When a New York florist takes an order and wires it to another florist, where — and whether — is sales tax collected?

Plain-English summary

John Raspante, CPA, asked about a New York flower-selling client who takes orders from the public and then subcontracts the arranging and delivery to other florists. The client doesn't grow, stock, or deliver flowers itself, but it does contract with customers, bill them, and collect. The question: where, and whether, does it collect sales tax on orders filled inside or outside New York?

The answer hinges on the florist wire (telegraphic/telephonic delivery) rules (20 NYCRR § 526.7(e)).

• Order routed through a wire association — tax where the order is taken. A New York member florist who takes an order and gives telegraphic/telephonic instructions to a second member florist to deliver must collect tax at the rate of the jurisdiction where the order is taken — regardless of whether the second florist or the delivery point is in or out of New York.
• The flip side — incoming wire orders. A New York florist need not collect tax on in-state deliveries it makes to fill wire orders received from other member florists (in or out of state) — the sending florist already handled the tax.
• Applied here: Raspante's client takes its orders in New York and fills them through a second member florist, so it must collect New York tax (order taken in New York).
• If there's no wire association — ordinary destination rules. When a sale isn't made through a florist wire service, the normal rule (20 NYCRR § 525.2(a)) applies: the client collects tax only on flowers delivered within New York, at the delivery-jurisdiction rate.
• No netting out expenses. When a flower sale is taxable, charges for service, telephone calls, relays, and the like are not deductible from the taxable price (20 NYCRR § 526.5(e)). See also TSB-M-82(31)S, Flowers by Wire.

What this means for you

Florist "flowers-by-wire" sales follow a special rule. Unlike ordinary sales (taxed where delivered), a wired order is taxed where the order is taken. If you take the order in New York and send it out via a wire service, you collect New York tax — even when the bouquet is delivered in another state.

Incoming wire orders you fill locally aren't yours to tax. When you're the delivering florist filling an order wired to you by another member florist, you don't collect tax on that in-state delivery — the originating florist already did.

No wire service? Fall back to destination rules. For direct (non-wire) sales, you collect New York tax only on deliveries within New York, at the local rate where delivery happens. And either way, you can't shave the taxable amount by breaking out service, phone, or relay charges.

Common questions

Q: I take an order in New York and wire it to a florist in another state. Do I charge New York tax?
A: Yes. Under the florist wire rules, tax is collected where the order is taken. Because you took it in New York, you collect New York tax regardless of where it's delivered.

Q: Another florist wired me an order and I delivered it here in New York. Do I collect tax?
A: No. A New York florist need not collect tax on in-state deliveries filling wire orders received from other member florists; the originating florist handled the tax.

Q: I sell flowers directly, not through a wire service. Which sales are taxable?
A: Only those delivered within New York, taxed at the rate of the delivery locality (the ordinary destination rule, 20 NYCRR § 525.2(a)). You also can't deduct service, telephone, or relay charges from the taxable price.

Citations and references

Regulation and memorandum:

• 20 NYCRR § 525.2(a) — sets the time and rate of tax; the point of delivery/transfer of possession controls (the "destination tax" rule) for sales not made through a florist wire association
• 20 NYCRR § 526.7(e) — florist wire (telegraphic/telephonic delivery association) rules: the florist taking the order collects tax at the rate where the order is taken, regardless of the delivery point; a florist filling an incoming member-to-member wire order need not collect tax on the in-state delivery
• 20 NYCRR § 526.5(e) — expenses such as service, telephone, and relay charges incurred in making a taxable sale are not deductible from the taxable price
• TSB-M-82(31)S, Flowers by Wire — Department guidance on the taxation of flowers-by-wire transactions

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1988.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a88_35s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-88(35)S
Sales Tax
July 24, 1988

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S871216A

On December 16, 1987, a Petition for Advisory Opinion was received from John Raspante,
CPA, 477 - 86th Street, Brooklyn, New York 11209.
The issue raised is the taxability of flower sales when the orders are taken in New York State
for deliveries within or without the State.
Petitioner is an accountant who represents a client who is engaged in the business of selling
flowers and who is located in New York State. Petitioner's client receives orders for flowers from
the general public and then subcontracts the actual preparation and delivery of the orders to other
florists. Petitioner's client does not grow, stock or deliver flowers. However, he does contract with
his customers for the sale of flowers and does bill his customers and collect the charge for the
flowers delivered by the other florists.
Sales tax is imposed on the receipts, unless specifically exempt, from every retail sale of
tangible personal property; the tax liability is established at the time of the transaction and at the tax
rate in effect at the point of transfer of possession of property by the vendor to the purchaser or
designee. 20 NYCRR 525.2(a)(1), (2) and (3).
However, special rules apply to transactions conducted between members of a florist's
telegraphic or telephonic delivery association.
A New York State member florist who receives an order from a customer pursuant to which
he gives telegraphic or telephonic instructions to a second member florist for delivery of flowers, is
liable for collection of tax at the rate in effect in the jurisdiction where the order is taken, irrespective
of whether the second florist's business or the point of delivery is situated inside or outside of New
York State. Conversely, a New York State member florist need not collect tax on receipts from
flower deliveries within the State if they result from telephone or telegraph orders received from
other member florists whether located inside or outside the State. 20 NYCRR 526.7(e).
Accordingly, when Petitioner's client receives an order for flowers and arranges delivery of
flowers through a second member florist, Petitioner's client must collect tax on the receipts from the
sale of such flowers because the order was received in New York State.
However, when flower sales are not made through a florist's telegraphic or telephonic
delivery association, they are taxable in accordance with the rules contained in regulation section
525.2(a), quoted above. Accordingly, under such circumstances, Petitioner's client would be required
to collect tax only on those sales of flowers delivered within New York State. The applicable rate
of tax is the rate in effect in the jurisdiction where delivery takes place.
RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR

-2­
TSB-A-88(35)S
Sales Tax
July 24, 1988

Petitioner should also refer to Technical Services Bureau Memorandum TSB-M-82(31)S,
Flowers by Wire.
It should be noted that when a flower sale is taxable, expenses for all service, telephone
calls, relays and any other charges incurred in connection with the sale are not deductible from the
taxable selling price. 20 NYCRR 526.5(e).

DATED: June 24, 1988

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.

RODERICK G. W. CHU, COMMISSIONER
TP-8 (3/83)

GABRIEL B. DiCERBO, DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR