Were a court-appointed receiver's purchases for closing a contaminated former fertilizer facility exempt as pollution-control equipment or government purchases?

Plain-English summary

The receiver had to pay Florida sales tax on equipment, materials, and specialty chemicals purchased to maintain and close a contaminated former fertilizer facility.

The pollution-control exemption did not apply because fertilizer manufacturing had ended decades earlier. The Department read the exemption as covering pollution control or abatement used in manufacturing tangible personal property, not later cleanup and closure of a contaminated site.

The government-purchase exemption also failed. The receiver bought directly from vendors and then sought reimbursement from the Florida Department of Environmental Protection. The government did not pay the dealers directly or present its exemption certificate at the sales, and the receiver was appointed by the circuit court rather than shown to be an instrumentality of the agency.

Common questions

Did environmental necessity make the purchases exempt? No. Compliance with environmental closure requirements did not satisfy the manufacturing-related pollution-control exemption on these facts.

Did state funding make them government purchases? No. Reimbursement with state funds was not the same as direct payment by the governmental entity to the seller.

Was the receiver treated as the agency's instrumentality? No. The record did not establish that status; the Department emphasized that the receiver worked for the circuit court.

Could a prior TAA establish an exemption? Not for this requester. The advisement states that a TAA has no precedential value except to the taxpayer that requested it.

Citations and references

• Fla. Stat. §§ 212.051(1), 212.08(6)(a), and 213.22.
• Fla. Admin. Code r. 12A-1.038(1), (4).

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 23A-002

Original ruling text

QUESTION: Based on the facts provided below, are Taxpayer’s purchases of equipment,
materials, and/or specialty chemicals, which are used for its court appointed closure activities at
Facility, exempt from Florida sales tax pursuant to either s. 212.051(1), F.S. or s. 212.08(6), F.S.?
ANSWER: Based on the facts provided, Taxpayer’s purchases of equipment, materials, and/or
specialty chemicals, which are used for its court appointed closure activities at Facility, are not
exempt from Florida sales tax pursuant to either s. 212.051(1), F.S. or s. 212.08(6)(a), F.S.

January 25, 2023

Via Email:

Re:

Dear

Technical Assistance Advisement – TAA #: 23A-002
(“Taxpayer”)
Sales and Use Tax – Pollution Control Exemption
Sections 212.08(6)(a), 212.051, 213.22, Florida Statutes - (“F.S.”)
Rules 12A-1.038, 12A-1.096, Florida Administrative Code - (“F.A.C.”)
FEI #:
BP #:
:

This is in response to your letter dated October 06, 2022, requesting this Department’s issuance
of a Technical Assistance Advisement (“TAA”) pursuant to s. 213.22, F.S., and Rule Chapter 12-11
F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request 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 s. 213.22, F.S.

Technical Assistance Advisement
January 25, 2023
Page 2

REQUESTED ADVISEMENT
Based on the facts provided below, are Taxpayer’s purchases of equipment, materials, and/or
specialty chemicals, which are used for its court appointed closure activities at Facility, exempt
from Florida sales tax pursuant to either s. 212.051(1), F.S. or s. 212.08(6), F.S.?
FACTS
At the center of this is a
complex first built in
to manufacture fertilizer from
phosphate (“Facility”). Facility holds stacks of phosphogypsum, a byproduct of fertilizer
production, and reservoirs of water (the “Stack System”). The water is contaminated wastewater
leftover from the former operations at Facility and contains phosphorus, nitrogen, acid and heavy
metal particulate. The Stack System contains four elevated ponds, holding approximately 420
million gallons of water. Fertilizer production operations at Facility were terminated in the mid
or late 1990s. The owner of the Facility is believed to be insolvent. The mortgageholder initiated
foreclosure proceedings in
naming, among others, the Florida Department of
Environmental Protection (“FDEP”).
On April 3, 2021, the Governor issued an Executive Order in response to increased flows from a
leak at Facility. The Executive Order declared a state of emergency and gave FDEP authority to
take any actions necessary to abate the imminent hazard and to minimize adverse environmental
impacts. On August 5, 2021, FDEP filed a motion in the Foreclosure Case to appoint Taxpayer as
receiver for Facility pursuant to s. 403.4154(3)(e), F.S. FDEP’s Motion provided:
… The Receiver should be charged with addressing three overriding concerns: 1) the dayto-day maintenance of the phosphogypsum stack system to prevent spills and other
discharges; 2) the treatment, discharge or disposal of process water to lessen the danger
of a catastrophic spill; and 3) the closure of the phosphogypsum stack system in
accordance with Department rules.
On August 25, 2021, the Circuit Court entered an Order appointing Taxpayer to take control of
Facility and oversee its closure based on FDEP’s Motion and Stipulated Motion for Order
Appointing Receiver.
Pursuant to the Order, Taxpayer is charged with the responsibility of “maintaining, managing and
closing as efficiently and expeditiously as possible Facility in accordance with all applicable State
and Federal laws.”
On September 22, 2021, Taxpayer and FDEP entered into a Maintenance and Funding Agreement
(a copy of which was provided to the Department of Revenue for purposes of this request).
Facility must be reconfigured so that it no longer holds wastewater. To make the necessary
changes, the Stack System must be drained to permit the deployment of equipment and start

Technical Assistance Advisement
January 25, 2023
Page 3

remediation activities. While most of the activities will be performed by contractors and subcontractors, Taxpayer has and will be purchasing equipment, materials, and specialty chemicals
used for closure activities.
The Florida Legislature has appropriated
to fund Taxpayer’s activities. FDEP
disburses the funds to Taxpayer pursuant to budgets submitted by Taxpayer.
To maintain quality control and avoid markup of the costs of the materials by contractors,
Taxpayer will source and acquire most of the materials directly. The materials to be purchased
by Taxpayer are required to complete the closure of the stacks in compliance with state and
federal environmental laws. The primary components are:
Materials Acquisition for Closure of the Stack Compartments
Soil
Sand tailings
High-Strength Woven Geotextile
HDPE Liner Materials
HDPE Pipe and Fittings
Aggregates and gravel
Non-Woven Geotextile
Bi-Planar HDPE Geonet-Geotextile Composite
Concrete Erosion Control Mat
Concrete and Reinforcing Steel
Grassing, seeds, and sod
All materials are tested by the engineers and must comply with standards required by Chapter
62-673, F.A.C, the Administrative Order, and Permit.
Equipment, Materials, and Chemicals for Maintenance of the Property
In addition to the acquisition of materials for stack closure activities, Taxpayer is also required to
maintain Facility. Chapter 62-673, F.A.C, the Administrative Order, and Permit all require
continuous testing and monitoring. Equipment, materials, and chemicals used in maintenance
activities are:
Ford F350 4WD pickup truck
Ford Explorer 4WD SUV
2 Kubota 4WD UTVs
New Holland Tractor
Bobcat Utility machine with bush hog and front-end loader
Generators
Pumps

Technical Assistance Advisement
January 25, 2023
Page 4

Pipes and fittings
Building materials
Sand, soil, and gravel
Cement
Personal protective equipment (hardhats and reflective vests)
Misc. hand tools
Lab equipment and chemical supplies
Testing equipment
Herbicide and sprayers
Misc. parts for repairs
Gasoline and diesel fuel
Modular Office and furniture
Office equipment and supplies
Polymer
Caustic - Sodium Hydroxide (50%)
Bleach
HCL (25-35%) (Hydrochloric Acid)
Sodium Bisulfite (40%)
Bleach
LAW AND DISCUSSION
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 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 in this state.
Section 212.051(1), F.S., provides that “sales, use, or privilege taxes shall not be collected with
respect to any facility, device, fixture, equipment, machinery, specialty chemical, or
bioaugmentation product used primarily for the control or abatement of pollution2 or
contaminants3 in manufacturing, processing, compounding, or producing for sale items of
tangible personal property at a fixed location, or any structure, machinery, or equipment
installed in the reconstruction or replacement of such facility, device, fixture, equipment, or
machinery. To qualify, such facility, device, fixture, equipment, structure, specialty chemical, or
bioaugmentation product must be used, installed, or constructed to meet a law implemented by,
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
“Pollution” is the presence in the outdoor atmosphere or waters of the state of any substances, contaminants, noise, or manmade or humaninduced impairment of air or waters or alteration of the chemical, physical, biological, or radiological integrity of air or water in quantities or at
levels which are or may be potentially harmful or injurious to human health or welfare, animal or plant life, or property or which unreasonably
interfere with the enjoyment of life or property, including outdoor recreation unless authorized by applicable law. See s. 403.031(7), F.S.
3
“Contaminant” is any substance which is harmful to plant, animal, or human life. See s. 403.031(1), F.S.

Technical Assistance Advisement
January 25, 2023
Page 5

or a condition of a permit issued by, the Department of Environmental Protection; however, such
exemption shall not be allowed unless the purchaser signs a certificate stating the facility, device,
fixture, equipment, structure, specialty chemical, or bioaugmentation product to be exempted is
required to meet such law or condition.” (Emphasis added.)
In the instant case, Facility is no longer in operation. Taxpayer’s purchases are not being made
in conjunction with the previously conducted manufacturing of fertilizer for sale. Instead, the
activity that is being conducted at Facility is in the nature of “clean up” and “closure.” The
exemption provided under s. 212.051(1), F.S., is not for the clean-up of contaminated facilities or
locations, as is currently being done at Facility. Rather, the exemption is for the control or
abatement of pollution occurring during the manufacturing process of tangible personal
property.
Section 212.08(6)(a), F.S., provides:
There are also exempt from the tax imposed by this chapter sales made to the
United States Government, a state, or any county, municipality, or political
subdivision of a state when payment is made directly to the dealer by the
governmental entity.
Rule 12A-1.038(1) and (4), F.A.C., further provide:
(1) It is the specific legislative intent that each and every sale…or rental is taxable,
unless such sale…or rental is specifically exempt. The exempt nature of the
transaction must be established by the selling dealer. Unless the selling dealer
shall have taken from the purchaser the required documentation…the sale shall
be deemed to be taxable.

(4) Sales made directly to governmental units.
(a) Any state, or any county, municipality, or political subdivision of a state that
holds a valid Consumer’s Certificate of Exemption (Form DR-14) issued by the
Florida Department of Revenue may issue a copy of its certificate to the selling
dealer to purchase or rent taxable items or services tax-exempt in lieu of paying
sales tax…
(b) Payment for tax-exempt purchases or rentals of property or services must be
made directly to the selling dealer by the governmental unit of a state, or any
county, municipality, or political subdivision of a state...When the payment for
taxable property or services is made with the personal funds of an authorized
representative of the governmental unit, the purchase is subject to tax, even if the

Technical Assistance Advisement
January 25, 2023
Page 6

representative is subsequently reimbursed with the governmental unit’s funds.”
(Emphasis added.)

As provided in s. 212.08(6)(a), F.S., and Rule 12A-1.038, F.A.C., for a sale to a governmental entity
to be exempt, two criteria must be met: 1) Payment for tax-exempt purchases or rentals of
property must be made directly to the selling dealer by the governmental entity and 2) the
governmental entity must extend a valid exemption cerficiate at the time of the sale. Under the
facts presented, Taxpayer purchases or rents the equipment and services it needs directly from
vendors and then seeks reimbursement from FDEP. Under the facts presented, FDEP cannot
extend a valid exemption certificate at the time of sale.
While Taxpayer is working under the direction of FDEP, and it is being reimbursed by FDEP, it
does not “work for” FDEP. Nothing in the documentation provided indicates that Taxpayer is an
“instrumentality” of FDEP. Taxpayer, as a court appointed Receiver, works for the Circuit Court.
Paranthetically, ss. 212.08(6)(b) and (c), F.S., provide for situations wherein a contractor or agent
of a government or political subdivision purchases tangible personal property tax exempt as part
of a “public works” project. The facts presented do not support a “public works” exemption.
Among the reasons is the fact that Taxpayer is responsible for performing clean-up and closure
duties under the direction of FDEP (who is acting under its statutory regulatory obligations).
Taxpayer is not being engaged to build or construct a public work that is owned by a government
or political subdivision. FDEP does not own Facility.
In the instant case, Taxpayer has not complied with the exemption criteria in s. 212.08(6)(a), F.S.
Therefore, Taxpayer’s purchases of equipment, materials, and/or specialty chemicals, are not
exempt from Florida sales tax pursuant to s. 212.08(6)(a), F.S.
As to your contention regarding a previously issued TAA, it is important to note that a TAA has
no precedential value except to the taxpayer who requests the advisement. See s. 213.22, F.S.
CONCLUSION
Based on the facts provided, Taxpayer’s purchases of equipment, materials, and/or specialty
chemicals, which are used for its court appointed Receiver activities at Facility, are not exempt
from Florida sales tax pursuant to either s. 212.051(1), F.S. or s. 212.08(6)(a), F.S.
This response constitutes a TAA 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

Technical Assistance Advisement
January 25, 2023
Page 7

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 TAA, 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 ten (10) days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850) 717-7759.
Sincerely,

Alesia L Pride
Alesia L. Pride
Tax Law Specialist
Technical Assistance & Dispute Resolution

Record ID: 7000811979

Technical Assistance Advisement
January 25, 2023
Page 8

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