How did new video, music, grocery, and pricing benefits affect tax on an online membership program?

Plain-English summary

The Florida Department of Revenue addressed several added or revised benefits in an online retailer's paid membership program.

The portion of the membership charge attributable to digital video remained subject to communications services tax when charged to a Florida service address. The newly addressed digital-music benefit was also characterized as a taxable video service for this purpose.

Separately stated shipping for the grocery benefit remained outside sales tax where the goods shipped F.O.B. origin. A member-pricing benefit did not turn the membership itself into taxable admission or membership dues; discounts allowed when tangible personal property was later sold instead reduced that property's taxable sales price.

What this means for you

Membership-program operators

One membership fee can contain components with different tax treatment, so the charge attributable to taxable digital services must be identified.

Retail tax teams

Keep shipping terms, separate statements, benefit valuations, and point-of-sale discount records.

Common questions

Q: Were the video and music portions subject to communications services tax?
A: Yes, when charged to a Florida service address.

Q: Did member pricing make the membership fee subject to sales tax?
A: No.

Q: How did the member discount affect later property sales?
A: A dealer discount allowed at the time of sale reduced the taxable sales price.

Citations and references

• Fla. Stat. §§ 202.11, 202.12, 212.02(1), and 213.22
• Fla. Admin. Code r. 12A-1.018

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 14A19-006

Original ruling text

Executive Director
Marshall Stranburg

Question: Do the amended/additional benefits for the XXXX XXXX Videos, XXXX Music,
XXXX Pantry, and XXXX Pricing change the determinations of tax applications provided in
TAA 14A-010?
Response: The amended/additional benefits of the XXXX Instant Video service do not change
the determination in TAA 14-010 that the benefit is a communications service and, specifically, a
“video service”, and the portion of the XXXX Membership charge attributable to XXXX XXXX
Video service, when charged to a Florida service address, is subject to CST.
The XXXX Music service was not addressed in the prior TAA. It is a music service and properly
characterized as a “video service” pursuant to Florida law. As such, the portion of the XXXX
Membership charge attributable to the XXXX Music service, when charged to a Florida service
address, is subject to CST.
Shipping charges related to the XXXX Pantry benefit are separately stated, and the product is
shipped F.O.B. origin. Therefore, the determination in the prior TAA that shipping charges are
not subject to sales tax does not change.
The addition of the XXXX Pricing benefit does not alter the characterization that the XXXX
Membership does not fall under s. 212.02(1), F.S. XXXX Membership charges to Florida
customers are not subject to sales tax based on the XXXX Pricing benefit. However, discounts to
the sales price allowed by the dealer at the time of sale of the tangible personal property, reduce
the taxable sales price.
December 19, 2014
RE:

Technical Assistance Advisement – TAA 14A19-006
Communications Services Tax and Sales and Use Tax
XXXX (Taxpayer)
FEI #: XXXX
Chapters 212 and 202, Florida Statutes

Dear XXXX,
This is a response to your letter dated XXXX. You have requested a Technical Assistance
Advisement (TAA) regarding the Department’s position on whether Florida Communications
Services Tax and Gross Receipts Tax (CST) and or Sales and Use Tax (sales tax) applies to certain
benefits provided to XXXX Members as part of their XXXX Membership. The information
provided with your letter established that you meet the requirements for a TAA.
Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Howard Moyer, Interim Director  Information Services – Damu Kuttikrishnan, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2
ISSUE
Do the amended/additional benefits for the XXXX Videos, XXXX Music, XXXX Pantry, and
XXXX Pricing change the determinations of tax applications provided in TAA 14A-010?
FACTS
XXXX (Taxpayer) was issued a Technical Assistance Advisement (TAA) on April 7, 2014. In
that TAA, the Taxpayer was advised on the taxability of its XXXX Memberships for Sales and
Use Tax (sales tax) and Communications Services Tax (CST). The Taxpayer provided the
following information on XXXX Membership (as quoted in pertinent part from TAA 14A-010):
Taxpayer offers a Membership program known as XXXX to the general public
for a fee. This fee is in the form of a lump sum charge. Members of the general
public may also sign up for a free, one-month trial of the Membership program.
With Membership, members receive a number of services. These services
currently include:

1. Shipping benefits on certain purchases made from the www.xxxx.com website.
   XXXX members are entitled to receive free two-day shipping on certain
   purchases. Items eligible for free shipping are marked as such on the
   www.xxxx.com website. XXXX members are also eligible for reduced shipping
   costs for items that are not otherwise XXXX eligible, that have additional
   shipping costs due to size, bulk, or other special circumstances, or on certain
   products sold by certain third-party websites.
2. Streaming video services. XXXX members are able to stream movies and
   television shows that are designated as “XXXX Videos” as many times as they
   like during the term of their Membership. These videos are viewed on the
   member's television, computer, tablet computer, or other compatible device.
   These videos cannot be downloaded or stored on devices.
3. Temporary borrowing or permanent download of certain electronic books. …
   (Emphasis added.)
   The Taxpayer was advised, quoted from TAA 14A-010, as follows:
   No portion of Taxpayer's XXXX Membership program is subject to sales and use
   tax in Florida at this time. The portion of the Membership attributable to XXXX
   Video services (or other communications services) is subject to CST. If that
   portion is not separately allocable in Taxpayer's books and records, then the entire
   XXXX Membership fee is subject to CST. The CST must be paid by members
   when they purchase XXXX Memberships. Furthermore, the CST must be paid by
   Taxpayer when it purchases XXXX Video services or other communications
   services that it offers to members in Florida as part of a free trial [Memberships].

Technical Assistance Advisement
Page 3
After the issuance of the TAA, some of the benefits provided to XXXX Members, as well as
terms and conditions, changed. The Taxpayer has provided the following information, explaining
that there have been changes to the benefits provided to XXXX Members as part of the XXXX
Membership. The Taxpayer provides the following amendments to the XXXX Membership:
XXXX Videos – Previously, as described in the Request, XXXX Members could
only stream XXXX Video content. Now XXXX Members with XXXX HD and
XXXX HDX tablets (“Specific Tablets”) can download XXXX Video content to
their device. The downloaded videos may be viewed without a wireless
connection. Thus, the XXXX Video content is the same, but XXXX Members
with Specific Tablets can download, in addition to streaming, the content.
XXXX Music – XXXX Members may listen to music designated as part of
“XXXX Music” an unlimited number of times during the course of their XXXX
Membership. XXXX Music may be played on the XXXX Member’s computer,
XXXX, or other compatible device. XXXX Music may be streamed or
downloaded for listening without a wireless connection.
XXXX Pantry – The XXXX Pantry benefit allows XXXX Members to have up to
45 pounds of heavy/bulky items delivered for a shipping fee of $5.99. The
heavy/bulky items in the XXXX Pantry are only available for purchase by XXXX
Members.
XXXX Pricing – XXXX Pricing provides discounts to XXXX Members on sales
of certain tangible personal property. Currently, XXXX Pricing is limited to
discounts on certain televisions and software, but the discounts will likely be
expanded to a broader range of tangible personal property.
(Emphasis added.)
As noted in the earlier TAA, the Taxpayer does not directly provide the additional benefits, but is
contractually obligated to ensure they are provided. The Taxpayer pays an affiliate to provide the
service related to each benefit.
The Taxpayer provided a copy of the “XXXX XXXX Terms and Conditions,” 1 updated as of
April 23, 2014. (Online this document was updated June 12, 2014.) In regards to the video
service, under the “XXXX Videos and XXXX Owners’ Lending Library” heading, the terms and
conditions document refers (and electronically links) to the “XXXX Video Terms of Use.”
Updated April 12, 2013, the XXXX Video Terms of Use provides, in part, the following:

1. THE SERVICE
   The XXXX Video service (formerly known as XXXX Video On Demand) (the
   “Service”) offers digitized versions of movies, television shows, sporting events,
   news events, and other video content (collectively, “Digital Content”) and other
   services under certain terms and conditions as set forth in this Agreement. The
   1

The Taxpayer’s online documents are quoted in all instances.

Technical Assistance Advisement
Page 4

Service allows you to access and view Digital Content in two different ways: by
streaming a copy, or by downloading a copy. As indicated on the product detail
pages of the Service, some Digital Content may be available for streaming only,
some Digital Content may be available for download only, and some Digital
Content may be available for streaming and download.

5. DIGITAL CONTENT
   a. General. The Service may allow you to: (i) rent Digital Content for viewing
   over a limited period of time ("Rental Digital Content"), (ii) purchase Digital
   Content for viewing over an indefinite period of time ("Purchased Digital
   Content"), (iii) access Digital Content on a subscription basis for viewing over a
   limited period of time during a subscription period (for example, through XXXX
   Video) ("Subscription Digital Content"), and (iv) access Digital Content on a free
   or promotional basis for viewing over a limited period of time ("Free Digital
   Content"). Digital Content may be available on the Service as Rental Digital
   Content, Purchased Digital Content, Subscription Digital Content, Free Digital
   Content, or any combination of those. The basis on which Digital Content is
   available on the Service will be indicated on the product detail page for that
   Digital Content on the Service. From time to time, we may add or remove Digital
   Content from the Service and may change the basis on which Digital Content is
   available on the Service.
   b. Usage Rules. Your use of Digital Content is subject to the XXXX Video
   Usage Rules (the "Usage Rules"). The Usage Rules provide important
   information regarding your use of Digital Content, including the time period
   during which you are authorized to view different types of Digital Content (the
   "Viewing Period" for that Digital Content) and limitations on the number and
   type of Compatible Devices on which each type of Digital Content may be
   downloaded, streamed, and viewed.
   c. Subscriptions. Our subscription services are dynamic services and the specific
   Subscription Digital Content available and amount of Subscription Digital
   Content available will generally change over time. We make no guarantee as to
   the availability of specific Subscription Digital Content or the minimum amount
   of Subscription Digital Content available in any subscription. Additional terms
   applicable to a subscription (such as the applicable cancellation and refund
   policy) will be indicated on the informational pages for that subscription.
   d. License to Digital Content. Subject to your payment of any applicable fees
   (including applicable taxes) to rent, purchase, or otherwise obtain access to
   Digital Content, and your compliance with all other terms we specify for Digital
   Content or the Service, XXXX grants you a non-exclusive, non-transferable,
   non-sublicensable, limited right and license, during the applicable Viewing
   Period, to access, view, use and display the Digital Content in accordance with
   the Usage Rules, for Non-Commercial, Private Use. …

Technical Assistance Advisement
Page 5
e. Availability of Purchased Digital Content. Purchased Digital Content will
generally continue to be available to you for download or streaming from the
Service, as applicable, but may become unavailable due to potential content
provider licensing restrictions and for other reasons, and XXXX will not be
liable to you if Purchased Digital Content becomes unavailable for further
download or streaming. You may download and store your own copy of
Purchased Digital Content on a Compatible Device authorized for such
download so that you can view that Purchased Digital Content if it becomes
unavailable for further download or streaming from the Service.
f. Downloading and Risk of Loss. If you plan to download Digital Content that
you purchase or rent, we encourage you to do so promptly after your purchase or
rental. If you are unable to complete a download after having reviewed our
online help resources, please contact XXXX customer service. Once you
purchase or rent Digital Content and we make the Digital Content available to
you, you are responsible for completing the download, if you choose to
download, and for all risk of loss of the Digital Content after download.
g. Streaming. When you stream Digital Content, the resolution and quality of
the Digital Content you receive will depend on a number of factors, including the
type of Compatible Device on which you are streaming the Digital Content and
your bandwidth, which may go up and down over the course of your viewing. …

(Emphasis added.)
The Taxpayer’s request states that it does not know whether a member downloads or streams the
service and has no way to determine which members may only stream the service.
The “XXXX XXXX Terms and Conditions” also links to the “XXXX Music Terms of Use,”
updated June 11, 2014. The Music terms of use provide, as quoted in pertinent part,
This is an agreement between you and XXXX Digital Services, Inc. (with its
affiliates, “XXXX”, “we” or “us”) regarding the Store, XXXX Music and the
Music Library Service (collectively, the “Services”). The Services allow you to
purchase and access digital versions of audio recordings, artwork and information
relating to the audio recordings, and other content (collectively, “Music
Content”), as described below. Before using the Services, please read these Terms
of Use, all rules and policies related to the Services (including any specific rules,
usage restrictions and other conditions or procedures that we post or update on or
through the Services or on XXXX.com), the XXXX.com Privacy Notice, and the
XXXX.com Conditions of Use (collectively, the “Agreement”). If you use any of
the Services, you are agreeing to the terms and conditions of the Agreement.

Technical Assistance Advisement
Page 6

1. THE SERVICES

1.2 XXXX Music. XXXX Music allows you to access certain Music Content
from our catalog (“XXXX Music Content”) on a limited basis if you (a) are
eligible for the XXXX Music benefit under the XXXX XXXX Terms &
Conditions, and (b) opt-in to XXXX Music by playing or downloading XXXX
Music Content.

3. RIGHTS AND RESTRICTIONS.
   3.1 Rights Granted. You may use the Services only for your personal, noncommercial purposes, subject to the Agreement. You may not use the Services to
   store, transfer or distribute content of or on behalf of third parties, to operate your
   own content application or service, to resell any part of the Services or for any
   form of unlawful file sharing. We grant you a non-exclusive, non-transferable
   right to use Purchased Music, XXXX Music Content, Matched Music and any
   additional Music Content we provide you access to through the Music Library
   Service only for your personal, non-commercial purposes, subject to the
   Agreement. Except as set forth in the preceding sentence, you may not
   redistribute, transmit, assign, sell, broadcast, rent, share, lend, modify, adapt, edit,
   license or otherwise transfer or use Purchased Music. We do not grant you any
   synchronization, public performance, public display, promotional use,
   commercial sale, resale, reproduction or distribution rights for Music Content you
   purchase or access through the Services. You must comply with all applicable
   copyright and other laws and with the terms of any licenses or agreements to
   which you are bound in your use of the Services and Music Content you purchase
   or access through them.
   (Emphasis added.)
   As with the XXXX Video, the member may stream or download music, and the Taxpayer states
   it does not know which a customer may do.
   XXXX members’ shipping benefits, as described in the prior TAA, included free or reduced
   shipping prices for certain products and under various conditions. The shipping benefits are
   amended for XXXX Pantry. The “XXXX XXXX Terms and Conditions” updated June 12, 2014,
   and accessed online, have a category for “Other Benefits,” with a link for information about
   additional XXXX benefits. This link provides that XXXX Pantry is,
   Access to XXXX Pantry, where members can purchase and ship to addresses in
   the contiguous U.S. low priced grocery, household, and pet care items for a flat
   delivery fee of $5.99 for each XXXX Pantry box. XXXX Pantry orders cannot be
   shipped to addresses in Alaska, Hawaii, and Puerto Rico.

Technical Assistance Advisement
Page 7
For XXXX Pantry, as explained on the Taxpayer’s website,
… Adding your first XXXX Pantry item to Cart starts a XXXX Pantry box. As
you shop, you see that each Pantry item tells you what percentage of a Pantry box
it fills based on its size and weight. Pantry boxes are large and can hold up to 45
pounds or four cubic feet of household products. As you check items off your list,
we continuously track and show you how full your box is.
XXXX Pantry allows XXXX members to shop a wider range of products,
including heavy and bulky items, all in popular pack sizes that are cost prohibitive
to ship for free. …
XXXX Pantry items are shipped F.O.B. origin, and the shipping charges are separately stated,
though an example of this was not provided.
No additional information was found or provided for the XXXX Pricing benefit other than what
was provided in the Taxpayer’s TAA request letter.
TAXPAYER POSITION
In its request for a TAA, the Taxpayer states that in the prior TAA, the Department determined
that no portion of the XXXX Membership was subject to sales tax, because it was not a taxable
membership and Florida does not currently impose sales tax on the sales of electronic books,
streaming video services, or separately stated transportations charges on items sold F.O. B.
origin. The Taxpayer opines that the amended or additional benefits do not create a taxable
membership or that the benefits are otherwise not subject to sales tax.
For XXXX Pantry, the Taxpayer states that it is a discounted shipping benefit and not a taxable
membership pursuant to s. 212.02(1), F.S. In addition, the Taxpayer states that each sale is
shipped F.O.B. origin, and shipping and handling fees are separately stated. Therefore, the
shipping charges are not subject to sales and use tax.
The Taxpayer states that XXXX Pricing is not subject to tax, because it is a discount that allows
members to purchase certain products sold by affiliates at a reduced price. Again, the Taxpayer
believes that the charge does not constitute a taxable admission or membership per s. 212.02(1),
F.S.
For XXXX Videos and Music, the Taxpayer states that benefits provide members access to (1)
movies and television shows that a member may stream or download to specific tablets, and (2)
music which a member may stream or download to a compatible device. The Taxpayer opines
that these services are not subject to sales tax.
The prior TAA did conclude that the portion of the XXXX Membership attributable to the
XXXX Videos benefit is subject to CST when charged to a Florida service address. The
Taxpayer opines that because the XXXX Video and XXXX Music services may be streamed on
any compatible devices and/or downloaded to certain devices, the service should not be subject
to CST.

Technical Assistance Advisement
Page 8
LAW AND DISCUSSION
Communications Services Tax – XXXX Video and XXXX Music Services
Chapter 202, F.S., imposes CST on the retail sale of communications services in Florida.
“Communications services” are defined, in part, as the transmission, conveyance, or routing of
voice, data, audio, video, or any other information or signals to a point or between or among
points, regardless of the medium or methods used. (See s. 202.11(1), F.S.) “Video services” are
“… the transmission of video, audio, or other programming service to a purchaser, and the
purchaser interaction, if any, required for the selection or use of a programming service …. The
term includes basic, extended, premium, pay-per-view, digital video, two-way cable, and music
services.” (Emphasis added. See s. 202.11(24), F.S.)
Communications services tax is imposed upon retail sales of communications services when the
services (1) originate and terminate in Florida, or (2) originate or terminate in Florida and are
charged to a Florida service address. (See s. 202.12(1), F.S.) A service address is, for video
services, the location where the customer receives the services in this state. (See s.
202.11(14)(b), F.S.)
CST is charged on the “sales price” of the communications service. The “sales price” of a
communications service is “… 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 service, … which is part of the sale ….” The sales price does not
include charges that are not for communications services when such charges may be reasonably
identified from the Taxpayer’s books and records kept in the regular course of business. (See s.
202.11(13), F.S.)
In the prior TAA, it was determined that the XXXX Video benefit of the XXXX Membership is
a communications service and specifically a “video service,” and, therefore, taxable, pursuant to
Florida law. The TAA advised, based on s. 202.11(13)(b)8., F.S., that the portion of the XXXX
Membership charge attributable to the XXXX Video service is subject to CST. The Taxpayer
opines that, because, in addition to streaming the digital content, the XXXX Member may now
choose to download the digital content, the service is not a communications service.
The XXXX Video service allows a XXXX Member to select and view digital video content on
compatible devices. The member may also choose to download digital video content to a
compatible device when that option is available. The member may view the content, streamed or
downloaded, as many times as it wishes as long as it has paid its XXXX Member subscription. 2
If the subscription lapses or is cancelled, the member is no longer able to view the digital video
content, even if the digital video content was downloaded. The XXXX Video benefit provided to
XXXX Members is a digital video service, which pursuant to Florida law, is a communications
service and a “video service” for CST purposes. As in the prior TAA, the portion of the XXXX
Membership charge attributable to the XXXX Video service is subject to CST when charged to a
Florida service address.

2

Subject to the XXXX XXXX Terms and Conditions and the XXXX Video and Music Terms of Use.

Technical Assistance Advisement
Page 9
The prior TAA did not address the XXXX Music service benefit. The XXXX Music service may
be played on a compatible device, such as a computer or tablet, and, like the XXXX Video
service, digital music content may be downloaded or streamed. The member may play the
content, streamed or downloaded, as many times as it wishes as long as it has paid its XXXX
Member subscription. If the subscription lapses or is cancelled, the member is no longer able to
play the digital music content, even if the digital audio content was downloaded. The
transmission or routing of audio or voice to a point, or between or amount points by any medium
or method is a communications service. The definition of “video service” provides that “[the]
term includes … music services.” The XXXX Music service benefit is a music service that falls
within the definition of a “video service” pursuant to Florida law. The entire portion of the
XXXX Membership charge attributable to the XXXX Music service is subject to CST when
charged to a Florida service address.
Communications Services Tax – XXXX Pantry and XXXX Pricing
The XXXX Pantry and XXXX Pricing benefits are not communications services and are not
subject to CST.
Sales and Use Tax – XXXX Video and XXXX Music Services
Chapter 212, F.S., imposes sales tax on retail sales in Florida of tangible personal property and
certain services. Rule 12A-1.062(5), F.A.C., clarifies that “…furnishing information by way of
electronic images which appear on the subscriber's video display screen does not constitute a sale
of tangible personal property nor does it constitute the sale of a taxable information service.”
Such sales do not constitute the sale of another taxable services. Therefore, such sales are not
subject to sales tax.
The XXXX Video service benefit is “…electronic images which appear on [a] …video display
screen…” The XXXX Music benefit is likewise not an information service for sales tax
purposes. The Taxpayer does not furnish any tangible personal property for sale or rental to the
customer for either service benefit. The XXXX Video and XXXX Music service benefits are not
sales of tangible personal property, or other taxable services, and are not subject to sales tax
under Florida law.
Sales and Use Tax – XXXX Pantry and XXXX Pricing
Pursuant to Chapter 212, F.S., generally, sales of tangible personal property in Florida are
subject to sales tax on the sales price of the property sold. The sales price includes any services
that are part of the sale. (See s. 212.02(16), F.S.) Any transportation charges, termed “shipping”
charges in the instant case, included as part of the sale are subject to sales tax. If the
transportation charges are separately stated and the tangible personal property is shipped F.O.B.
origin, then the transportation charges are not subject to sales tax. (See Rule 12A-1.045(1) – (3),
and (5), F.A.C.)

Technical Assistance Advisement
Page 10
The XXXX Pantry is a shipping benefit for XXXX Members. XXXX Members can “fill” a box
with eligible items and have it shipped for a flat rate of $5.99. 3 Some items are only available for
purchase by XXXX Members. The Taxpayer states that the XXXX Pantry items are shipped
F.O.B. origin and the shipping charges are separately stated.
In the prior TAA, the Department was not asked about and did not specifically address the
XXXX Pantry benefit. However, the TAA did address discounted shipping benefits, concluding
that because the shipping charges were separately stated and the products shipped F.O.B. origin,
the shipping charges were not subject to sales tax. The shipping charges for XXXX Pantry are
separately stated and shipped F.O.B. origin. Therefore, the shipping charges for XXXX Pantry
are not subject to sales tax.
The XXXX Pricing benefit was not addressed in the prior TAA. This benefit provides discounts
to XXXX Members on sales of certain tangible personal property, not at the time of membership,
but at the time of purchase of the tangible personal property. The XXXX Pricing benefit for
XXXX Members does not change the characterization of the XXXX Membership at the time the
membership is purchased. In the prior TAA, the Department provided,
As a general matter, XXXX Memberships do not fall under the provisions in s.
212.02(1), F.S., relating to Membership dues. That provision is specifically
applicable to membership benefits to “a place of amusement, sport, or recreation”
or that provide “recreational or physical fitness facilities” which the XXXX
Membership does not.
Therefore, XXXX Membership charges to Florida customers are not subject to sales tax based on
the XXXX Pricing benefit.
When a XXXX Member purchases tangible personal property to which the XXXX Pricing
benefit applies, the discount would apply to the sales price of the tangible personal property at
the time of sale. As the discount is a cash discount provided by the dealer at the time of sale, the
discount would be deducted from the taxable sales price. (See Rule 12A-1.018, F.A.C.)
CONCLUSION
The amended/additional benefits of the XXXX Video service do not change the determination in
TAA 14-010 that the benefit is a communications service and, specifically, a “video service” and
the portion of the XXXX Membership charge attributable to XXXX Video service, when
charged to a Florida service address, is subject to CST.
The XXXX Music service was not addressed in the prior TAA. It is a music service and properly
characterized as a “video service” pursuant to Florida law. As such, the portion of the XXXX
Membership charge attributable to the XXXX Music service, when charged to a Florida service
address, is subject to CST.

3

See http://www.xxxx.com/gp/help/customer/display.html?nodeId=201505420. XXXX provides that the XXXX
Pantry order may be packed in extra boxes to ensure that items arrive intact, but without additional shipping costs.

Technical Assistance Advisement
Page 11
Shipping charges related to the XXXX Pantry benefit are separately stated, and the product is
shipped F.O.B. origin. Therefore, the determination in the prior TAA that shipping charges are
not subject to sales tax does not change.
The addition of the XXXX Pricing benefit does not alter the characterization that the XXXX
Membership does not fall under s. 212.02(1), F.S. XXXX Membership charges to Florida
customers are not subject to sales tax based on the XXXX Pricing benefit. However, discounts to
the sales price allowed by the dealer at the time of sale of the tangible personal property, reduces
the taxable sales price.
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.
Should you have any questions, please feel free to contact me.
Sincerely,

Carla M. Bruce
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 717-6315
Record ID: 180559