Was an online platform a Florida marketplace provider when dealers invoiced customers and collected payment without the platform handling transaction funds?

Plain-English summary

Florida held that an online vehicle-parts platform was a marketplace, but not a marketplace provider, on its described payment flow.

Participating dealers advertised parts inventory through the platform. Customers could place orders, but the dealer filled the order, invoiced the customer, and collected payment directly. When financing was used, a financial-services company paid the dealer for the receivable and later collected from the customer. The platform itself received a periodic commission but did not collect transaction payments and pass them to dealers.

Fla. Stat. Sec. 212.05965(1)(b) required both facilitation through listing or advertising and the collection and transmission of customer payment. Because the second element was missing, the platform was not a marketplace provider under the stated facts.

What this means for you

Online marketplaces

Listing products and earning a commission did not alone create marketplace-provider status. The Department focused on whether the platform directly or indirectly collected and transmitted customer payments.

Dealers using third-party platforms

The participating dealers remained the sellers that invoiced customers and collected payment on the described transactions.

Common questions

Did the platform operate a marketplace? Yes. It provided an electronic medium through which tangible personal property was offered for sale.

Why was it not a marketplace provider? It never collected customer payments and transmitted all or part of them to the dealers.

Did dealer financing change the answer? No. The finance company paid for the dealer's receivable and collected separately from the customer; it did not collect and transmit the purchaser's payment to the dealer as described by the statute.

Citations and references

• Fla. Stat. Sec. 212.05965(1)(a)-(b)
• Fla. Stat. Sec. 212.0596
• Fla. Stat. Sec. 212.06
• Fla. Stat. Sec. 212.18(3)(a)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 22A-012

Original ruling text

QUESTION:
Is Taxpayer a “marketplace provider,” as defined by s. 212.05965(1)(b), F.S.
ANSWER:
Taxpayer is not a “marketplace provider,” as defined by s. 212.05965(1)(b), F.S.
Taxpayer facilitates retail sales by advertising participating dealer’s inventory of vehicle parts on
Taxpayer’s online platform. However, based on the information provided regarding the transactions
between the dealers and purchasers, there are no cases where the Taxpayer “collects payment from the
[customer] and transmits all or part of the payment to the [dealer].” The purchaser pays the dealer
directly for the purchase. In cases where the purchase is financed by the financial services company, the
dealer is paid by the financial services company and the purchaser makes payment directly to the
financial services finance company. At no time, does the financial services company collect and transmit
all or part of the purchaser’s payment to the dealer.
June 16, 2022
XX
Re:

Technical Assistance Advisement No. 22A-012
Sales and Use Tax - Marketplace Provider
XX
BPN: XX
Sections 212.0596, 212.05965, 212.06, and 212.18 Florida Statutes (“F.S.”)

Dear XX:
This letter is a response to your petition on behalf of [Taxpayer], dated February 28, 2022, for the Florida
Department of Revenue’s (the “Department’s”) issuance of a Technical Assistance Advisement ("TAA")
with regard to whether your client would be considered a marketplace provider under Florida law. 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 s. 213.22, F.S.
Requested Advisement
You request a determination whether Taxpayer is a “marketplace provider,” as defined by s.
212.05965(1)(b), F.S.
Facts
Your letter dated, February 28, 2022, provides the following in part:
[Taxpayer] is an affiliate of certain companies that manufacture and distribute commercial
vehicles and related aftermarket parts (known as original equipment manufacturers or “OEMs”).
The OEMs sell the vehicles and parts to their network of independent dealers located across the

Technical Assistance Advisement
June 16, 2022
Florida Department of Revenue
Page 2

United States, and the dealers in turn resell these and other products to their customers. The
dealers operate substantial “brick and mortar” businesses within their assigned territories (similar
to automobile dealerships) and have an established history of collecting and remitting applicable
sales and use taxes on their taxable retail sales and maintaining exemption certificates for their
exempt sales. The OEMs currently have X authorized dealer groups located in Florida that operate
XX sales and service outlets in the state.
[Taxpayer] has created an online platform . . . to enable participating dealers to list their inventory
of vehicle parts on the Internet and make business-to-business (“B2B”) sales to select customers.
Taxpayer owns and administers the electronic infrastructure of the platform and provides the
necessary support to the dealers to enable them to connect to the platform. At this point, the
platform is in the process of being rolled out and is being utilized by a limited number of dealers,
none of which are based in Florida. The dealers are required to sign a contractual agreement to
use the platform. Taxpayer receives a commission equal to an agreed percentage of the dealers’
sales made through the platform, which is billed monthly or quarterly in arrears (i.e., Taxpayer
does not collect customer payments and deduct the percentage from individual transactions as
they occur).
[The online platform] is not open to the general public. The website can be accessed only by
qualified customers with log-on credentials. To receive log-on credentials, a customer must
request an invitation from its local dealer(s). Alternatively, dealers may automatically create
accounts for their established customers and send the log-on credentials to them. The customers
include both taxable end-users of parts, and others that are purchasing parts for resale or other
exempt purposes, such as repair shops. . . .
Once logged-on to the site, customers may view and order inventory only from the specific
dealer(s) that invited them and with whom they generally have a pre-existing relationship.
Dealers send the pricing and availability of their parts inventory to [the online platform]
electronically via their Dealer Management System (“DMS”). [A DMS is a commercially available
software suite used by automobile, truck and other vehicle and equipment dealerships to manage
and administer their sales, service, and financing operations.] All inventory items and all
transactions on the platform are clearly identified as inventory and transactions of the dealer, not
Taxpayer. Taxpayer does not store or hold any dealer inventory or perform any order fulfillment
functions.
When a customer identifies a part on the platform that it wants to purchase, it will add the item
to its order. The customer must then select a delivery and payment method to place the order.
The customer generally has three delivery options: (1) pick up the purchased item at one of the
dealer’s physical locations, (2) request that the dealer deliver the item, or (3) request that the
dealer ship the item. The above-mentioned contracts between Taxpayer and the dealers
expressly prohibit dealers from making sales over the platform into jurisdictions where they are
not registered for sales and use tax purposes.

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June 16, 2022
Florida Department of Revenue
Page 3

. . . All customers that use the platform to place orders will thus need to pay via dealer accounts.
A “dealer account” is a pre-existing credit line that the customer establishes with the dealer
directly. Under this payment method, [the online platform] “pings” the dealer’s DMS and the
DMS will send back an initial order approval or rejection. If approved, [the online platform]
forwards the order to the dealer’s DMS and provides an order confirmation to the customer. At
this point, [the online platform] is no longer involved in the transaction and the remaining
activities follow the same process used for the dealer’s other sales that occur outside the
platform. That is, the dealer will proceed to fill the order, generate an invoice from its DMS with
applicable state and local tax, and send the invoice directly to the customer. The dealer remits
any tax charged on the invoice directly to the appropriate tax authorities. The dealer then collects
the customer account balance directly from the customer according to their agreed payment
terms (e.g., net 30), and the dealer bears the risk of customer default.
In certain situations, a vehicle fleet customer that chooses to pay on account may also have a
credit line established with a financial services company that is an affiliate of [Taxpayer]. In these
cases, the dealer submits the above-mentioned customer invoice to [the financial services
company] for immediate reimbursement. [The financial services company] verifies the invoice
and reimburses the dealer directly for the invoice amount (generally within two days of invoice
submission), including any sales and use tax charged on the invoice, less a fixed percentage that
[the financial services company] retains as a discount fee. As in the dealer account situation
above, the dealer remits any tax charged on the invoice directly to the appropriate tax authorities.
[The financial services company] collects the customer receivable according to its payment terms
with the customer, and [the financial services company] bears the risk of customer default.
Importantly, the reimbursement from [the financial services company] to the dealer occurs
entirely outside of [the online platform] after the sale is completed (i.e., after the dealer fulfills
the order and generates the invoice from its DMS).
[The online platform] maintains the customer’s order history on the website but does [not]
maintain the actual dealer invoices, as dealers do not provide their invoices to [Taxpayer] via the
platform or otherwise. [Taxpayer] thus has no visibility as to the specific types and amounts of
state and local tax charged on the invoices. Customers may cancel an order for a part placed
through [the online platform] but may not modify an order. If a customer wants to return or
exchange an item purchased through [the online platform], it must contact the dealer directly.
The dealer will handle the physical return and refund directly with the customer according to its
normal return process (i.e., entirely outside of [the online] platform). The customer must also
contact the dealer directly for any other customer service inquiries.

Along with the request for advisement, you included a copy of [the online platform] Agreement that
“dealers are required to sign . . . to use the platform” (the Agreement). The Agreement provides the
following in part:

Technical Assistance Advisement
June 16, 2022
Florida Department of Revenue
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This Agreement governs Your access to and use of and sales made through Provider’s . . . website
....

7. End Users.
   (a) Responsibility for End Users.
   You are responsible for the activities of all Your End Users, including Orders they may place and
   how End Users use Your Information.

(d) End User Agreements.
You will enter into binding and enforceable agreements with each End User including terms of
use, terms of sale and privacy policies (collectively the “End User Agreements”) that govern such
End Users’ access to and use of the Platform and any content contained therein. . . .

11. Taxes
    (a) Your Responsibilities.
    You are the seller of record with respect to all of Your sales made through the Platform. You are
    solely responsible for determining, charging and collecting the correct amount of Taxes with
    respect to such sales and, except as set forth in Section 11(c)(iii) below, You are solely responsible
    for reporting and remitting such Taxes to the appropriate taxing authorities, in each case in
    accordance with all applicable laws. Without limiting the generality of the foregoing, You are
    solely responsible for complying with all applicable laws related to Tax-exempt transactions,
    including, without limitation, obtaining and maintaining valid Tax exemption certificates from End
    Users. You are also solely responsible for processing any refunds of Taxes with respect to Your
    sales and otherwise repaying any over-collected Taxes to End Users. You acknowledge and agree
    that Provider takes no responsibility for any of the foregoing activities and has no obligation or
    liability to You, or to any taxing authority, End User or other person, for any Taxes arising out of
    or related to Your sales made through the Platform.
    (b) Registrations.
    You represent, warrant and agree, now and throughout the Term, that You are and will be
    registered to collect and remit Taxes in all jurisdictions in which you are required by applicable
    law to be so registered in connection with Your sales made through the Platform. Exhibit D
    contains a list of all such jurisdictions in which You are currently registered. You agree to promptly
    notify Provider in writing of any changes to such list. You also agree not to (i) ship or deliver any
    parts sold through the Platform to an End User that is located within any jurisdiction in which You
    are not registered to collect and remit Taxes or (ii) make any other sales through the Platform
    that are subject to Tax in such a jurisdiction.
    (c) Marketplace Facilitator Jurisdictions.

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June 16, 2022
Florida Department of Revenue
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(i) Some jurisdictions have laws that may permit or require Provider to report and remit Taxes as
a “marketplace facilitator” or “marketplace provider” with respect to certain of Your sales made
through the Platform. Provider shall determine in its sole discretion whether it is considered a
marketplace facilitator or marketplace provider in each applicable jurisdiction and whether any
related exemption or waiver applies. You agree to cooperate with Provider in claiming or
requesting any such exemption or waiver.
(ii) To the extent that the law of any jurisdiction . . . allows a marketplace facilitator or marketplace
provider and a marketplace seller to enter into an agreement with each other regarding the
collection, reporting and remittance of Taxes in such jurisdiction, the Parties hereby agree that
You will be solely responsible for collecting, reporting and remitting all applicable Taxes on Your
sales made through the Platform in such jurisdiction in accordance with Section 11(a) above.
(iii) In the event that Provider notifies You in writing that Provider will report and remit Taxes as
a marketplace facilitator or marketplace provider in a specified jurisdiction, You agree to
cooperate with Provider in connection therewith. You acknowledge and agree that Provider will
not collect any Taxes from any End Users with respect to Your sales made through the Platform
in such jurisdiction. You will remain solely responsible for determining, charging and collecting all
applicable Taxes on such sales in accordance with Section 11(a) above. You agree to promptly
transfer such Taxes to Provider, together with all sales and other information necessary for
Provider to accurately report and remit such Taxes, in such form and manner as Provider may
reasonably request. Provider will report and remit the same to the appropriate taxing authority
as a marketplace facilitator or marketplace provider.
(iv) Notwithstanding anything to the contrary contained in this Agreement, Provider reserves the
right in its sole discretion to prohibit sales through the Platform in any jurisdiction if such sales
might cause Provider to be considered a marketplace facilitator or marketplace provider in such
jurisdiction. Provider will notify You in writing of any such jurisdictions where sales are prohibited,
and You agree to comply with such prohibition.
(d) Record Retention and Cooperation.
(i) You agree to maintain appropriate books and records (including, without limitation, general
ledgers, sales journals, invoices and credit memos, Tax returns, Tax payment records, and Tax
exemption certificates) and any other documentation reasonably necessary to prove the validity
and payment of all Taxes that were determined, charged, collected, reported, remitted and/or
refunded by You, and all Tax exemptions that were applied by You, with respect to Your sales
made through the Platform. . . .

(q) Exhibits
The following Exhibits are attached hereto and incorporated herein by this reference:
Exhibit "A": Order Form

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June 16, 2022
Florida Department of Revenue
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1. Platform Description: A web-based e-commerce solution designed to facilitate business to endcustomer transactions between You and End Users.

Applicable Law and Discussion
Section 212.18(3)(a), F.S., requires that any person desiring to engage in or conduct business in Florida as
a dealer must file for a certificate of registration with the Department of Revenue. Section 212.06(3)(a),
F.S., provides that ". . . every dealer making sales, whether within or outside the state, of tangible personal
property for distribution, storage, or use or other consumption, in this state, shall, at the time of making
sales, collect the tax imposed by this chapter from the purchaser." Section 212.06(2)(c), F.S., defines the
term “dealer” to include “a marketplace provider that has a physical presence in this state or that makes
or facilitates through its marketplace a substantial number of remote sales.” Section 212.0596(1)(a), F.S.,
defines the term “remote sale” to mean “a retail sale of tangible personal property ordered by mail,
telephone, the Internet, or other means of communication from a person who receives the order outside
of [Florida] and transports the property or causes the property to be transported to a location in [Florida].”
“Substantial number of remote sales” is defined by s. 212.0596(1)(b), F.S., to mean “any number of taxable
remote sales in the previous calendar year in which the sum of the sales prices . . . exceeded $100,000.”
Marketplace providers that are dealers are required to collect and remit tax on the taxable retail sales
made through the marketplace. Section 212.05965(1)(a), F.S., defines “marketplace” to mean any
physical place or electronic medium through which tangible personal property is offered for sale. Based
on the information provided, Taxpayer operates a “marketplace,” as defined by s. 212.05965(1)(a), F.S.,
as Taxpayer provides an online platform through which tangible personal property is offered for sale.
Taxpayer’s obligation to register as a dealer is dependent on whether it meets the definition of
“marketplace provider” as defined in s. 212.05965(1)(b), F.S. Section 212.05965(1)(b), F.S., provides that
a “marketplace provider” means “a person who facilitates a retail sale by a marketplace seller by listing
or advertising for sale by the marketplace seller tangible personal property in a marketplace and who
directly, or indirectly through agreements or arrangements with third parties, collects payment from the
customer and transmits all or part of the payment to the marketplace seller, regardless of whether the
marketplace provider receives compensation or other consideration in exchange for its services.”
Your letter provides that once a customer’s order is confirmed, Taxpayer is “no longer involved in the
transaction.” The participating dealer will fill the order, directly invoice the customer, and collect payment
“directly from the customer according to their agreed payment terms.” In the case of payments processed
by the financial services company, the participating dealer receives payment for the outstanding
receivable from the financial services company. The financial services company collects payment for the
outstanding receivable from the online customer. Taxpayer receives a commission equal to an agreed
percentage of the dealers’ sales made through the platform

Conclusion

Technical Assistance Advisement
June 16, 2022
Florida Department of Revenue
Page 7

Taxpayer facilitates retail sales by advertising participating dealer’s inventory of vehicle parts on
Taxpayer’s online platform. However, based on the information provided regarding the transactions
between the dealers and purchasers, there are no cases where the Taxpayer “collects payment from the
[customer] and transmits all or part of the payment to the [dealer].” The purchaser pays the dealer
directly for the purchase. In cases where the purchase is financed by the financial services company, the
dealer is paid by the financial services company and the purchaser makes payment directly to the financial
services finance company. At no time, does the financial services company collect and transmit all or part
of the purchaser’s payment to the dealer. Therefore, Taxpayer is not a “marketplace provider,” as defined
by s. 212.05965(1)(b), F.S.
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 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 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.
If you have further questions with regard to this matter and wish to discuss them, you may contact me
directly at (850) 717-7754.
Sincerely,

Brinton Hevey
Technical Assistance & Dispute Resolution
Florida Department of Revenue
Record ID: 680746