No Tax Collected on Out-of-State Drop Shipments to Florida

In a recent Technical Assistance Advisement, the Florida Department of Revenue has determined that no tax need be collected when an unregistered, out-of-state dealer purchases merchandise from a registered out-of state supplier (drop-shipper), but directs the supplier to ship the merchandise directly to a customer in Florida via a common carrier. The Department states that on third-party drop shipments, the drop shipment of merchandise into Florida would not be a considered a Florida sale if: 1) both the dealer and the vendor are located outside Florida; 2) the property, at the time of sale, is outside Florida; and 3) the vendor ships the merchandise from a point outside Florida by common carrier, or sends the goods through the U.S. Postal Service, to the dealer’s customer. Since the situation at question meets all three criteria, no Florida sale has occurred. Therefore, the Florida end user is responsible for paying the tax. (Technical Assistance Advisement 07A-008, Florida Department of Revenue, March 29, 2007)

Posted on September 3, 2008