Were flat-fee in-vehicle safety, security, roadside, navigation, and concierge packages subject to Florida sales tax, and how was a separate prepaid calling plan taxed?

Plain-English summary

The Florida Department of Revenue ruled that the full charges for the three motorist-service packages were subject to sales tax. Several included features were taxable protection services, and Florida's bundling rule taxed the entire single charge when taxable and nontaxable services were sold together.

The company sold flat monthly or annual subscriptions delivered through specialized hardware and software installed in customers' vehicles. Motorists connected to an out-of-state call center using a preprogrammed number, a toll-free line, or the internet. The company bought wireless and landline communications services used to deliver the features.

Monitored safety and security features were taxable protection services

Package A included airbag-deployment notification, stolen-vehicle tracking, emergency services, roadside assistance, remote door unlock, remote horn and lights, remote diagnostics, accident assistance, and online concierge access.

The Department specifically treated airbag notification, stolen-vehicle tracking, emergency services, remote diagnostics, and accident assistance as monitoring of alarm or security devices. Those were "detective, burglar protection, and other protection services" under section 212.05(1)(i)1.a. and Rule 12A-1.0092.

Packages B and C added driving directions, information and convenience help, ride assistance, and expanded concierge services, but they still included all Package A features.

One taxable service made each single-price bundle taxable

The company charged one flat price for each package without separate usage charges. Section 212.05(1)(i)4. provided that when a single charge covered a taxable service and nontaxable items or services, the entire charge was taxable.

Because every package contained the taxable monitoring features, the full charge for Packages A, B, and C was subject to sales tax and applicable local discretionary surtax. The company had to register as a Florida sales-and-use-tax dealer.

The separate Calling Service was a prepaid calling arrangement

Customers could separately prepay for a set number of in-vehicle wireless calling minutes. The available minutes declined with use and could also access location-based weather, traffic, news, sports, financial, entertainment, e-mail, and related customized information.

The Department treated that separately stated plan as a prepaid calling arrangement. Its sale or recharge was taxable under Chapter 212 as tangible personal property, including applicable local surtax, even if no physical item was delivered. The sourcing point was the customer's address or the location associated with the mobile telephone number.

The communications services incorporated into the prepaid plan could be purchased for resale after the company registered as a communications-services dealer and supplied the appropriate resale certificate to its provider.

What this means for you

Telematics and connected-vehicle providers

Classify each monitored feature. Crash alerts, vehicle tracking, emergency response, diagnostics, and accident assistance can be treated as taxable protection services even when communications technology merely delivers them.

Subscription businesses selling bundles

A single taxable component can make the entire flat-fee package taxable under the rule applied here. Separately stated products may receive their own tax analysis.

Prepaid calling sellers

Minutes sold in predetermined declining units were treated as a Chapter 212 prepaid calling arrangement rather than a Chapter 202 retail communications-service charge to the customer.

Common questions

Q: Were all package features independently taxable?
A: No. But several monitoring features were taxable protection services, which made the entire single-price bundle taxable.

Q: Which Package A features did the Department specifically identify as taxable?
A: Airbag-deployment notification, stolen-vehicle tracking, emergency services, remote diagnostics, and accident assistance.

Q: Were Packages B and C also taxable?
A: Yes. They included every Package A feature and were sold for one flat price.

Q: How was Calling Service treated?
A: As a separately stated prepaid calling arrangement taxable under Chapter 212 plus applicable local surtax.

Q: Did the company need Florida registrations?
A: Yes. The ruling required sales-tax dealer registration for the taxable packages and Calling Service, plus communications-services dealer registration to buy Calling Service inputs for resale.

Citations and references

• Fla. Stat. § 212.05(1)(i)1.a. and 4. — taxable protection services and single-charge bundles
• Fla. Stat. § 212.05(1)(e)1. — prepaid calling arrangements
• Fla. Stat. § 202.11(3), (10), and (14)(b)4. — communications services and prepaid-calling definitions
• Fla. Stat. §§ 202.12(1) and 202.16(2) — communications tax on provider purchases and resale treatment
• Fla. Admin. Code r. 12A-1.0092 — monitoring and protection services
• Fla. Admin. Code rr. 12A-1.056 and 12A-1.060 — sales-tax filing and registration
• Fla. Admin. Code rr. 12A-19.010 and 12A-19.060 — communications-services registration and resale certificate
• AT&T v. Department of Revenue, 764 So. 2d 665 (Fla. 1st DCA 2000) — Florida had not adopted the "true object" test

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 05A-020

Original ruling text

SUMMARY

QUESTION: Whether any of various services offered by the Taxpayer are subject to tax pursuant to either Chapter
202, F.S. (Communications Services Tax), or Chapter 212, F.S. (Sales and Use Tax).
ANSWER - Based on Facts Below: (1) Based on the description of the services available in the various described
packages of services, these bundled services are not subject to communications services tax. With regard to these
services, the Taxpayer is the consumer of the communications services it uses to provide its services, and not the
provider of communications services. As such, the Taxpayer should pay Florida communications services tax upon
any purchase of communications services taxable pursuant to Section 202.12(1), F.S.
(2) Several services provided by the Taxpayer in all of the offered packages of services constitute protection services,
and are subject to tax pursuant to Section 212.05(1)(i)1.a., F.S. Section 212.05(1)(i)4., F.S., indicates that when a
single charge is made for a taxable service and for services or items not subject to tax, the entire charge is subject to
tax. Because the Taxpayer makes a single charge for the various services contained in the packages sold to
customers (not including Calling Service, which is separately stated), the entire charge made to customers by the
Taxpayer is subject to sales tax, plus any applicable local discretionary sales surtax. Because the Taxpayer charges
customers for services taxable under Chapter 212, F.S., it must be registered as a sales and use tax dealer engaging
in business in Florida.
(3) Calling Service. Calling Service provides customers with wireless communications services whereby the customer
pre-purchases a specific number of usage minutes for a separately stated charge. These services provided by the
Taxpayer under Calling Service fall within the definition of "prepaid calling arrangement" found in Sections 202.11(10)
and 212.05(1)(e)1.a.(I), F.S. The sale or recharge of a prepaid calling arrangement is excluded from the tax imposed
by Chapter 202, F.S., and is taxable under Section 212.05(1)(e)1., F.S. (plus any applicable local discretionary
surtax). Accordingly, with regard to the charge made to customers for Calling Service, the Taxpayer must be
registered as a sales and use tax dealer engaging in business in Florida. In addition, communications services used
as a component part or integrated into a prepaid calling arrangement may be purchased for resale. The Taxpayer
would be considered a reseller of the communications services that are used as a component part or integrated into
the Calling Service plans it sells to customers. In order to properly make such a purchase for resale, the Taxpayer
must register with the Department as a dealer of communications services.

April 15, 2005

Re: Technical Assistance Advisement 05A-020
Sales and Use Tax
Technical Assistance Advisement 05A19-002
Communications Services Tax

Various Services Available to Motorists
XXX (Package A)
XXX (Package B)
XXX (Package C)
XXX (Calling Service)
XXX (Customized Information)
Section 202.11, Florida Statutes (F.S.).
Section 202.12, F.S.
Section 202.16, F.S.
Section 212.05, F.S.
Rule 12A-1.0092, Florida Administrative Code (F.A.C.).
XXX (the Taxpayer)
FL Sales Tax Registration XX
Business Partner XXX
Dear :
This is a response to your letter of December 7, 2004, requesting a Technical Assistance Advisement (TAA) regarding
the above-referenced matter. This response to your request constitutes a TAA under Chapter 12-11, F.A.C., and is
issued to you under the authority of Section 213.22, F.S.
Stated Facts and Requested Advisement
The Taxpayer is a wholly owned subsidiary of XXX (Parent), with its principal place of business outside Florida. The
Taxpayer offers various services to motorists, delivered from locations outside Florida using wireless communications
to facilitate delivery. Generally, the Taxpayer's services are initiated by a motorist's request. Some requests are made
from within the vehicle, and others from outside the vehicle.
To receive the Taxpayer's services, a motorist's vehicle must be equipped with specialized hardware and software.
The equipment is sold as a part of a vehicle purchase by a third party. The Taxpayer does not own the equipment and
does not maintain or repair it. The equipment in the vehicle can dial a pre-programmed ten digit number to establish a
connection between the vehicle and one of the Taxpayer's call centers, which are located outside Florida. The number
is generally unknown to the motorist and can not be used to complete a call from any other type of telephone
instrument. You state that none of the services subject to this request allows a customer to initiate, receive, or
otherwise engage in communications except to the extent necessary for the Taxpayer to deliver the services
described below.
To receive many of the Taxpayer's services, the motorist presses a button on a console within the vehicle, causing the
pre-programmed number to be dialed, establishing a connection to a call center. For other services, the motorist must
contact the Taxpayer from outside the vehicle, using a landline or wireless telephone and carrier of the motorist's
choice to dial a toll free number provided by the Taxpayer. The Taxpayer purchases communications services from

wireless and landline providers of communications services for this purpose and to facilitate connections with the
vehicles. Regardless of the manner used to contact a call center, a live representative of the Taxpayer responds to
the call. The one exception is Online Concierge, a service provided only over the Internet.
As discussed below, some of the Taxpayer's services involve the use of communications services to facilitate contacts
by the Taxpayer with third parties. You state that, as with the contacts between the vehicle or motorist and the call
center, the contacts with third parties are part of the services provided to motorists. The Taxpayer also uses
communications services to facilitate the transmission of data from the vehicle relating to its location and operational
condition as required to deliver the Taxpayer's services. The Taxpayer pays for any communications services required
for these purposes without any separate charge to the motorist.
The Taxpayer combines the services into packages for sale. Each package is sold for a flat monthly or annual price.
There are no additional charges based on usage, number of service requests, or any other criteria. Payment is
generally accomplished by check or credit card. The Taxpayer markets its services in the 48 contiguous United
States, Alaska, Hawaii, and Canada, utilizing various media forms including the Internet. The basic package is the
"Package A" plan, to which additional services may be added.
The following services are included in Package A for a flat monthly or annual fee:
Airbag Deployment Notification. When the airbag deploys, the hardware in the vehicle automatically sends a signal to
one of the Taxpayer's call centers, without the necessity for action by the motorist. The technology in the vehicle
includes a Global Positioning System (GPS) capability, which enables a call center representative to determine the
location of the vehicle. The call center representative attempts to contact the motorist to ascertain if assistance is
needed. The signal to the call center and the call center representative's attempt to communicate with the motorist
occur through the communications services purchased by the Taxpayer. If the motorist does not respond or responds
that assistance is needed, call center contacts unrelated public safety personnel, also using communications services
it purchases from communications services providers.
Stolen Vehicle Tracking. The GPS functionality enables the Taxpayer to track the vehicle location if it is stolen and
provide information to law enforcement authorities (not the customer). The motorist contacts a call center
representative by dialing a toll free number provided by the Taxpayer that is different from the number programmed
into the vehicle. These calls are necessarily initiated from outside the vehicle over a conventional landline or wireless
telephone.
Emergency Services. In the event of an emergency, call center representative contacts emergency service personnel.
Except where the airbag is deployed, this service is initiated when the motorist presses a red emergency button on the
console within the vehicle or dials a toll-free number provided by the Taxpayer using a conventional wireless or
landline telephone. The vehicle's location is available to the Taxpayer through the GPS functionality.
Roadside Assistance. The call center representative arranges for roadside assistance when required (e.g., flat tires,
empty gas tank, dead battery, other breakdowns). The representative also notifies persons at the motorist's
destination of the delay. The motorist presses a button on the console within the vehicle or places a conventional

telephone call using a toll-free number provided by the Taxpayer.
Remote Door Unlock. The Taxpayer can unlock the vehicle doors from its call center. The motorist calls the Taxpayer
from outside the vehicle over a toll-free number provided by the Taxpayer to request that a call center representative
unlock the doors. Upon verifying a PIN number provided by the motorist, the representative performs the requested
function by sending a signal to the equipment in the vehicle (the representative can also remotely lock the vehicle
doors).
Remote Horn and Lights. A call center representative can remotely cause the exterior lights to flash and the vehicle
horn to sound to help a motorist locate his or her vehicle. The motorist would request this from outside the vehicle by
dialing the call center over a toll-free number provided by the Taxpayer.
Remote Diagnostics. A call center representative can remotely access a vehicle's diagnostic system and advise the
motorist whether it is safe to continue driving. For example, if a service light illuminates, the motorist may press a
button on the console within the vehicle or dial the call center over a toll free number provided by the Taxpayer. The
representative at the call center is able to read diagnostic data that is available from the vehicle and advise the
motorist accordingly. The representative XXX will also arrange for assistance to be sent to the motorist's location if
required.
Accident Assist. The motorist can notify the Taxpayer of an accident by pressing a button on the console within the
vehicle or dialing the call center over a toll-free number provided by the Taxpayer. A call center representative will
contact the motorist's insurance company, police, and other emergency service personnel, and a friend or family
member of the motorist. The Taxpayer has a "best practices" list to assist through most accident situations.
Online Concierge. The Taxpayer maintains a website with information about entertainment, restaurants, shopping,
etc. The motorist can search the database and send the Taxpayer an e-mail if unable to find the information sought.
To obtain this service, the motorist accesses the website with a unique password. This service does not involve either
the equipment in the vehicle or any dialing of the call center. In addition, the motorist must have his or her own,
independent means of obtaining Internet access.
For a higher flat periodic amount, Package B is available. This option includes all the features of Package A, and in
addition, the following:
Driving Directions. This service uses GPS tracking to aid the motorist without the need to stop or leave the vehicle.
The motorist presses a button on the console in the vehicle, and a call center representative responds, ascertaining
the vehicle location and assisting the motorist with directions to their destination.
Information and Convenience Services. By pressing a button on the console, the motorist obtains recommendations
from call center representative for lodging, assistance with reservations, directions to the nearest ATM, gas station,
restaurants, and more.
Ride Assist. If the motorist or vehicle is not suitable for driving, the call center representative will call a taxicab upon

request, or attempt to contact a relative or friend.
For a higher flat periodic sum, a motorist may purchase Package C, which consists of all the features of Package B,
and in addition, an expanded version of the XXX services described previously. The expanded version is available
from within the vehicle, and includes assistance with delivery of gifts, restaurant or entertainment reservations, and the
like.
The Taxpayer also offers Calling Service, which allows motorists wireless communications service from within the
vehicle. Calling Service is an option for customers, for which they pay a separate fixed price to prepurchase a
specified number of usage minutes. The minutes included in a customer's Calling Service plan may also be used to
access the Taxpayer's "Customized Information." The Customized Information service allows Calling Service
customers to hear location-based weather and traffic reports, news, sports, financial information, and entertainment,
and provides access to e-mail. You state in your letter that Calling Service is not a subject of the instant request.
The Taxpayer's Internet website states that the benefit to Package A is "XXX," and that the plan "XXX." The
Taxpayer's television advertising follows this same theme.
Requested Advisement
That none of the stated services offered by the Taxpayer are subject to tax pursuant to either Chapter 202, F.S., or
Chapter 212, F.S.
Applicable Authority
Communications Services Tax
Section 202.12(1)(a), F.S., provides in pertinent part:
The Legislature finds that every person who engages in the business of selling communications services at retail in
this state is exercising a taxable privilege. It is the intent of the Legislature that the tax imposed by chapter 203 be
administered as provided in this chapter.
(1) For the exercise of such privilege, a tax is levied on each taxable transaction, and the tax is due and payable as
follows:
(a) Except as otherwise provided in this subsection, at a rate of 6.8 percent applied to the sales price of the
communications service which:

1. Originates and terminates in this state, or
2. Originates or terminates in this state and is charged to a service address in this state,
   when sold at retail, computed on each taxable sale for the purpose of remitting the tax due. The gross receipts tax

imposed by chapter 203 shall be collected on the same taxable transactions and remitted with the tax imposed by this
paragraph....
Section 202.19, F.S., authorizes local government authorities to levy a discretionary communications services tax.
Section 202.19(4), F.S., provides that the tax imposed by any municipality or county applies to all communications
services subject to tax under Section 202.12, F.S., that originate or terminate in Florida and are charged to a service
address located in the municipality or county imposing the tax. In addition, a discretionary sales surtax levied by a
county or school board under Section 212.055, F.S., is imposed as a local communications services tax upon
communications services subject to tax under Section 202.12, F.S., that originate or terminate in Florida and are
charged to a service address in the county. Section 202.19(5), F.S.
Section 202.11, F.S., provides in pertinent part:
(3) "Communications services" means the transmission, conveyance, or routing of voice, data, audio, video, or any
other information or signals, including cable services, to a point, or between or among points, by or through any
electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter
devised, regardless of the protocol used for such transmission or conveyance. The term does not include:
(a) Information services.

(10) "Prepaid calling arrangement" means the separately stated retail sale by advance payment of communications
services that consist exclusively of telephone calls originated by using an access number, authorization code, or other
means that may be manually, electronically, or otherwise entered, and that are sold in predetermined units or dollars
of which the number declines with use in a known amount.

(12) "Retail sale" means the sale of communications services for any purpose other than for resale or for use as a
component part of or for integration into communications services to be resold in the ordinary course of business.

(14) "Sales price" means the total amount charged in money or other consideration by a dealer for the sale of the right
or privilege of using communications services in this state, including any property or other services that are part of the
sale. The sales price of communications services shall not be reduced by any separately identified components of the
charge that constitute expenses of the dealer .

(b) The sales price of communications services does not include charges for any of the following:

4. The sale or recharge of a prepaid calling arrangement.

7. Charges for property or other services that are not part of the sale of communications services, if such charges are
   stated separately from the charges for communications services.

Section 202.16(2), F.S., provides:

A sale of communications services that are used as a component part of or integrated into a communications service
or prepaid calling arrangement for resale, including, but not limited to, carrier-access charges, interconnection charges
paid by providers of mobile communication services or other communication services, charges paid by cable service
providers for the transmission of video or other programming by another dealer of communications services, charges
for the sale of unbundled network elements, and any other intercompany charges for the use of facilities for providing
communications services for resale, must be made in compliance with the rules of the department. Any person who
makes a sale for resale which is not in compliance with these rules is liable for any tax, penalty, and interest due for
failing to comply, to be calculated pursuant to s. 202.28(2)(a).
Sales and Use Tax
Section 212.05, F.S., provides in pertinent part:
212.05 Sales, storage, use tax.
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 ... or who rents or furnishes any of the things or
services taxable under this chapter ....
(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:

(e)1. At the rate of 6 percent on charges for:
a. Prepaid calling arrangements. The tax on charges for prepaid calling arrangements shall be collected at the time of
sale and remitted by the selling dealer.
(I) "Prepaid calling arrangement" means the separately stated retail sale by advance payment of communications
services that consist exclusively of telephone calls originated by using an access number, authorization code, or other
means that may be manually, electronically, or otherwise entered and that are sold in predetermined units or dollars
whose number declines with use in a known amount.
(II) If the sale or recharge of the prepaid calling arrangement does not take place at the dealer's place of business, it
shall be deemed to take place at the customer's shipping address or, if no item is shipped, at the customer's address
or the location associated with the customer's mobile telephone number.
(III) The sale or recharge of a prepaid calling arrangement shall be treated as a sale of tangible personal property for
purposes of this chapter, whether or not a tangible item evidencing such arrangement is furnished to the purchaser,
and such sale within this state subjects the selling dealer to the jurisdiction of this state for purposes of this
subsection.

(i)1. At the rate of 6 percent on charges for all:
a. Detective, burglar protection, and other protection services .

4. If a transaction involves both the sale or use of a service taxable under this paragraph and the sale or use of a
   service or any other item not taxable under this chapter, the consideration paid must be separately identified and
   stated with respect to the taxable and exempt portions of the transaction or the entire transaction shall be presumed
   taxable. The burden shall be on the seller of the service or the purchaser of the service, whichever applicable, to
   overcome this presumption by providing documentary evidence as to which portion of the transaction is exempt from
   tax. The department is authorized to adjust the amount of consideration identified as the taxable and exempt portions
   of the transaction; however, a determination that the taxable and exempt portions are inaccurately stated and that the
   adjustment is applicable must be supported by substantial competent evidence.
   Section 212.055, F.S., authorizes the imposition of discretionary surtaxes by local governments. The tax levied
   pursuant to Section 212.055, F.S., applies to all transactions occurring in the local jurisdiction that are subject to the
   state tax imposed on sales, use, services, rentals, admissions, and other transactions by Chapter 212, F.S., and
   communications services as defined for purposes of Chapter 202, F.S. Section 212.054(2)(a), F.S. A transaction is
   deemed to have occurred in a county imposing the surtax when the sale includes an item of tangible personal
   property, a service, or tangible personal property representing a service, and delivery takes place within the county.
   Section 212.054(3)(a)1., F.S.
   Rule 12A-1.0092, F.A.C., provides in pertinent part:

(2)(a) Detective, burglar protection, and other protection services are those services which are rendered to minimize
or prevent loss or damage to life, limb, or property and are of a kind typically performed by security or alarm system
companies, or are those investigative services which are rendered to obtain evidence or other information for legal,
business, employment, or personal purposes of a kind typically performed by detective or investigative agencies.
These taxable services include:

2. Burglar or fire alarm or other securily system devices monitoring and maintenance;
   a. The installation of alarm or security systems that remain tangible personal property is governed by the provisions of
   Rule 12A-1.016, F.A.C.
   b. The installation of alarm or security systems that become a part of real property is governed by the provisions of
   Rule 12A-1.051, F.A.C.
   c. The monitoring or maintenance of alarm or security systems is a taxable service for systems that are considered to
   be either tangible personal property or a part of real property. The term maintenance includes any inspection of an
   alarm or security system to confirm its proper working order. The term maintenance does not include the expansion or
   upgrade of an existing system, but does include the replacement of defective components.
   **

(b) The services in paragraph (a) above are taxable for all persons, businesses, residences, or nonresidential
properties.

(3)(a) If a transaction involves both the sale or use of a service which is taxable and the sale or use of a service which
is not taxable, the charges for the taxable portion of the transaction must be separately stated from the charges for the
non-taxable portion or the entire transaction will be presumed taxable.

(6) Detective, burglar protection, and other protection service providers are considered the ultimate users or
consumers of the tangible personal property sold to them and used in connection with their service and are required to
pay the tax imposed upon such sales of tangible personal property to their dealers.
Discussion and Response
Communications Services Tax
The term "communications services" is defined in Section 202.11(3), F.S., as:
"Communications services" means the transmission, conveyance, or routing of voice, data, audio, video, or any other
information or signals, including cable services, to a point, or between or among points, by or through any electronic,
radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter devised,
regardless of the protocol used for such transmission or conveyance....
Based on your description of the services available in the Packages A, B, and C, these bundled services are not
subject to communications services tax pursuant to Chapter 202, F.S. With regard to the services provided in the
three described packages, the Taxpayer is the consumer of the communications services it uses to provide its
services, and not the provider of communications services. As such, the Taxpayer should pay Florida communications
services tax upon any purchase of communications services taxable pursuant to Section 202.12(1), F.S.
In advancing the proposition that the packaged services do not involve the sale of communications services, you take
the position that that the sale should be analyzed under the "true object" test. It must be noted that the "true object"
test has not been adopted in Florida. See AT&T v. Department of Revenue, 764 So.2d 665 (Fla. 1st DCA 2000). The
court in AT&T specifically declined AT&T's invitation to adopt the "true object" test. AT&T at 670. The Department in
the instant circumstances likewise declines such an invitation.
Sales Tax
You correctly identify in your letter that Section 212.05(1)(i)1.a., F.S., is the relevant provision of Chapter 212, F.S., to
discuss with regard to the services provided by the Taxpayer. The position taken by the Taxpayer is that Section
212.05(1)(i)1.a., F.A.C., does not apply to its services.
Section 212.05(1)(i)1.a., F.S., imposes a tax upon "charges for all ... [d]etective, burglar protection, and other
protection services." The Department has defined "detective, burglar protection, and other protection services" as "

those services which are rendered to minimize or prevent loss or damage to life, limb, or property and are of a kind
typically performed by security or alarm system companies." (emphasis supplied) Rule 12A-1.0092(2)(a), F.A.C. (FN 1
) Rule 12A-1.0092(2)(a), F.A.C., continues by providing a non-exhaustive list of taxable services, including "[b]urglar
or fire alarm or other system devices monitoring and maintenance." Rule 12A-1.0092(2)(a)2., F.A.C. The monitoring
and maintenance of alarm or security systems is a taxable service whether such systems are considered tangible
personal property or part of real property. Rule 12A-1.0092(2)(a)2.c., F.A.C.
The Taxpayer points to TAA 93A-053 as consistent with its view that the services it provides are not subject to sales
tax, indicating that the services it provides and those provided by the taxpayer in TAA 93A-053 are similar, and stating
that neither "are of a kind typically performed by security or alarm system companies." As the Taxpayer has correctly
pointed out in prior correspondence, a taxpayer may not rely on a TAA issued to a different taxpayer. See Rule 1211.007(1), F.A.C. However, a comparison of the Taxpayer's services to those involved in TAA 93A-053 is inapposite.
The company's services in TAA 93A-053 simply did not involve monitoring.
The company in TAA 93A-053 offered "wellness check" and "reminder" services to subscribers for a monthly charge.
For wellness check services, the company (by computer or mechanically) would call the telephone number of a
subscriber at specified times each day and ask the subscriber to respond by punching "I" if not requiring assistance, or
"0" if they did require assistance. If the subscriber did not answer the telephone after 10 rings, the company would
telephone up to three designated numbers, requesting assistance for the subscriber. For reminder services, at times
designated by the subscriber, the company would call and provided a requested verbal reminder. The subscriber was
not directed or required to respond to the reminder messages. The only requirement for a subscriber was that they
have a touch-tone phone - no specialized equipment was required or installed at the subscriber's residence. The
company's services consisted of pre-planned telephone calls - the company did not monitor anything.
Monitoring of alarm or security systems is specifically identified by the Department as a service taxable pursuant to
Section 212.05(1)(i)1.a., F.S. See Rule 12A-1.0092(2)(a)2.c., F.A.C. Several services provided by the Taxpayer in
Package A clearly constitute the monitoring of alarm or security system devices and are thus subject to tax, including:
Airbag Deployment Notification; Stolen Vehicle Tracking; Emergency Services; Remote Diagnostics; and Accident
Assist. As stated above, the Taxpayer markets the Package A portion of its plans to potential customers as the
provision of "safety and security services." (FN 2) Therefore, this determination is completely in line with the
Taxpayer's own characterization of the services it offers.
Section 212.05(1)(i)4., F.S., indicates that when a single charge is made for a taxable service and for services or
items not subject to tax, the entire charge is subject to tax. See also Rule 12A-1.0092(3)(a), F.A.C. Thus, only one
taxable service offered in a packaged or "bundled" group of services and items need exist to make the entire charge
to a customer subject to tax pursuant to Section 212.05(1)(i)1.a., F.S. Here, a single charge is made by the Taxpayer
for the various services contained in the packages sold to customers (not including Calling Service," which is
separately stated as discussed above). Therefore, the entire charge made to customers by the Taxpayer (excluding
any separately stated charge for Calling Service) is subject to sales tax, plus any applicable local discretionary sales
surtax. Because the Taxpayer charges customers for services taxable under Chapter 212, F.S., it therefore must
register as a sales and use tax dealer engaging in business in Florida. See Rule 12A-1.060, F.A.C.; see also Rule
12A-1.056, F.A.C., for return filing requirements.

Calling Service
Although advice was not requested with regard to the taxability of Calling Service, the following analysis is provided to
aid the Taxpayer in complying with Florida law. Calling Service provides the customers with wireless telephone
service whereby the customer pre-purchases a specific number of usage minutes for a separately stated charge. The
minutes in a customer's Calling Service plan include access to the Customized Information feature. There is no
separately stated charge with regard to Customized Information. Rather, usage minutes purchased under a Calling
Service plan may be used to access the Customized Information feature.
Section 212.05(1)(e)1.a., F.S., imposes sales tax at the rate of six percent (6%), plus any applicable local
discretionary surtax, upon the charge for "prepaid calling arrangements." A "prepaid calling arrangement" is defined by
Section 212.05(1)(e)1.a.(I), F.S., as:
... the separately stated retail sale by advance payment of communications services that consist exclusively of
telephone calls originated by using an access number, authorization code, or other means that may be manually,
electronically, or otherwise entered and that are sold in predetermined units or dollars whose number declines with
use in a known amount.
The sale or recharge of a prepaid calling arrangement is treated as a sale of tangible personal property, regardless of
whether a tangible item is received by the purchaser. Section 212.05(1)(e)1.a.(III), F.S. When the sale or recharge of
a prepaid calling arrangement does not take place at the seller's place of business and no item of tangible personal
property is shipped to the customer, the sale or recharge is deemed to take place at "the customer's address or the
location associated with the customer's mobile telephone number." Section 212.05(1)(e)1.a.(II), F.S. Chapter 202,
F.S., contains a definition of prepaid calling arrangement identical to that used in Chapter 212, F.S. Section
202.11(10), F.S. The sale or recharge of a prepaid calling arrangement is excluded from the tax imposed by Chapter
202, F.S. See Section 202.11(14)(b)4., F.S.
The wireless telephone services provided by the Taxpayer under Calling Service clearly are "communications
services" as defined in Section 202.11(3), F.S. The charge to a customer for Calling Service is equally clearly a
"separately stated retail sale of communications services" that are sold in predetermined units whose number declines
with usage. In addition, in order to be considered a prepaid calling arrangement, the communications services that are
sold must consist exclusively of telephone calls. (FN 3) Under Calling Service, the only communications services sold
by the Taxpayer consist exclusively of telephone calls. (FN 4) Thus, the charge for Calling Service is taxable under
Section 212.05(1)(e)1., F.S., including any applicable local discretionary surtax, as a charge for a prepaid calling
arrangement.
Under the facts presented, the sale or recharge of Calling Service minutes is deemed to take place at the customer's
address or location associated with the customer's mobile telephone number.
Accordingly, with regard to the charge made to customers for Calling Service, the Taxpayer must register as a sales
and use tax dealer engaging in business in Florida. See Rule 12A-1.060, F.A.C.; see also Rule 12A-1.056, F.A.C., for

return filing requirements. In addition, Section 202.16(2), F.S., indicates that communications services used as a
component part or integrated into a prepaid calling arrangement may be purchased for resale. In order to properly
make such a purchase for resale, the Taxpayer must register with the Department as a dealer of communications
services. See Rule 12A-19.010. The Taxpayer is encouraged to register through the Department's Internet site:
www.myflorida.com/dor. The Taxpayer would be considered a reseller of the communications services that are used
as a component part or integrated into the Calling Service plans it sells to customers. See Section 202.16(2), F.S. A
registered dealer making purchases for resale may issue copies of its Communications Services Tax Annual Resale
Certificate (form DR-700015) in lieu of paying communications services tax to its providers. Therefore, once
registered, the Taxpayer may present a copy of its Communications Services Tax Annual Resale Certificate to its
provider in lieu of the provider including communications services tax on its bill to Taxpayer. See Rule 12A-19.060,
F.A.C.
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. 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.
If you have any further questions with regard to this matter and wish to discuss them, you may contact me directly at
(850) 922-4710.
Sincerely,
Thomas K. Butscher
Senior Attorney
Technical Assistance & Dispute Resolution
TKB/
Control # 62319

FOOT NOTE #1 - It is noted that "security" is defined to include "[f]reedom from doubt, anxiety, or fear,... [s]omething
that gives or assures safely...." The American Heritage Dictionary, 1575 (4th ed. 2000).
FOOT NOTE #2 - This would seem to indicate that a customer's primary reason for purchasing the Taxpayer's

services (at the urging of the Taxpayer's marketing) should be to receive security services. It is perhaps noteworthy
that the Taxpayer does not, as it did with regard to communications services, urge the adoption of the "true object"
test with regard to taxability under Section 212.05(1)(i)1.a., F.S.
FOOT NOTE #3 - Such telephone calls must be "originated by using an access number, authorization code, or other
means that may be manually, electronically, or otherwise entered." The information available to the Department
indicates that this requirement is met.
FOOT NOTE #4 - Customized Information, a feature of Calling Service, is accessed using the wireless telephony that
is only made available to Calling Service subscribers. Moreover, Customized Information does not itself constitute
communications services but is in the nature of an "information service," which is specifically excluded from the
definition of communications services. See Section 202.11(3)(a) and (7), F.S.