How does Florida's $5,000 discretionary sales surtax limitation apply when one invoice sells several quantities of different tree types?

Plain-English summary

The Florida Department of Revenue applied the $5,000 discretionary sales surtax limitation separately to each type of tree sold in bulk on one invoice. The invoice listed eight trees of one type for $14,400, seven of a second type for $2,975, and six of a third type for $1,111.50.

The transaction met the single-sale test because the invoice specified quantities and delivery records showed all items were delivered together. It also met the bulk-sale test because each line contained multiple quantities of one item normally sold in bulk.

The surtax cap applied to only the $14,400 tree-type line. The other two lines were fully subject to the local surtax because each type's total was below $5,000. The Department calculated total tax of $1,200.06 using the 6% state rate and 1% surtax shown in the historical example.

What this means for you

Nurseries and landscape suppliers

Do not apply the $5,000 cap to an invoice's combined total when it contains different item types. Analyze each qualifying bulk item separately.

Billing teams

Invoices and delivery records should identify item type, quantity, and timing. Those documents supported the single-sale finding here.

Accountants and tax professionals

The tax rates in this 2018 example are historical. The lasting method is to test the transaction first as a single sale and then determine whether each group is a bulk item or working unit.

Common questions

Q: Did the whole invoice receive one $5,000 cap?
A: No. The Department applied the limitation separately to each tree type.

Q: Why did the $14,400 line qualify?
A: It was one bulk item consisting of multiple quantities of the same tree type and exceeded $5,000.

Q: Why were the other lines fully surtaxed?
A: Each tree type's total sales amount was below $5,000.

Q: Did delivery on one truck matter?
A: The shared delivery and invoice supported the single-sale test, but different tree types still remained separate bulk items for applying the cap.

Citations and references

• Fla. Stat. §§ 212.054(2), 212.055, and 213.22
• Fla. Admin. Code r. 12A-15.004

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 18A-018

Original ruling text

QUESTION:
How should the $5,000.00 discretionary sales surtax be calculated for the invoice submitted for
review.
ANSWER:
The invoice submitted for review constitutes the sale of three single items sold in bulk. The
$5,000 surtax limitation applies to the sale of multiple quantities of Item A. The sales amount
of the quantity sold of Item A exceeds $5,000.00. The $5,000.00 surtax limitation does not
apply to the sale of multiple quantities of Item B or Item C, as the total sales amount for each of
these items is less than $5,000.00.

November 27, 2018,
XX
Subject: Technical Assistance Advisement 18A-018
STATUTE CITE(S): Sections 212.054 and 212.055, Florida Statutes (F.S.)
RULE CITE: Rule 12A-15.004, Florida Administrative Code (F.A.C.)
XXXXXXX
XXX
Dear XX:
This is in response to your letter dated June 12, 2017, requesting this Department’s issuance of
a Technical Assistance Advisement (“TAA”) pursuant to section 213.22, F.S., and Rule Chapter
12-11, F.A.C. An examination of your letter and supporting documentation has established you
have complied with the statutory and regulatory requirements for issuance of a TAA.
Therefore, the Department is hereby granting your request for a TAA.
Facts and Requested Advisement
Your letter provides the following in part:
Please accept this letter and the accompanying Schedules as a formal request for
Technical Assistance Advisement. . . .

XXX
November 27, 2018
Florida Department of Revenue
Page 2

The matter in question is the rule on extending the tax break to a customer who is
invoiced for two different species of trees on the same invoice totaling over $5,000.
Further, the trees are being delivered on one truck and to one location.

In response to the Department’s request for additional supporting documentation your
provided the following on October 17, 2018:
•
•
•

A copy of Invoice #XX, dated January 9, 2017
Copies of 2 “Driver’s Checklists” dated January 10, 2017, and
A copy of check # XX, in the amount of $21,665.56, dated February 3, 2017.

Invoice #XX reflects the following:
Description

Quantity

Rate

Amount

XX

8

1,800.00

14,400.00

XX

7

425.00

2,975.00

XX

6

185.25

1,111.50

Subtotal

18,486.50

Independent Hauler

880.00

880.00

Independent Hauler

770.00

780.00

Subtotal

$20,146.50

Sales Tax (7%) $1,294.06
Total

$21,440.56

You request a TAA that addresses “the correct procedure of calculating state sales tax as it
relates” to the discretionary surtax limit on sales of XX that exceed $5,000.00.
Law and Discussion
Section 212.055, F.S., authorizes the counties of Florida to levy various types of local option
taxes, including a discretionary sales surtax. Section 212.054(2)(a), F.S., provides that the
discretionary surtax is imposed on “all transactions occurring in the county which transactions
are subject to the state tax imposed on sales, use, services, rentals, admissions, and other

XXX
November 27, 2018
Florida Department of Revenue
Page 3

transactions.” The basic principle in applying discretionary surtax is that it piggybacks the state
sales and use tax. If a transaction is subject to sales tax and occurs at a location where surtax is
imposed, the surtax also applies.
Section 212.054(2)(b)1., F.S., provides that the sales amount above $5,000 on any item of
tangible personal property shall not be subject to the surtax. If two or more taxable items of
tangible personal property are sold to the same purchaser at the same time, then the two items
may qualify, under certain conditions, as a single sale of an item of tangible personal property
for purposes of the limitation.
The Department's interpretation of the limitation is provided in Rule 12A-15.004, F.A.C. In
order for the exception to apply, two tests must be satisfied. There must be a single sale in
which one purchaser buys all the items at the same time, with a purchase order or other
documentary evidence that there has been such a single transaction. Second, the multiple
items reflected on that documentation will be aggregated for purposes of applying the $5,000
limitation only if they fall into one of two categories. They must either be items that are
normally sold in bulk, or they must be items that will be assembled into a working unit or a part
of one.
I. Single Sale Test
All items sold to one purchaser at one time can meet the single sale test. There must be
tangible evidence of the sale, such as an invoice, sales slip, charge ticket, written purchase
order or agreement that specifies both a quantity certain of materials and a time certain by
which all the materials will be delivered (when multiple deliveries are made, and multiple
invoices are issued) in order to qualify as a single sale. This applies to all items purchased
pursuant to a single written contract or purchase order, when the written contract or purchase
order specifies a quantity certain of items being sold and a time certain by which the items
must be delivered. When the written contract or purchase order specifies the quantity and the
delivery date, the single sale test is met regardless how many deliveries are made or invoices
are issued. If the quantities and/or delivery time frame are not specified, then each
delivery/invoice constitutes a single sale.
In this case, invoice # XX lists 3 different types of XX . . . . The invoice lists a specific quantity of
each [item]. The invoice does not specify a delivery date. However, the Driver’s Checklists
confirm that delivery of all [items] occurred at the same time. Therefore, the single sales test
has been met.
II. Bulk Sale/Working Unit Test
Multiple items meeting the single sale test may not necessarily qualify for the $5,000,
discretionary sales surtax limitation. They must also meet the bulk sale/working unit test. Rule

XXX
November 27, 2018
Florida Department of Revenue
Page 4

12A-15.004(3)(b), F.A.C., provides that in order to meet this test, the single sale of multiple
items of tangible personal property must meet one of the following conditions:

1. The items are multiple quantities of a single item that the dealer normally sells in
   multiple quantities in the normal course of the dealer's business or that the purchaser
   normally buys in multiple quantities in the normal course of the purchaser's business;
2. The items are normally sold as a set or a unit and the utility of each for its intended
   purposes is dependent on the set being complete;
3. The items are normally sold in single sale by the seller to the purchaser for use in the
   normal business practice of the purchaser as an integrated unit; or
4. The items are component parts that have no utility unless assembled with each other
   to form a working unit or part of a working unit.
   In this case, the Taxpayer sold multiple quantities of three separate types of [items]. The surtax
   limitation should be applied to each tree type line item, as each type of tree constitutes the sale
   of a “single item,” as described in Rule 12A-15.004(3)(b)1., F.A.C.
   Conclusion
   Review of invoice #XX, and the supporting documentation provided, confirms that both the
   single sale test and the bulk sale test requirements were met. Invoice #XX constitutes the sale
   of three single items sold in bulk. The $5,000 surtax limitation applies to the sale of the 8 XX.
   The sales amount of the eight XX exceeds $5,000.00. The $5,000.00 surtax limitation does not
   apply to the sale of the [other items], as the total sales amount for each of these [items] is less
   than $5,000.00.
   “[T]he correct procedure of calculating state sales tax as it relates” to the discretionary surtax
   limit for the three types of trees sold on invoice #XX is as follows:
   Tree Type and Quantity

Subtotal Tax Calculation:

8 XX

14,400.00

x 6% ($864.00) + 1% surtax x $5,000 ($50.00) = $ 914.00

7 XX

2,975.00

x 7% ($208.25)

= $ 208.25

6 XX

1,111.50

x 7% ($77.81)

= $ 77.81
Total Tax Due

=$1,200.06

XXX
November 27, 2018
Florida Department of Revenue
Page 5

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 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 that
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 15 days of the date of this letter.

Sincerely,

Brinton Hevey
Tax Law Specialist
Technical Assistance and Dispute Resolution
Record ID: 119461