Were design and printing charges for labels affixed to a seller's packaged food products subject to Florida sales tax?

Plain-English summary

The taxpayer sold packaged food products and hired a designer to create labels, which a printer produced and shipped to the taxpayer for attachment to the products.

Florida excluded one-time labels and packaging materials that accompanied food sold to customers. The rule also covered labels and their printing when they remained affixed to products or shipping containers and supplied information such as nature, quantity, maker, price, size, operation, or maintenance.

The Department concluded that both the design and printing charges were exempt. The taxpayer could provide the designer and printer with the specified exemption certificate based on the property's use.

What this means for you

The exemption followed the labels' actual packaging use and continued attachment to goods sold, not simply the fact that the purchaser was a food business.

Common questions

Was label design taxable? No, under the described packaging use.

Was printing taxable? No.

What documentation could the seller give its vendors? The use-based exemption certificate identified in the advisement.

Citations and references

• Fla. Stat. §§ 212.02(14)(c) and 212.05 and Fla. Admin. Code rr. 12A-1.038(5) and 12A-1.040, as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 12A-006

Original ruling text

SUMMARY

QUESTION: WHETHER OR NOT WE SHOULD HAVE OR SHOULD PAY
SALES TAXES FROM ONE OF OUR VENDORS?
ANSWER: THE DESIGN AND PRINTING OF LABELS THAT ARE PART OF
THE PACKAGING OF FOOD PRODUCTS SOLD BY TAXPAYER ARE NOT
SUBJECT TO SALES TAX.
February 9, 2012
Re:

Technical Assistance Advisement – TAA 12A-006
Sales and Use Tax – Printing of Labels for Packaging
Sections 212.02(14)(c), 212.05, Florida Statutes (F.S.)
Rules 12A-1.038(5) and 12A-1.040, Florida Administrative Code (F.A.C.)

Dear XXX:
This letter is a response to your petition dated XXX, for the Department's issuance of a
Technical Assistance Advisement ("TAA") concerning the above referenced party and
matter. Your petition has been carefully examined and the Department finds it to be in
compliance with the requisite criteria set forth in Chapter 12-11, Florida Administrative
Code. This response to your request constitutes a TAA and is issued to you under the
authority of Section 213.22, F.S.
Presented Facts and Requested Advisement
XXX. (Taxpayer) is in the business of selling various food products, such as garlic,
horseradish, garlic spreads, specialty butters, and XXX inspired sauces to suppliers such
as XXX, XXX, XXX, and XXX, who sell the products to retail stores and restaurants.
XXX (Designer) designs the labels for Taxpayer, and sends the design electronically in a
.pdf file to Taxpayer for approval. Once the design is approved by Taxpayer, Designer
sends the design to a printing company to print the labels for its products. The printing
company then ships the labels to Taxpayer to be affixed to Taxpayer’s products.
Taxpayer provided invoices from Designer showing the costs of various label designs,
and samples of label designs for its products. Taxpayer also provided invoices from
XXX (Printer), showing the charges for the printed labels. Taxpayer requests advice on
whether the design and printing of the labels are subject to sales tax.

Technical Assistance Advisement
Page 2 of 3
Discussion and Response
Sales tax is imposed on the sales price of “each item or article of tangible personal
property when sold at retail in this state ....” Section 212.05(1)(a), F.S. However,
Section 212.02(14)(c), F.S., provides that retail sales “do not include materials,
containers, labels, sacks, bags, or similar items intended to accompany a product sold to a
customer without which delivery of the product would be impracticable because of the
character of the contents and be used one time only for packaging tangible personal
property for sale ….” Rule 12A-1.040, F.A.C., clarifies Section 212.02(14)(c), F.S., and
provides the following in part:
(4) MATERIALS USED FOR FURNISHING OR SERVING FOOD
PRODUCTS OR BEVERAGES.
(a) Materials, containers, labels, sacks, bags, or similar items that accompany a
food product or drink sold to a customer and are used one time only for packaging
the food product or for the convenience of the customer are not subject to tax….

(5) LABELS, TAGS, AND INSTRUCTIONAL MATERIALS.
(a)1. Labels, tags, and name plates, including the printing of these items, are not
subject to tax when they remain affixed to tangible personal property offered for
sale or affixed to the container containing tangible personal property prepared for
shipment or delivery and:
a. Furnishes information as to the nature, quantity, maker, price, size, operation,
or maintenance of the tangible personal property for sale; or
b. Furnishes information as to the destination or the carrying instructions for the
package during shipment.
As provided by Section 212.02(14)(c), F.S., and Rule 12A-1.040, F.A.C., the design and
printing of labels that are part of the packaging of food products sold by Taxpayer are not
subject to sales tax. Taxpayer may fill out the Exemption Certificate for Exemptions
Based on the Property’s Use, as provided in Rule 12A-1.038(5)(d)1., F.A.C., and extend
a copy of the certificate to Designer and Printer in lieu of paying sales tax on its design
and purchase of the labels.
Conclusion
The design and printing of labels that are part of the packaging of food products sold by
Taxpayer are not subject to sales tax.

Technical Assistance Advisement
Page 3 of 3
This response constitutes a Technical Assistance Advisement under Section 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 Section 213.22, F.S. Our response is predicated
upon 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 from that which is 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 Section 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 10 days of the date of this letter.
Sincerely,

Angel Eason
Senior Attorney
Technical Assistance & Dispute Resolution

Record ID: 115108