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Set up fees charged to a customer by a taxpayer, who sells and rents equipment, were subject to Florida sales and use tax. When a set up fee is included as part of the charge for delivery, the lump sum amount for the delivery and set up is also subject to tax. Delivery charges for rented equipment were also taxable, since the taxpayer’s sales agreement and invoices did not specify whether the customer had an option regarding the delivery. Conversely, delivery charges for sold equipment were not taxable when the sales agreement provided that the stated price was F.O.B. at the taxpayer’s company location and delivery charges were separately stated. (Techincal Assistance Advisement, No. 09A-018, Florida Department of Revenue, April 3, 2009).


Florida has amended its rules on electronic filing requirements and lowered the thresholds. The amended rules states that any taxpayer that pays certain taxes, surtaxes, surcharges, and fees, including corporate income, sales and use, and communications, must file electronically if the amount of tax due is greater than $20,000. Previously, the threshold for these taxes was $30,000, with the exception of the communications tax, which was $50,000. In addition to this threshold, taxpayers who are required to file their federal income tax return electronically are required to file their Florida corporate income tax returns electronically as well. (Rules 12-24.001, 12-24.002, 12-24.003, 12-24.004, 12-24.005, 12-24.007, 12-24.008, 12-24.009, 12-24.010, and 12-24.011, Florida Department of Revenue, effective June 1, 2009)


The Florida House of Representatives has received legislation that would bring Florida into conformity with the Streamlined Sales and Use Tax Agreement. If enacted, the legislation would be effective July 1, 2009. (H.B. 329, as prefiled in the Florida House of Representatives)


A company’s sale of software created for the medical industry was determined to be a sale of custom software, a non-taxable service transaction when sold separately. The company also employs computer programmers for the support and maintenance of the software. Similarly, if the maintenance agreement is sold separately, it is also not taxable. However, if either is combined with the sale of tangible personal property, they would be subject to sales and use taxes. (Technical Assistance Advisement, No. 09A-001, Florida Department of Revenue, January 8, 2009)


The Florida Department of Revenue does not have the authority to assess sales and use taxes on the total amount the taxpayer billed his tenants/clients as base rent, as that amount encompassed more than just the total rent charged. The taxpayer develops and leases special purpose medical centers and provides administrative and other services to physician groups. Under agreement, the taxpayer provides the physician groups with a monthly financial summary and invoice, broken down as the base rent, the service fee, and the sales tax due. Included in the base rent are center expenses, such as salaries, benefits, and utilities. After conducting an audit, the Department issued a notice of proposed assessment which included additional sales tax due on items included in the base rent amount. It was clear that the taxpayer’s agreement with the physician groups provided for both payments taxable as total rent and payments not subject to the sales and use taxes, such as salaries and benefits. Therefore, the Department only has authority to assess taxes on the center expenses that are taxable as total rent, not on the total amount billed as base rent. (USCarido Vascular, Inc. v. Florida Department of Revenue, Florida Court of Appeal, First District, No. 1D07-3811, September 23, 2008)



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