Was a mobile launch platform built for NASA tangible personal property, allowing resale purchases and an exempt direct federal sale?

Plain-English summary

A contractor agreed to build a mobile launch platform for NASA at Kennedy Space Center. The platform would rest on existing columns using bearing plates and its own weight—without bolts or another permanent attachment. A crawler transporter could drive underneath, lift it, move it into the Vehicle Assembly Building for rocket assembly, and then carry the platform and spacecraft to a launch site three miles away.

Florida answered three tax questions:

1. The platform was tangible personal property. It did not become a real-property fixture because it was not permanently attached, could be removed without damaging the underlying real estate, and was intended to move routinely from place to place.
2. Incorporated materials were purchases for resale. The builder could use its Annual Resale Certificate to buy materials, components, and parts without tax when those items were integrated into the finished platform sold to NASA.
3. The direct sale to NASA was exempt. Section 212.08(6) exempts sales to the United States Government when the government pays the dealer directly. The platform sale qualified if NASA made direct payment.

What this means for you

Mobility and attachment determine fixture status

An enormous structure can still be tangible personal property. Here, the platform's weight alone held it on the columns, and its normal function required repeated movement by a crawler.

Intent reinforces the physical facts

The name "mobile launch platform" and the planned operational movements showed that NASA did not intend an indefinite permanent attachment to the site.

Only incorporated inputs receive resale treatment

The ruling covers direct materials, components, and parts bought for incorporation into the final platform. The builder documents those purchases by extending its Florida Annual Resale Certificate to vendors.

The federal exemption requires direct government payment

The sale was exempt because NASA was the purchaser and would pay the dealer directly. A different payment chain or a purchase by a private prime contractor would require separate analysis.

Common questions

Q: Why wasn't the launch platform real property?
A: It was not permanently attached and was designed to be lifted from its supports and transported routinely between operational sites.

Q: Could the builder buy all project inputs tax-free?
A: The ruling allowed tax-exempt resale purchases of materials, components, and parts incorporated into the finished platform.

Q: Was the platform sale to NASA taxable?
A: No, provided NASA paid the builder directly for the tangible personal property.

Q: Did progress payments change the result?
A: The facts noted periodic progress payments under a fixed-price contract, but the Department's stated condition was direct payment by NASA.

Citations and references

• Fla. Stat. § 212.02(19) (tangible personal property)
• Fla. Stat. § 212.05 (retail sales tax)
• Fla. Stat. § 212.08(6) (sales to the United States Government)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)
• Fla. Admin. Code r. 12A-1.043(1)(d)-(e) (direct materials purchased for resale)
• Fla. Admin. Code r. 12A-1.051(2)(c) (fixture analysis)
• Fla. Admin. Code r. 12A-1.038(4)(c) (federal-agency purchases)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-003

Original ruling text

SUMMARY
QUESTION: Is Taxpayer’s mobile launch platform considered tangible personal property, as
defined by s. 212.02(19), F.S.? If so, do Taxpayer's purchases of materials, components, and
parts for incorporation into the platform constitute tax-exempt purchases for resale? Finally, is
the sale of the Platform directly to NASA subject to Florida sales tax?
ANSWER: The platform constitutes tangible personal property. Taxpayer’s purchases of
materials, components, and parts for incorporation into the platform constitute tax-exempt
purchases for resale. The sale of the platform directly to NASA is not subject to Florida sales
tax.

January 16, 2009

XXX
XXX
XXX
XXX
Re:

Technical Assistance Advisement 09A-003
Sales and Use Tax – Sales of tangible personal property to NASA
Section 212.02, Florida Statutes [F.S.]
Section 212.05, F.S.
Section 212.08, F.S.
Rule 12A-1.043, Florida Administrative Code [F.A.C.]
Rule 12A-1.051, F.A.C.
XXX [Taxpayer]

Dear XXX
This is a response to your letter [the Letter] of August 22, 2008, requesting a Technical
Assistance Advisement [TAA] regarding the above-referenced matter. This response to your
request constitutes a TAA under Chapter 12-11, Florida Administrative Code [F.A.C.], and is
issued to you under the authority of Section 213.22, Florida Statutes [F.S.].
ISSUE
Is Taxpayer’s mobile launch platform [the Platform] considered tangible personal property, as
defined by s. 212.02(19), F.S.? If so, do Taxpayer's purchases of materials, components, and
parts for incorporation into the Platform constitute tax-exempt purchases for resale. Finally, is
the sale of the Platform directly to NASA subject to Florida sales tax?
FACTS

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Taxpayer has agreed to build the Platform for NASA. The Platform will be built on top of
existing columns at the Kennedy Space Center in Florida. Taxpayer states that the Platform will
not be permanently attached to these columns. Rather, the Platform will use a bearing plate
assembly that allows the bottom of the Platform to rest on the columns with nothing holding the
Platform in place but the weight of the Platform itself.
NASA will use a “crawler transport” that is capable of driving underneath the Platform, lifting
the Platform off of the columns, and transporting it to another site. The crawler transport can
carry the Platform into the Vehicle Assembly Building, where a rocket/spacecraft will be
assembled on top of the Platform. The crawler transport can then transport the Platform with the
rocket/spacecraft on board to the launch site (located three miles away).
Taxpayer has entered into a fixed price contract for the construction of the Platform. Payments
of the fixed price will be made in periodic/progress payments.
In the Letter, Taxpayer asks the following three questions concerning its contract with NASA:
1) Is [the Platform] considered tangible personal property as defined by [s.
212.02(19), F.S.]?
2) Are [Taxpayer's] purchases of materials, components, and parts for
incorporation into [the Platform] purchases for resale and, therefore, not subject to
Florida sales and use tax?
3) Is the sale of [the Platform] to [NASA] by [Taxpayer] subject to Florida sales
and use tax?
TAXPAYER’S POSITION
In the Letter, Taxpayer addresses each question individually, as follows:
1) [The Platform] is tangible personal property under Florida law.
2) Because [the Platform] is tangible personal property that is being sold to
[NASA], all of the materials, components and parts purchased by [Taxpayer] for
incorporation into [the Platform] are nontaxable purchases for resale. [Taxpayer]
should issue its resale certificate to its vendors, suppliers and subcontractors.
3) The sale of [the Platform] to [NASA] is exempt from Florida sales and use tax
because [the Platform] is tangible personal property. [NASA] is a United States
governmental entity, and [NASA] is paying [Taxpayer] directly for the purchase
of [the Platform].

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APPLICABLE LAW
Section 212.02(19), F.S., provides, in part:
"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
….

Section 212.05, F.S., provides, in part:
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 ….
(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:
(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.

Rule 12A-1.051(2), F.A.C., provides, in part:
(c)1. “Fixture” means an item that is an accessory to a building, other structure, or
to land, that retains its separate identity upon installation, but that is permanently
attached to the realty. Fixtures include such items as wired lighting, kitchen or
bathroom sinks, furnaces, central air conditioning units, elevators or escalators, or
built-in cabinets, counters, or lockers.

3. The determination whether an item is a fixture depends upon review of all the
   facts and circumstances of each situation. Among the relevant factors that
   determine whether a particular item is a fixture are the following:
   a. The method of attachment. Items that are screwed or bolted in place, buried
   underground, installed behind walls, or joined directly to a structure’s plumbing
   or wiring systems are likely to be classified as fixtures. Attachment in such a
   manner that removal is impossible without causing substantial damage to the
   underlying realty indicates that an item is a fixture.

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b. Intent of the property holder in having the item attached. If the property holder
who causes an item to be attached to realty intends that the item will remain in
place for an extended or indefinite period of time, that item is more likely to be a
fixture. That intent may be determined by reviewing all of the property holder’s
actions in regard to the item, including how the item is treated for purposes of ad
valorem and income tax purposes. For example, if a property owner reports the
value of the item for purposes of ad valorem taxation of the realty and depreciates
the item for tax and financial accounting purposes as real property, that indicates
an intent that the property is permanently attached as a fixture.

(h)2. The term “real property contract” does not include:

b. A contract to furnish tangible personal property that will be installed or affixed
in such a way as to become a fixture or improvement to real property if the person
furnishing the property has not also contracted to affix or install it.

Rule 12A-1.043(1), F.A.C., provides, in part:
(d) Persons who manufacture, produce, compound, process, or fabricate items of
tangible personal property for resale or for their own use or consumption may
purchase direct materials tax exempt but shall include the cost of the direct
materials when computing tax on the cost of the items so manufactured, produced,
compounded, processed, or fabricated for such persons' own use or consumption.
If tax has been paid on the direct materials, the method described in paragraph (c)
should be used when computing the tax on the cost of the items so manufactured,
produced, compounded, processed, or fabricated.
(e)1. To purchase direct materials tax exempt, dealers registered with the
Department to sell tangible personal property may extend a copy of their Annual
Resale Certificate (form DR-13) to the selling dealer in lieu of paying tax at the
time of purchase. The cost of such materials is subject to tax on the cost of the
items so manufactured, produced, compounded, processed, or fabricated, as
provided in paragraph (d).

Section 212.08(6), F.S., provides, in part:

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There are also exempt from the tax imposed by this chapter sales made to the
United States Government, a state, or any county, municipality, or political
subdivision of a state when payment is made directly to the dealer by the
governmental entity….
DISCUSSION AND RESPONSE
Taxpayer’s questions will be analyzed in the order in which they were presented in the Letter.
1) Is [the Platform] considered tangible personal property as defined by [s.
212.02(19), F.S.]?
Section 212.02(19), F.S., provides that the term “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. See s. 212.02(19), F.S. Such property is taxable when sold at retail in
this state. See s. 212.05(1)(a)1.a., F.S.
Taxpayer states that the Platform will be constructed from tangible materials and will be used to
transport rockets and other spacecraft from one location to another. Thus, it is clear that the
Platform is tangible personal property at the time of construction. However, under certain
circumstances, tangible personal property will lose its character as “tangible personal property”
if it becomes incorporated into real property. Rule 12A-1.051(2)(c)1., F.A.C., provides that
tangible personal property will become a real property fixture when it is permanently attached as
an accessory to a building, other structure, or to land, despite the fact that the item retains its
separate identity upon installation.
The determination whether an item is a real property fixture depends upon review of all the facts
and circumstances of each situation. The Department may examine several relevant factors to
determine whether a particular item is a fixture, including the method of attachment and the
intent of the property holder in having the item attached to real property. After a careful
examination of the facts provided, the Department has determined that the Platform is not a real
property fixture.
First, it is evident that the Platform is not permanently attached to real property. Typically, items
that are screwed or bolted in place, buried underground, installed behind walls, or joined directly
to a structure’s plumbing or wiring systems are likely to be classified as fixtures. In such
circumstances, removal is impossible without causing substantial damage to the underlying
realty. See Rule 12A-1.051(2)(c), F.A.C. However, in the present case, Taxpayer states that the
Platform will be temporarily attached to four existing columns and will be held in place by the
weight of the Platform itself. Taxpayer emphasizes that the Platform will routinely be removed
from these columns and will be transported from location to location by a transport crawler.
Thus, it is evident that the Platform will not be permanently attached to real property.
Additionally, Taxpayer’s intent to transport the Platform indicates that the Platform is not a real
property fixture. Generally, the property holder who causes an item to be attached to realty as a

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fixture intends that the item will remain in place for an extended or indefinite period of time.
Taxpayer’s Platform is referred to as a “mobile launch platform,” which indicates that it will not

Page 7
remain attached to real property for an extended period of time. Taxpayer emphasizes that it will
routinely transport the Platform from location to location via the transport crawler. Accordingly,
the Department agrees that the Platform is not a real property fixture, as defined in Rule 12A1.051(2)(c), F.A.C.
2) Are [Taxpayer's] purchases of materials, components, and parts for
incorporation into the mobile launch platform purchases for resale and, therefore,
not subject to Florida sales and use tax?
Rule 12A-1.043(1)(d), F.A.C., provides that persons who manufacture, produce, or fabricate
items of tangible personal property for resale may purchase direct materials, which will be
incorporated into the final product, exempt from Florida sales tax. To purchase direct materials
tax exempt, dealers registered with the Department to sell tangible personal property may extend
a copy of their Annual Resale Certificate (form DR-13) to the selling dealer in lieu of paying tax
at the time of purchase. See Rule 12A-1.043(1)(e)1., F.A.C.
Thus, Taxpayer may purchase materials, components, and other parts tax-exempt for resale,
when such items are purchased for incorporation into the Platform. These direct materials will
remain exempt from Florida tax, as long as Taxpayer integrates the items into the final product
(the Platform) that is sold to NASA.
3) Is the sale of [the Platform] to [NASA] by [Taxpayer] subject to Florida sales
and use tax?
Section 212.08(6), F.S., and Rule 12A-1.038(4)(c), F.A.C., provide that the sale of tangible
personal property by a registered Florida dealer to a federal agency is exempt from tax when
payment is made: 1) directly to the dealer by the governmental entity; or 2) by an employee
authorized on behalf of a federal agency. Rule 12A-1.038(4)(c), F.A.C., provides a suggested
exemption certificate to be issued by a federal employee to the selling dealer at the time of the
exempt purchase.
Accordingly, Taxpayer’s sale of the Platform to NASA will not be subject to Florida sales tax, if
NASA pays Taxpayer directly for the purchase of the Platform.
CONCLUSION
Taxpayer’s Platform constitutes tangible personal property under Florida law. Materials,
components, and parts that are purchased by Taxpayer for incorporation into the Platform are
considered nontaxable purchases for resale. The sale of the Platform directly to NASA is exempt
from Florida sales and use tax.
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

Page 8
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) 488-8565.
Sincerely,

Matt Crockett
Tax Law Specialist
Technical Assistance & Dispute Resolution
ID: 52596