When were Florida towing, vehicle-storage, and related administrative charges taxable?

Plain-English summary

Towing charges were not taxable when separately stated on the customer's invoice. If towing was combined with taxable storage or another taxable element, the transaction had to be examined as a whole, and a mixed taxable-and-nontaxable lump-sum charge was fully taxable.

Vehicle storage was exempt only when it resulted from a lawful impoundment by law enforcement or an authorized towing service. Other storage arising from law-enforcement calls remained taxable.

The storage provider needed documentation—such as a tow receipt or accident report signed by an officer—identifying the vehicle and storage company and expressly stating that storage resulted from lawful impoundment. Without that statement, tax had to be collected. Administrative fees were taxable or exempt according to the underlying transaction.

What this means for you

Invoice separation and precise impoundment records control. A law-enforcement connection alone does not establish the storage exemption.

Common questions

Was separately stated towing taxable? No.

When was storage exempt? Only when sufficiently documented as resulting from lawful impoundment.

How were administrative fees treated? They followed the taxability of the underlying transaction.

Citations and references

• Fla. Stat. §§ 212.03(6), 212.05, and 316.193(14)(c) and Fla. Admin. Code rr. 12A-1.006(17) and 12A-1.073(6), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11A-027

Original ruling text

SUMMARY
QUESTION: If the towing charges for the towing of a motor vehicle are separately stated on a
customer’s invoice, are those charges non-taxable?
ANSWER: Towing charges that are separately stated on a customer’s invoice are not subject to tax.
QUESTION: If the towing charges are not separately stated, and are combined with other charges
such as storage, are those charges taxable?
ANSWER: The taxation of towing charges that are not separately stated on a customer’s invoice
will be determined by an examination of the transaction as a whole. If the transaction includes both
taxable and nontaxable elements, then the entire charge is subject to tax.
QUESTION: Under what specific circumstances would the storage charges for a vehicle not be
subject to sales tax for a vehicle which was towed at the request of law enforcement?
ANSWER: Only those storage charges arising from a lawful impoundment by a law enforcement
agency or authorized towing service are not subject to tax. Any other storage charges arising from
law enforcement calls that do not rise to the level of a lawful impoundment are subject to tax.
QUESTION: What documentation is necessary in order to sufficiently document that the storage
fees for a vehicle which has been lawfully impounded is exempt from sales tax?
ANSWER: The company providing storage must maintain documentation that clearly provides that
the storage is a result of a lawful impoundment. This could include a tow receipt, an accident
report, or any other document signed by a law enforcement officer. The documentation should
indicate identifying information for the vehicle, the company that will provide storage, and a
statement that the storage is a result of a lawful impoundment.
QUESTION: If a tow receipt, which is generated as a result of a law enforcement request and
executed by law enforcement, fails to specify whether the tow and storage of the vehicle was a
result of “lawful impounding for legal reasons,” are the subsequent storage charges taxable or nontaxable?
ANSWER: Documentation that does not specify that the storage is a result of a lawful
impoundment is not sufficient to exempt the storage charges from tax. Absent sufficient
documentation, the storage provider must collect and remit tax on the storage charges.
QUESTION: Are the administrative fees, charged by tow operators to cover the administrative
services related to tow operations, a taxable service? If so, does this tax also apply to the
administrative fees charged for vehicles lawfully impounded for legal reasons?
ANSWER: The taxability of any administrative fees will be determined by the taxability of the
underlying transaction. If the administrative fees are imposed in connection with an otherwise
nontaxable transaction, then the administrative fees are not subject to tax. If the administrative fees

are imposed in connection with an otherwise taxable transaction, then the administrative fees are
subject to tax.

September 6, 2011
XXX
XXX
XXX
Re:

Technical Assistance Advisement 11A-027
Motor Vehicle Towing and Storage
Sections 212.03(6), 212.05, and 316.193(14)(c), Florida Statutes (F.S.)
Rules 12A-1.006(17) and 12A-1.073(6), Florida Administrative Code (F.A.C.)

Dear
This is a response to your letter dated May 10, 2011, in which you have requested a Technical
Assistance Advisement on towing and storage charges.
Stated Facts
Your letter states that your firm represents XXX (“Taxpayer”). Taxpayer is an association
representing companies that provide towing and storage of motor vehicles in Florida.
One of Taxpayer’s members received correspondence from the Florida Highway Patrol stating in
part that tax should not be charged on towing or storage charges “arising out of any law
enforcement calls for towing, roadside assistance, or storage.” Taxpayer previously sought and
received an informal Letter of Technical Advice, number 11A-259 issued March 2, 2011, from this
office regarding the proper tax treatment on these charges. Our letter provided that charges for
towing are not subject to tax if the charge is separately stated on the customer’s invoice. Our letter
went on to provide that storage charges are generally subject to tax; however, storage of vehicles
arising from a lawful impoundment by a local, state, or federal law enforcement agency is not
subject to tax. However, we stated that not all calls from law enforcement that result in storage of a
vehicle qualify as a lawful impoundment; therefore, any storage charges resulting from law
enforcement calls that do not qualify as a lawful impoundment are subject to tax.
You have now requested a Technical Assistance Advisement clarifying the following issues:

1. If the towing charges for the towing of a motor vehicle are separately stated on a customer’s
   invoice, are those charges non-taxable?
2. If the towing charges are not separately stated, and are combined with other charges such as
   storage, are those charges taxable?
3. Under what specific circumstances would the storage charges for a vehicle not be subject to
   sales tax for a vehicle which was towed at the request of law enforcement?

4. What documentation is necessary in order to sufficiently document that the storage fees for a
vehicle which has been lawfully impounded is exempt from sales tax?

5. If a tow receipt, which is generated as a result of a law enforcement request and executed by
   law enforcement, fails to specify whether the tow and storage of the vehicle was a result of
   “lawful impounding for legal reasons,” are the subsequent storage charges taxable or nontaxable?
6. Are the administrative fees, charged by tow operators to cover the administrative services
   related to tow operations, a taxable service? If so, does this tax also apply to the
   administrative fees charged for vehicles lawfully impounded for legal reasons?

Taxpayer’s Position
Taxpayer has not provided a specific position for any of the questions at issue.
Applicable Authority and Discussion
Towing Charges
Most services are not subject to tax in Florida.1 The towing of a motor vehicle is considered a
service and, as such, the charge for towing is not subject to tax, provided that the charges for towing
are separately stated on the customer’s invoice or receipt. See Rule 12A-1.006(17), F.A.C.
However, if the towing is performed as part of a larger transaction and the charges for the various
parts of the transaction are not separately stated, then the towing loses its classification as a service.
In those cases, the taxation of the transaction will be determined by examining the transaction as a
whole. If the transaction includes both taxable and nontaxable elements, then the entire transaction
becomes taxable.
Storage Charges
Section 212.03(6), F.S., provides that the lease or rental of parking or storage spaces for motor
vehicles in parking lots or garages is subject to tax on the total rental charged. However, Rule 12A1.073(6), F.A.C., specifically provides that the parking or storage of motor vehicles “arising from a
lawful impoundment by a local, state, or federal law enforcement agency or an authorized towing
service” does not constitute a contract for parking or storage and those charges are not subject to
tax. The plain language of the rule provides that only those charges arising from a “lawful
impoundment” are not subject to tax.
The term “lawful impoundment” is not defined in either Chapter 212, F.S., or Rule Chapter 12A-1,
F.A.C., applicable to sales and use tax. The only definition of the term in the Florida Statutes is
found in Section 316.193(14)(c), F.S., which provides that “‘[i]mpoundment,’ ‘impounding,’ or
‘impound’ means the act of storing a vehicle at a storage facility pursuant to an order of
impoundment or immobilization under subsection (6) where the person impounding the vehicle
1

Section 212.05, F.S., imposes tax on detective, burglar protection, and protection other services
and on nonresidential cleaning services. However, this request does not include or concern any of
these specified taxable services.

exercises control, supervision, and responsibility over the vehicle.” This definition is consistent
with that found in Black’s Law Dictionary, 8th Edition, which defines the term “impound” as “[t]o
place (something, such as a car or other personal property) in the custody of the police or the court,
often with the understanding that it will be returned intact at the end of the proceeding.”
Both definitions are consistent with the Department’s position that a lawful impoundment for
purposes of Rule 12A-1.073(6), F.A.C., occurs only when the owner of the motor vehicle does not
have direction or control over the vehicle. We therefore affirm the opinion given in the earlier
Letter of Technical Advice that only those storage charges arising from the lawful impoundment of
a vehicle, where the vehicle owner does not have direction or control over the vehicle, are not
subject to sales tax. Storage charges arising from law enforcement calls that do not rise to the level
of a lawful impoundment are subject to tax.
Administrative Fees
Your letter does not provide any information as to the administrative fees referenced. However, as
a general rule, the taxability of administrative fees will depend on the taxability of the any other
property or services sold in connection with the fees. Therefore, if the administrative fees are
imposed in connection with an otherwise nontaxable transaction, such as towing services only, then
the administrative fees will not be subject to tax. If the administrative fees are imposed in
connection with an otherwise taxable transaction, such as taxable storage fees, then the
administrative fees will be subject to tax.

Advisements
Based on the above discussion, the answers to your specific questions are as follows:

1. Towing charges that are separately stated on a customer’s invoice are not subject to tax.
2. The taxation of towing charges that are not separately stated on a customer’s invoice will be
   determined by an examination of the transaction as a whole. If the transaction includes both
   taxable and nontaxable elements, then the entire charge is subject to tax.
3. Only those storage charges arising from a lawful impoundment by a law enforcement
   agency or authorized towing service are not subject to tax. Any other storage charges
   arising from law enforcement calls that do not rise to the level of a lawful impoundment are
   subject to tax.
4. The company providing storage must maintain documentation that clearly provides that the
   storage is a result of a lawful impoundment. This could include a tow receipt, an accident
   report, or any other document signed by a law enforcement officer. The documentation
   should indicate identifying information for the vehicle, the company that will provide
   storage, and a statement that the storage is a result of a lawful impoundment.
5. Documentation that does not specify that the storage is a result of a lawful impoundment is
   not sufficient to exempt the storage charges from tax. Absent sufficient documentation, the
   storage provider must collect and remit tax on the storage charges.
6. The taxability of any administrative fees will be determined by the taxability of the
   underlying transaction. If the administrative fees are imposed in connection with an
   otherwise nontaxable transaction, then the administrative fees are not subject to tax. If the

administrative fees are imposed in connection with an otherwise taxable transaction, then
the administrative fees are subject to tax.
Closing Statement
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is
binding on the Department only under the facts and circumstances described in the request for this
advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific
situation summarized above. You are advised that subsequent statutory 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) 717-7105.
Sincerely,

Tammy S. Miller
Senior Attorney
Technical Assistance & Dispute Resolution
Record ID:

103339