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A Florida LLC company requested a Technical Assistance Advisement on the taxability of profits being given to a parent LLC by an LLC subsidiary when the subsidiary is located in a building owned by the parent. In Florida, rent payments are subject to sales tax. In this case, the company was claiming that no rent was being paid by the subsidiary to the parent. Under specific conditions, the Florida Department of Revenue found that profits could be given to the parent without creating a tax transaction in the situation described. The department indicated that the transaction would be exempt if the distributions do not coincide with property expense obligations by the owner of the property, the distributions do not match financial obligations for the property, and that the profits distributed are actual profits not linked to the financial responsibility of the property. (Florida Department of Revenue, TAA 04A-032, May 18, 2004.)


If canned software is customized and then sold to a customer in Florida as part of the same transaction then the entire charge is exempt as a professional service. However, if the canned software is sold and then a separate transaction between the same parties provides for the customization of the software, the sale of the canned software would be taxable. (Technical Assistance Advisement, No. 04A1-021, March 24, 2004.)


Based on a petition submitted by a Florida taxpayer, a technical assistance advisement has been issued to explain how tax and exemptions apply to new manufacturing facilities. Items that qualify for the manufacturing exemption in this facility include slag storage silos, slag transport system and raw material silos, pilings/slabs, and movable equipment. Other items mentioned include boiler fuels, electricity, consumable supplies and individual components used in the facility. (Technical Assistance Advisement, No. 04A-027, Florida Department of Revenue, April 12, 2004.)


Governor Jeb Bush enacted a tax holiday running from July 24, 2004 through August 1, 2004. The tax holiday allows for a temporary exemption of all purchases of clothing and related items costing $50 or less, books with a sales price of $50 or less, and school supplies costing $10 or less. (Florida H.B. 237, passed by House of Representatives on April 29, 2004 and Senate on April 30, 2004)


Anesthesia equipment purchased for single-time use by a health care practitioner is subject to sales and use tax. This product gains exemption from tax when it is sold or rented to a patient as directed by a health care practitioner. Generally, when medical products or devices are purchased in Florida by a health care practitioner to be used in their practice, the products or devices are subject to tax. Exceptions to this rule include certain orthopedic equipment and products temporarily incorporated into a person, such as endotracheal tubes, which are always exempt from tax. All other medical products or supplies and medicines become exempt from tax once prescribed by a health care practitioner to a patient. (Department of Revenue, Technical Assistance Advisement, No. 04A-011, February 16, 2004)



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