Could a county buy materials, supplies, and equipment tax-free for a county-owned Supervisor of Elections facility by using Florida's public-works direct-purchase procedure?

Plain-English summary

The county's direct purchases for its Supervisor of Elections facility qualified for the governmental public-works sales-tax exemption. The county would own the completed facility, and the purchased items would go into or become part of that project.

The planned procedure made the county—not its developer, contractor, or subcontractors—the purchaser. The county would issue purchase orders directly to third-party vendors, receive vendor invoices, pay from public funds, take title at purchase or delivery, and assume the risk of loss.

The county also would give each vendor and contractor a Certificate of Entitlement, attach the certificate to each purchase order, and accept liability for tax, penalty, and interest if the Department later found a purchase ineligible.

Common questions

Could the contractor make the purchases for the county? The approved facts instead required the county to purchase directly from vendors.

What showed that the county was the purchaser? Direct purchase orders, direct invoices, direct public payment, passage of title, and the county's assumption of risk of loss.

Did every item for the project automatically qualify? The ruling covered items that would go into or become part of the public works and were bought under the described procedure.

Was a Certificate of Entitlement required? Yes. The county planned to provide it to vendors and contractors and attach it to each purchase order.

Citations and references

• Fla. Stat. § 212.06(1)(a)
• Fla. Stat. § 212.08(6)
• Fla. Admin. Code rr. 12A-1.056(1)(a) and 12A-1.094(4)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 23A-004

Original ruling text

QUESTION:
Whether Taxpayer’s purchases of materials, supplies and equipment for its Supervisor of Elections Facility
would qualify for the exemption in s. 212.08(6), F.S., for sales to governmental entities of tangible personal
property which becomes part of public works owned by the governmental entity.
ANSWER:
Taxpayer’s purchases of materials, supplies and equipment for its Supervisor of Elections Facility would
qualify for the exemption in s. 212.08(6), F.S. Taxpayer has established that its purchases would meet the
requirements of Rule 12A-1.094(4)(b), F.A.C., and that the items it will be purchasing would “go into or
become a part of” public works pursuant to s. 212.08(6), F.S.
February 24, 2023

Via Email:
Re:

Technical Assistance Advisement – TAA #: 23A-004
(“Taxpayer”)
Sales and Use Tax – Public Works Contracts
Sections 212.06 and 212.08, Florida Statutes (“F.S.”)
Rule 12A-1.094, Florida Administrative Code (“F.A.C.”)
BP #:
(“Developer”)
FEI #:
BP #: N/A

Dear

:

This is in response to your letter dated January 9, 2023, requesting this Department’s issuance of a
Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S., and Rule Chapter 12-11
F.A.C., regarding the matter discussed below. Your request has been carefully examined, and the

Technical Assistance Advisement
February 24, 2023
Page 2
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.
REQUESTED ADVISEMENT
Whether Taxpayer’s purchases of materials, supplies and equipment for its Supervisor of Elections Facility
would qualify for the exemption in s. 212.08(6), F.S., for sales to governmental entities of tangible personal
property which becomes part of public works owned by the governmental entity.
FACTS
Taxpayer is working with a selected Developer to commence the public works construction project known
as “[Taxpayer] Supervisor of Elections Facility” (“Project”). Taxpayer states that since it will wholly own
the finished Project, the Project is considered a public works project.
Taxpayer states that the Direct Purchase procedures will be used exclusively for the purchase of supplies,
goods, and materials from third party suppliers and not from contractors or subcontractors involved with
the Project. Taxpayer states in its letter that purchases for the Project will be made in accordance with
Rule 12A-1.094(4)(b)1. - 5., F.A.C., in the following manner:

1. Direct Purchase Order – [Taxpayer] will be issuing purchase orders directly to the vendor(s)
   supplying the contractor’s materials and will provide the vendor(s) with a copy of [Taxpayer’s]
   Florida Consumer's Certification of Exemption.
2. Direct Invoice - Vendor's invoice will be issued to [Taxpayer] and not the contractor.
3. Direct Payment - [Taxpayer] will make payment directly to the vendors, utilizing public funds.
4. Passage of Title - [Taxpayer]will take title to the tangible personal property from the vendor(s) at
   the time of purchase or delivery by the vendor(s).
5. Assumption of the Risk of Loss - [Taxpayer] will be assuming the risk of damage or loss at the time
   of purchase.
   Taxpayer further states that its purchases will be made in accordance with Rule 12A-1.094(4)(c)1. – 4.,
   F.A.C., as follows:
6. Issuance of a Certificate of Entitlement (Attachment C) to each vendor and to the [Taxpayer’s]
   contractor(s) affirming tax-exempt purchases will go into or become a part of the public works
   project.
7. Attaching a Certificate of Entitlement to each purchase order.
8. Affirming that if the Department of Revenue determines that the sale is not qualified for the
   exemption under section 212.08(6),F.S., [Taxpayer] will be liable for any tax, penalty, and interest
   determined due.

Technical Assistance Advisement
February 24, 2023
Page 3

4. Following the format for Certificate of Entitlement as shown on the Department of Revenue
   website.
   LAW AND DISCUSSION
   Sales tax is due at the moment of the transaction. See s. 212.06(1)(a), F.S.; Rule 12A-1.056(1)(a), F.A.C.
   There is an exemption, however, in s. 212.08(6), F.S., for sales of tangible personal property made directly
   to governmental entities when these items will go into or become part of public works owned by the
   governmental entity. Section 212.08(6)(b), F.S., provides that one of the criteria for exemption is that the
   governmental entity certify to the vendor and its contractor that it is entitled to the exemption by
   providing them with a Certificate of Entitlement to such exemption. The Department has also adopted
   Rule 12A-1.094, F.A.C. regarding this exemption. See s. 212.08(6)(c), F.S.
   The criteria which must be met in order for a sale to be considered an exempt sale to a governmental
   entity of tangible personal property that will become part of public works is set forth in Rule 12A1.094(4)(b), F.A.C., which provides:
   (b) The following criteria that govern the status of the tangible personal property prior to its
   affixation to real property will be considered in determining whether a governmental entity
   rather than a contractor is the purchaser of materials:
   1.
   Direct Purchase Order. The governmental entity must issue its purchase order
   directly to the vendor supplying the materials the contractor will use and provide the vendor
   with a copy of the governmental entity’s Florida Consumer’s Certification of Exemption.
   2.
   Direct Invoice. The vendor’s invoice must be issued to the governmental entity,
   rather than to the contractor.
   3.
   Direct Payment. The governmental entity must make payment directly to the
   vendor from public funds.
   4.
   Passage of Title. The governmental entity must take title to the tangible personal
   property from the vendor at the time of purchase or delivery by the vendor.
   5.
   Assumption of the Risk of Loss. Assumption of the risk of damage or loss by the
   governmental entity at the time of purchase is a paramount consideration. A governmental
   entity will be deemed to have assumed the risk of loss if the governmental entity bears the
   economic burden of obtaining insurance covering damage or loss or directly enjoys the
   economic benefit of the proceeds of such insurance.
   Taxpayer has indicated that it will comply with the requirements set forth in subparagraphs (4)(b)1.-5.
   and (4)(c)1.-4. of Rule 12A-1.094, F.A.C.
   Upon review of the documentation submitted, including the agreement between Taxpayer and the
   Developer (Attachment E1), Taxpayer’s Direct County Purchase of Materials Program (Attachment E2),

Technical Assistance Advisement
February 24, 2023
Page 4
Schedule of Owner Purchased Materials (Attachment E2), and other related documents, Taxpayer’s
procedure satisfies the requirements to claim tax-exempt status for its direct materials purchased.
Taxpayer will issue its own purchase orders directly to the vendors for the purchased materials, and it will
issue payment for those materials directly to the vendors. Taxpayer will also assume title to the materials
at the time they are delivered to the job site. The vendors will issue invoices directly to the Taxpayer, and
Taxpayer will issue a Certificate of Entitlement to the vendors, as well as to the contractors.
CONCLUSION
Taxpayer’s purchases of materials, supplies and equipment for its Supervisor of Elections Facility would
qualify for the exemption in s. 212.08(6), F.S. Taxpayer has established that its purchases would meet the
requirements of Rule 12A-1.094(4)(b), F.A.C., and that the items it will be purchasing would “go into or
become a part of” public works pursuant to s. 212.08(6), 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 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)717-6701.
Sincerely,

Shundra McClean
Shundra McClean
Tax Law Specialist
Technical Assistance & Dispute Resolution
Record ID: 7000902645

Technical Assistance Advisement
February 24, 2023
Page 5
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