Stay up to date with sales tax: Join our mailing list!

A truck rental business’ commission payments to dealers who rented trucks and equipment to customers were found to be not subject to Florida sales tax because the taxpayer did not have use, access, or control over the dealer’s real property, the dealer had sole discretion as to where to locate the trucks and equipment, the trucks and equipment did not reside on a set amount of space, and the taxpayer did not have a right to enter the dealer’s locations to reclaim property. Further, although the commission payments are made up of a variety of factors (such as safety, maintenance, customer complaints, etc), the payments are essentially tied to the amount of the time the trucks and equipment are rented out by the dealer and not located on the dealer’s property; if the trucks and equipment do not leave the dealer’s location, the dealer will not receive a commission. Because of these factors, the taxpayer was found to not be leasing or being granted a license for the use of the dealer’s real property, and therefore its payments to the dealer are not subject to sales tax. (Technical Assistance Advisement, No. 10A-005, Florida Department of Revenue, February 10, 2010)


A newspaper publisher and commercial printer failed to demonstrate eligibility for a sales and use tax exemption for industrial machinery and equipment used in expanding manufacturing facilities to increase productive output by at least 10%. To reach the 10% requirement, the publisher erroneously counted custom and circulation inserts separately from newspaper. Since the exemption states that component parts of a newspaper, like the inserts, are not to be treated separately for tax purposes, the publisher was not entitled to a refund of sales and use tax paid. (Times Publishing, Co. v. Department of Revenue, Florida Department of Revenue, DOAH Case Nos. 08-3938 and 08-3939 (DOR 10-01-FOF), February 11, 2010.


A Florida taxpayer’s contract to install a commercial refrigeration system, purchased for a third party vendor, is considered a contract for the improvement of real property for sales and use tax purposes. The installation process, which consists of running tubing and wiring to and from the equipment in such a way that the conduits cannot be removed without damaging the building, is also considered improvement to real property. The maintenance portion of the contract is subject to sales tax since it includes maintenance on both real and tangible personal property. (Technical Assistance Advisement, No. 09A-035, Florida Department of Revenue, July 1, 2009, released August 2009).


In a technical assistance advisement, the Florida Department of Revenue determined that payments made by museum patrons to a museum (the taxpayer) for the privilege of entering exhibits are subject to sales and use tax absent any applicable exemptions. In this situation, the exemption allowed for events sponsored by universities does not apply because the exhibits are not the result of exclusive faculty and student talent. In addition, the taxpayer is not allowed the exemption for sponsoring exhibits so long as it assumed 100 percent of the risk of the venture because this exemption was repealed July 1, 2009. (Technical Assistance Advisement, No. 09A-061, Florida Department of Revenue, November 23, 2009)


The Florida Department of Revenue found that a taxpayer’s use of an independent consultant in Florida did not create nexus for Florida sales and use tax. The taxpayer is a limited liability company that makes interstate sales of general merchandise through the mail to customers located in Florida and other states. Florida law provides that a dealer who makes mail order sales must collect and remit Florida tax on such sales, when the dealer has agents in this state “who solicit business or transact business on behalf of the dealer.” Generally, the “transaction of business” on behalf of the dealer includes activities that further “the taxpayer's ability to establish and maintain a market in this state”. However, the taxpayer claimed that it no longer maintains any place of business, inventory, or other property in Florida. In addition, the taxpayer does not have any employees, agents, or representatives in Florida soliciting sales orders or conducting any other business activities on behalf of taxpayer.

The Department would deem the following activities by a dealer's representative or agent to create sales and use tax nexus: 1) the solicitation of orders; 2) the sale or acceptance of orders; 3) the acceptance of payments; 4) the delivery of merchandise; 5) the service of merchandise; or 6) the representation of the dealer in Florida through some other means. In this situation, the independent consultant provides services to the taxpayer’s personnel at its corporate headquarters and does not help the taxpayer develop a market for its products in Florida. Additionally, the consultant does not interact with the taxpayer's customers or vendors and any work that the consultant performs in Florida on the taxpayer's process improvement projects is invisible to the taxpayer's customers. Therefore, since the consultant’s activities do not constitute any of the activities described above, the taxpayer is not obligated to collect and remit Florida tax on its mail order sales of tangible personal property, due to the use of this consultant. (Technical Assistance Advisement, No. 09A-058, Florida Department of Revenue, November 9, 2009)



Scroll to Top