Was a separately stated newspaper carrier-delivery charge taxable when subscribers could avoid it?

Plain-English summary

The newspaper's independent-carrier delivery charge was not subject to Florida sales tax under the stated billing and customer-choice arrangement. Three facts controlled:

1. At the initial subscription or renewal, the publisher told the subscriber about the carrier-delivery and mail-delivery charges.
2. The publisher told the subscriber that the carrier charge could be avoided by picking up the newspaper at a distribution center or receiving it by mail.
3. The carrier-delivery charge was separately stated on the invoice.

Florida's transportation-charge rule generally taxes delivery that is included in the sales price or cannot be avoided by the purchaser. It excludes a transportation charge when the invoice states it separately and the purchaser alone can avoid it. Here, subscribers could reject carrier delivery and avoid that charge.

The newspaper and delivery were separate tax questions

The Department treated the newspaper subscription itself as taxable when the periodical was delivered in Florida by a carrier or another nonmail method. A subscription designated for mail delivery at the beginning of the subscription period was exempt under Rule 12A-1.008, and the ruling also stated that the mail-delivery fee was not taxable.

The optional carrier charge did not become part of the taxable sales price merely because the publisher arranged delivery. The result depended on advance disclosure, a real pickup-or-mail alternative, and separate invoicing.

What this means for you

Publishers and other sellers should document the purchaser's ability to avoid delivery, disclose the available choices when the sale or renewal occurs, and state the transportation amount separately. A separately shown fee can still be taxable if the customer cannot avoid it or if the seller's actual practices differ from the facts described here.

Common questions

Q: Was the newspaper subscription itself exempt?
A: Not when it was designated for carrier or other nonmail delivery in Florida. A subscription designated for mail delivery at the beginning of the period was exempt under the rule cited in the TAA.

Q: Could the publisher simply call part of the price a delivery fee?
A: No. The charge had to be separately stated and avoidable solely through the subscriber's choice.

Q: What choices allowed the subscriber to avoid carrier delivery?
A: Pickup at a distribution center or receipt by mail.

Citations and references

• Fla. Stat. § 212.02(16) — sales price
• Fla. Stat. § 212.05 — retail sales tax
• Fla. Stat. § 212.07(2) — dealer collection and invoice treatment
• Fla. Admin. Code r. 12A-1.008 — periodicals and mailed subscriptions
• Fla. Admin. Code r. 12A-1.045 — transportation charges
• Department of Revenue v. B & L Concepts, Inc., 612 So. 2d 720 (Fla. 5th DCA 1993)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 05A-008

Original ruling text

SUMMARY
QUESTION: Are newspaper delivery charges subject to sales tax when the charge is separately stated and can be
avoided by the customer?
ANSWER - 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 maildelivery 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.

February 2, 2005

Re: Technical Assistance Advisement 05A-008
Florida Sales and Use Tax
Newspaper Delivery Charges
Sections 212.02 and 212.05, F.S. ("Florida Statutes")
Rule 12A-1.045, F.A.C. ("Florida Administrative Code")
Dear:
This response is in reply to your letter dated November 1, 2004, requesting the Department's issuance of a Technical
Assistance Advisement ("TAA") pursuant to Section 213.22, F.S., and Chapter 12-11, F.A.C., regarding the above
referenced matter. An examination of your letter established that you 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
Your letter of November 1, 2004, provides, in part, the following:
In brief, the Taxpayer, a newspaper publisher with its principal offices in Florida publishes a daily newspaper. The
Taxpayer sells newspapers through various means, including subscriptions for specific periods of time. Subscribers
have three (3) delivery options at the onset and renewal subscription periods. These options are:

(1) A subscriber may elect to have the paper delivered by a carrier.
(2) A subscriber may elect to pick up the paper at the distribution center operated by the Taxpayer.
(3) A subscriber may elect to receive the paper by mail delivery.
Many subscribers telephone in their purchase of a subscription and, if payment is made at that time via credit card,
the telemarketing representative taking or confirming the order will inform the customer that the subscription includes
transportation charges and that they can avoid these transportation charges by picking up the newspaper. However, if
the subscriber does not make a payment at the time of the order, the Taxpayer will send a "Subscriber Notice" to the
subscriber. A Subscriber Notice is a subscriber's invoice the Taxpayer sends to new and renewing subscribers.
Additionally, the Taxpayer sends it as a second notice and a final bill to those subscribers who do not pay the initial
bills. The subscriber's invoice informs the subscriber of the payment amount for the subscriber’s subscription, states
the transportation charge, and informs of the various delivery options available including the option to pick up the
newspaper.
Some subscribers (both new and renewal) will make an advance payment via credit card for a defined subscription
period. The Taxpayer sends these advance pay subscribers an "EZPay Letter." An EZPay Letter is a letter the
Taxpayer sends to both new and renewal subscribers who will make an advance payment via credit card for a defined
subscription period. The EZPay Letter informs the subscriber of the automatic payment for the subscription, states the
transportation charge, and informs of the various delivery options available, including the option to pick up the
newspaper.
The Taxpayer will send all subscribers, new and renewal, a subscription notice. 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 the newspaper. 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. The 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.
The Taxpayer will not impose a sales tax on the sale price of the newspaper when the subscriber elects to receive the
newspaper by mail at the beginning of a subscription period.
TAXPAYER'S POSITION
The Taxpayer relied on Department of Revenue v. B & L Concepts, Inc., 612 So.2d 720 (Fla. 5th DCA 1993), Florida
Hi-Lift v. Department of Revenue, 571 So.2d 1364 (Fla. 1st DCA 1990), and Case No. 02-2-DS, where the
Department of Revenue issued a Declaratory Statement on the issue of whether taxpayer is required to collect sales
tax on the charge for delivery of newspapers by independent carriers.
The Taxpayer asserts that a transportation charge and the amount of sales tax due on the price for the newspaper are

separately stated. Further, each subscriber has the sole ability to accept or reject the Taxpayer's transportation charge
by having the newspaper mailed or by picking one up at a distribution point. Those who elect to receive the
newspaper by carrier delivery must pay the transportation charge. On the other hand, those who elect to pick up their
paper at the distribution center or receive it by mail will not pay the transportation charge. As such, the Taxpayer
believes that the facts involving its request meet the "letter and spirit" of Rule 12A-1.045(4), F.A.C., and Florida case
law dealing with this issue.
APPLICABLE STATUTES AND RULES
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", in part, 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 212.02(19), F.S., defines "tangible personal property", in part, as follows:
(19) "Tangible personal property" means and includes personal property which may be seen, weighed, measured, or
touched or is in any manner perceptible to the senses, including electric power or energy, boats, motor vehicles and
mobile homes as defined in s. 320.01(1) and (2), aircraft as defined in s. 330.27, and all other types of vehicles.
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:
1. The charge is separately stated on an invoice or bill of sale; and
2. The charge can be avoided by a decision or action solely on the part of the purchaser.... (emphasis supplied)

DISCUSSION
The issue presented is whether a Taxpayer is required to collect sales tax on the charge for newspaper delivery by
independent carriers, when 1) at the time of the initial subscription or subsequent renewal, the Taxpayer informs the
subscriber of the carrier delivery charge and mail delivery charge, 2) at the time of the initial subscription or
subsequent renewal, the Taxpayer informs the subscriber that the delivery charge can be avoided by an election to
either pickup the newspapers at a distribution center or to receive the newspapers by mail, and 3) the Taxpayer
separately states the carrier delivery charge on the invoice.
Generally, under Florida Law, with respect to tangible personal property delivery charges
if service charges or fees incidental to the sale or lease are imposed at the option of the vendor or lessor, those
service charges or fees are a part of the "sales price" and are subject to the sales tax, but if such service charges or
fees are separately itemized and applied at the sole option or election of the vendee or lessee, or can be avoided by
decision or action on the part of the vendee or lessee alone, then those charges and fees are only incidental to the
sale, are not part of the "sales price" and are not subject to sales tax.
Dept. of Revenue v. B & L Concepts, Inc., 612 So.2d 720 (Fla. 5th DCA 1993) (footnote omitted).
Specifically, the following represents a list of the goods and services that the Taxpayer provides, and an explanation
as to whether each of these items is or is not taxable under Florida law:

1. The cost of the newspaper subscriptions. Pursuant Section 212.05, F.S., this item is taxable, as the Taxpayer is in
   the business of selling tangible personal property at retail.(FN 1) Moreover, Rule 12A-1.008, F.A.C. states that sale of
   periodicals, a definition that includes newspapers, is subject to a 6% sales tax.
2. The delivery charge for the newspapers.(FN 2) Pursuant to B&L Concepts, 612 So. 2d at 720, and Rule 12A1.045(4)(a), F.A.C., this item is not subject to sales tax if it is an itemized charge and the Taxpayer applies it at the
   sole option or election of the subscriber, or the subscriber can avoid the change by decision or action. According to
   the information you provided the Department, the Taxpayer will send one or more documents to each subscriber
   itemizing the delivery charge and sales tax due. Moreover, you specifically stated that the Taxpayer will send a
   "Subscriber Notice" to all new and renewing subscribers, in which the Taxpayer itemizes the delivery charges and
   provides the subscribers with an option to choose delivery type. As you stated, each subscriber has the sole ability to
   accept or reject the Taxpayer's delivery charge by having the newspaper mailed or by picking one up at a distribution
   point. In the event the subscriber chooses to pick up the newspaper or receive it in the mail, it will avoid a delivery
   charge altogether.
3. The mail delivery charge. Pursuant to Rule 12A-1.008(1)(b)1., F.A.C., the sale of subscriptions to periodicals that
   are delivered to a subscriber in this state by a carrier or by means other than by mail, such as home delivery, is
   subject to tax. Clearly, the mail delivery fee is not taxable.
   CONCLUSION

Pursuant to the facts you submit in your correspondence, the Taxpayer is not required to collect sales tax on the
charge for newspaper delivery by independent carriers given that, 1) at the time of the initial subscription or
subsequent renewal, the Taxpayer informs the subscriber of the carrier delivery charge and mail delivery charge, 2) at
the time of the initial subscription or subsequent renewal, the Taxpayer informs the subscriber that the delivery charge
can be avoided by an election to either pickup the newspapers at a distribution center or receive the newspapers by
mail, and 3) the Taxpayer separately states the amount of the carrier delivery charge on the invoice.
This response constitutes a Technical Assistance Advisement under Section 212.05, 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 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. 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,
Jessica A. Olmedillo
Attorney
Technical Assistance & Dispute Resolution
(850) 922-4835
Control No.: 62223

FOOTNOTES:
FN 1. See Section 212.02(19), F.S.
FN 2. Rule 12A-1.045(1), F.A.C., defines "transportation charges" to include delivery charges.