Were a vehicle-retail integration provider's separately stated electronic credit-reporting charges subject to Florida sales tax?

Plain-English summary

The Florida Department of Revenue concluded that this vehicle-retail integration provider's separately stated monthly charges for credit-reporting services were not subject to Florida sales tax.

The provider's customer requested a prospective buyer's credit check. The provider coordinated the check through another service provider or directly with a major credit-reporting agency, and the resulting credit findings were delivered electronically. The provider separately stated the charge on its regular invoices.

The Department found the service nontaxable under the rule for freestanding or separately stated credit reports. It also found that electronically furnished information was not tangible personal property or a taxable information service.

What this means for you

Vehicle-retail technology providers

Using a third party to coordinate a credit check did not change this result. The visible facts still showed a separately stated credit-reporting service delivered electronically.

Credit-reporting businesses

Invoice presentation mattered. The Department relied on the fact that the monthly credit-reporting charges were separately stated.

Accountants and tax professionals

Confirm both the service category and delivery method. This ruling did not address a bundled charge whose credit-reporting component was not separately identified.

Common questions

Q: Did the provider always deal directly with a credit-reporting agency?
A: No. It sometimes worked through another service provider.

Q: How were the findings delivered?
A: Electronically.

Q: Were the separately stated monthly charges taxable?
A: No.

Citations and references

• Fla. Stat. §§ 212.02(19), 212.05(1)(i)1., 212.055, and 213.22
• Fla. Admin. Code rr. 12A-1.0092(2)(c)1. and 12A-1.062(5)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 17A-008

Original ruling text

Executive
Director
Leon M. Biegalski

QUESTION: ARE TAXPAYER’S CHARGES TO ITS CUSTOMERS FOR CREDIT REPORTING
SERVICES SUBJECT TO FLORIDA SALES AND USE TAX?
ANSWER: TAXPAYER’S SEPARATELY STATED MONTHLY CHARGES, TO ITS CUSTOMERS,
FOR CREDIT REPORTING SERVICES, ARE NOT SUBJECT TO TAX UNDER THE PROVISIONS
OF S. 212.05(1)(I)1., F.S., AND RULE 12A-1.0092(2)(C)1., F.A.C.
TAXPAYER’S SEPARATELY STATED MONTHLY CHARGES, TO ITS CUSTOMERS, FOR
CREDIT REPORTING SERVICES, WHICH ARE PROVIDED ELECTRONICALLY TO
CUSTOMERS, ARE NOT SUBJECT TO SALES TAX UNDER THE PROVISIONS OF RULE 12A1.062(5), F.A.C.
March 3, 2017
Re:

Technical Assistance Advisement 17A-008
XXXX (“Taxpayer”)
Florida Sales and Use Tax
Credit Reporting Services
Sections 212.02(19), 212.05, 212.055, Florida Statute (F.S.)
Rules 12A-1.0092(2)(c)1., 12A-1.062(5), Florida Administrative Code (F.A.C.)
BP#: XXXX

Dear XXXX:
This letter is in response to your request dated XXXX, and received in this office on XXXX, for issuance
of a Technical Assistance Advisement (“TAA”) pursuant to Section 213.22, F.S., and Rule Chapter 12-11,
F.A.C., concerning the taxability of credit reporting services. An examination of your request has
established you complied with the statutory and regulatory requirements for issuance of a TAA.
Therefore, the Department is hereby granting your request for a TAA.
FACTS PRESENTED
Taxpayer is registered as a Florida sales and use tax dealer. It delivers integration and related services to
all dealer system providers and finance sources that serve automobile and truck retailers, power sports and
recreational vehicles. Among the services Taxpayer provides to its customers are credit reporting
services. These services are provided electronically. Taxpayer currently collects and remits sales tax on
its customers’ purchases of credit reporting services. Generally, a credit reporting service transaction
follows the below workflow:
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

www.floridarevenue.com
Florida Department of Revenue
Tallahassee, Florida 32399-0100

TAA
Page 2

1. Taxpayer’s customer requests a credit check for a potential buyer seeking financing for a vehicle
   purchase.
2. Taxpayer works with a third-party to coordinate the credit check service, or directly with one of
   the three largest credit reporting agencies, to finalize the credit report for each request that is
   submitted by Taxpayer’s customer.
3. The credit findings are transmitted to Taxpayer’s customer electronically.
4. Taxpayer documents all requests and invoices its customers on a regular basis (generally monthly).
   The credit reporting services are separately stated on each invoice.
5. Taxpayer charges and collects Florida sales tax on its invoices for credit reporting services. This
   tax is remitted on its monthly Florida sales and use tax returns.
   REQUESTED ADVISEMENT
   Are Taxpayer’s charges to its customers for credit reporting services subject to Florida sales and use tax?
   APPLICABLE LAW
   Unless a specific exemption applies, s. 212.05, F.S., provides it is the legislative intent that every person is
   exercising a taxable privilege that engages in the business of selling or repairing tangible personal
   property1 in this state. For exercising such a privilege, a tax is levied on each taxable transaction or
   incident. The tax is due and payable at the rate of 6 percent, plus any applicable surtaxes imposed under s.
   212.055, F.S., on the total consideration received for each item or article of tangible personal property
   when sold at retail or repaired in this state. Exemptions from tax are strictly construed against the
   claimant. Wanda Marine Corp. v. Dep’t of Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA 1975).
   Detective, Burglar Protection, and Other Protection Services
   Section 212.05(1)(i)1., F.S., provides that detective, burglar protection, and other protection services
   classified under NAICS2 National Numbers 561611, 561612, 561613, and 561621, are subject to sales tax.
   However, Rule 12A-1.0092(2)(c)1., F.A.C., explicitly provides that credit reporting services, when
   performed by detectives, private investigators, or others are not subject to tax when freestanding, or when
   separately stated on an invoice given to a purchaser which includes taxable services.
   As specified and referenced above, Taxpayer’s separately stated monthly charges, to its customers, for
   credit reporting services are not subject to tax under the provisions of s. 212.05(1)(i)1., F.S., and Rule
   12A-1.0092(2)(c)1., F.A.C.

1

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.
2
"NAICS" means those classifications contained in the North American Industry Classification System, as published in 2007
by the Office of Management and Budget, Executive Office of the President.

TAA
Page 3

Information Services
Rule 12A-1.062(5), F.A.C., specifically provides that the charge for 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.
As specified and referenced above, Taxpayer’s separately stated monthly charges, to its customers, for
credit reporting services, which are provided electronically to customers, are not subject to sales tax under
the provisions of Rule 12A-1.062(5), F.A.C.
For more information concerning all of the taxes administered by the Department of Revenue, please refer
to the Department’s Internet site at:
www.floridarevenue.com
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 and 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.
Kind Regards,

Alan R. Fulton
Tax Law Specialist
Technical Assistance & Dispute Resolution
850-717-6735
ARF\tadrstaff
Record ID: 212447