Was postage taxable when a seller charged one non-itemized price for an envelope with preprinted postage?

Plain-English summary

The Florida Department of Revenue concluded that postage was not taxable when a seller charged inmates one non-itemized price for an envelope with preprinted postage, provided the seller kept accounting records that substantially proved the separate costs.

The envelope itself remained taxable tangible personal property. In the ruling's example, a $0.62 combined charge included $0.49 of postage, so sales tax applied to the remaining $0.13 envelope charge.

What this means for you

Sellers of postage-paid items

Separately stating postage is the clearest route, but this ruling also accepted reliable accounting records that separated postage from the taxable item.

Accountants and tax professionals

Retain cost records supporting both components of any non-itemized postage-and-envelope charge.

Common questions

Q: Was the postage portion taxable?
A: No, with sufficient supporting records.

Q: Was the envelope portion taxable?
A: Yes.

Citations and references

• Fla. Stat. §§ 212.02(19), 212.05, 212.054, 212.055, and 213.22
• Fla. Admin. Code r. 12A-1.027(2)(b)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 15A-005

Original ruling text

Executive
Director
Marshall Stranburg

QUESTION: WHETHER A SALE OF POSTAGE AND AN ENVELOPE, AS A SINGLE
ITEM IN A SINGLE NON-ITEMIZED TRANSACTION, IS SUBJECT TO TAX?
ANSWER: TAX IS NOT DUE ON THE POSTAGE IF TAXPAYER MAINTAINS
SUFFICIENT ACCOUNTING RECORDS PROVIDING SUBSTANTIAL EVIDENCE OF
THE COSTS OF THE POSTAGE AND ENVELOPE.
May 19, 2015
Re:

Technical Assistance Advisement 15A-005
Florida Sales and Use Tax
Postage/Envelope Tax Implications
Section 212.05, Florida Statutes (“F.S.”)
Rule 12A-1.027, Florida Administrative Code (“F.A.C.”)

Dear XXXX:
This letter is a response to your petition received on XXXX, for the Department of Revenue’s
(“Department”) issuance of a Technical Assistance Advisement ("TAA") concerning the abovereferenced petitioner 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, F.A.C. This
response to your request constitutes a TAA and is issued to you under the authority of Section
(“s.”) 213.22, F.S.
FACTS PRESENTED
The following facts are based on documents and statements provided by Taxpayer.
Taxpayer has contracted with the State to sell various items in correctional institutions (“CI”)
around the State. One of the items sold to the inmates at the CI are envelopes with postage preprinted. As part of the contract with the State, Taxpayer is informed what rates shall be charged
for various items via a pricing schedule, which may only be updated with the express written
permission of the State. This pricing schedule specifically itemizes the charge for the postage
and the charge for the envelope.

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Sue Harlan, Interim Director  Information Services – Damu Kuttikrishnan, Director

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

Technical Assistance Advisement
Page 2
Taxpayer purchases the envelopes and pre-printed postage directly from the United States Postal
Service (“USPS”). According to Taxpayer, the USPS does not charge sales tax to Taxpayer on
this transaction. The USPS calls the transaction “postage.” Through the CI commissary,
Taxpayer sells the envelope and pre-printed postage, which it identifies on receipts as a single
item (e.g., “stamp/envelope”), directly to the inmates of the CI, while charging sales tax on the
total charge of a typically multi-item transaction. Taxpayer provided an invoice as an example.
Relevant to our discussion is the line: “(qty) 2 … stamp/envelope … (price) $0.62 … (amount)
$1.24”.
REQUESTED ADVISEMENTS
Taxpayer inquires as to whether the transaction with the inmates is subject to tax.
LAW & DISCUSSION
Generally, Section 212.05, F.S., provides every person is engaged in a taxable privilege when
engaging in the business of selling, at retail, tangible personal property. In order to exercise such
a privilege, tax is levied at a rate of six percent (6%).1 See s. 212.05(1)(a)1.a., F.S. Tangible
personal property is “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.
Charges for postage that are separately stated on a customer’s invoice, bill, or other tangible
evidence of sale are not subject to Florida Sales Tax. See Rule 12A-1.027(2)(b), F.A.C. The
Department takes the position that when an envelope with pre-printed postage is sold to a
customer and the charges for the postage and envelope are not separately stated on the sales
invoice, sales tax is not due on the postage, so long as the seller keeps sufficient accounting
records providing substantial evidence of the costs of both the envelope and postage. In the
example provided, sales tax would be due on the $0.13 charge for the envelope ($0.62 total
charge minus the current $0.49 postage charge).
CONCLUSION
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.

1

On the sale of tangible personal property, counties are authorized to impose a county discretionary sales surtax.
See ss. 212.054 and 212.055, F.S.

Technical Assistance Advisement
Page 3
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 10 days of the date of this letter.
Sincerely,

David J. Brennan, Jr., Esq.
Senior Attorney
Technical Assistance & Dispute Resolution
Record ID:

194075