines "sales price" as follows:
(16) "Sales price" means the total amount paid for tangible personal property, including any services that are a part of
the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to
the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of
materials used, labor or service cost, interest charged, losses, or any other expense whatsoever....
Section 212.07(2), F.S., states:
(2) A dealer shall, as far as practicable, add the amount of the tax imposed under this chapter to the sale 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. Such tax shall constitute a part of such price, charge, or proof of sale which shall be a debt
from the purchaser or consumer to the dealer, until paid, and shall be recoverable at law in the same manner as other
debts. Where it is impracticable, due to the nature of the business practices within an industry, to separately state
Florida tax on any charge ticket, sales slip, invoice, or other tangible evidence of sale, the department may establish
an effective tax rate for such industry. The department may also amend this effective tax rate as the industry's pricing
or practices change. Except as otherwise specifically provided, any dealer who neglects, fails, or refuses to collect the
tax herein provided upon any, every, and all retail sales made by the dealer or the dealer's agents or employees of
tangible personal property or services which are subject to the tax imposed by this chapter shall be liable for and pay
the tax himself or herself.
Rule 12A-1.008, F.A.C., states in pertinent part as follows:
(1)(a) For purposes of this rule, the term "periodicals" includes newspapers, community newspapers, shoppers,

newsletters, magazines, and other periodicals, but excludes books, whether published in serial form or otherwise.
(b)1. The sale of copies of periodicals is subject to tax. The sale of subscriptions to periodicals that are delivered to a
subscriber in this state by a carrier or means other than by mail, such as home delivery, is subject to tax. When the
designation of delivery is in this state by means other than by mail at the beginning of the subscription period, and it is
later changed to outside this state or to be delivered by mail, the sale of the subscription is subject to tax.

2. The sale of subscriptions to periodicals that are delivered to the subscriber by mail are exempt whether delivered to
   a customer in this state or outside this state. When the destination of delivery at the beginning of the subscription
   period is by mail, but it is changed during the subscription period to be delivered in this state by a carrier or by means
   other than by mail, the sale of the subscription is exempt.... (Emphasis supplied)
   Rule 12A-1.045, F.A.C., states in pertinent part as follows:
   (1) "Transportation charges" include carrying, delivery, freight, handling, pick up, shipping, and other similar charges
   or fees.
   (2) Transportation charges which are not separately stated on an invoice or bill of sale, but are included in the sales
   price of taxable tangible personal property, are subject to tax.
   (3)(a) Where the seller agrees to deliver tangible personal property to some designated place and the purchaser
   cannot elect to avoid the charge for transportation services, the charge for the transportation service is subject to tax,
   even if separately stated on an invoice or bill of sale....
   (4)(a) The charge for transportation services is not subject to tax when both of the following conditions have been met:
3. The charge is separately stated on an invoice or bill of sale; and
4. The charge can be avoided by a decision or action solely on the part of the purchaser.... (emphasis supplied)
   DETERMINATION
   The Taxpayer is not required to collect sales tax on the charge for newspaper delivery by independent carriers if: 1) at
   the time of the initial subscription or subsequent renewal, the subscriber is informed of the carrier delivery charge and
   mail delivery charge; 2) at the time of the initial subscription or subsequent renewal, the subscriber is informed that the
   delivery charge can be avoided by an election to either pick up the newspapers at a distribution center or to receive
   the newspapers by mail; and 3) the carrier delivery charge is separately stated on the invoice.
   The subscription notice sets forth the amount due for a subscription and separately states the charge for delivery
   (referred to as transportation costs in the subscription notice) and theamount of sales tax. Pursuant to Rule 12A1.045(4)(a) 2., F.A.C., the charge can be avoided by a decision or action solely on the part of the purchaser. In the
   present case, providing the above three criteria are met, no tax is due on the newspaper delivery charge.

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
advise 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. 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,
Valerie L. Koenitzer, CPA
Senior Tax Specialist
Technical Assistance & Dispute Resolution
vk/
Control No. 60668