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FL Litigation Alert - Car Wash Takes on Florida Department of Revenue

Car getting washed

Over the past few years, our comrades in Tallahassee have targeted the Florida convenience store industry. We are aware of the onslaught as we have defended hundreds of companies that sell alcohol and tobacco products, namely convenience stores, gas stations, liquor stores, bars, and restaurants. As if targeting the sales of beer and cigarettes was not enough, the Florida Department of Revenue slapped a car wash wish about $100,000 of sales tax related to its business. The car wash did as more Florida taxpayers should, it fought back. (The original complaint of the suit is downloadable at the end of this article).

On March 28, 2013, Fabian Lewis LLC filed suit against the Florida Department of Revenue ("FL DOR"). The story began, as most tax assessments do, in August, 2012 with a Florida sales tax audit. In February, 2013, the Department issued the dreaded Notice of Proposed Assessment and claimed the car wash owed tax of $87,598.72 plus interest of $12,355 for a total assessment of about $100,000. For the reasons set forth below, the Taxpayer admitted to owing about $30,000 but contest the remaining $70,000. As is typical following a sales tax audit, a six figure assessment would cripple if not end the life of a taxpayer this size.

At the heart of the assessment is whether tax is due on the taxpayer's Tri-Foam Wash which is sold by the Taxpayer. Under Florida law, specifically Rule 12A-1.006(16), Florida Administrative Code ("F.A.C."), car washes that include only detergent or water softener are exempt. However, car washes that incorporate a protective film or coating are taxable. In other words, if the car was leaves something on the car, then there is a transfer of something tangible to the customer and the whole transaction becomes subject to sales tax. As is often the case in dealing with Florida sales tax law, the rule seems pretty straightforward, however, its application can be troublesome and confusing. So I ask you, is a Tri-Foam car wash an addition of a protective film or coating to your car?

Your gut reaction was probably similar to mine in that when I get my car washed with that nice smelling Tri-Foam, it is protecting my car. However, in the Complaint the Taxpayer alleges that it along with the manufacturer of the foam believe the foam does not provide a protective film and or coating to the car. If the manufacturer of the foam specifically provides that nothing is left on the car, then the case seems pretty straightforward and clear cut. If the Taxpayer can provide evidence that the tri-foam does not protect the car then it will likely succeed on this case. This case can be important for many car washes and gas stations throughout Florida.

This case is strikingly similar to a case in which our firm handled in 2005-06 dealing with tire shine as part of a car wash. In Wash & Wax World, Inc. v. DOR, Case No. 05-2176, we argued that tire shine provided by a car wash actually deteriorated the tire to make it shiny rather than providing a protective layer to it. In order to prove that the film was not protective but rather was damaging, we presented an expert witness. The witness confirmed our position which really hurt the Department of Revenue's case. While I cannot divulge the specifics, I can confirm that a settlement was reached after the expert witness's testimony.

The present case, Fabian Lewis, should remind any state and local tax professional to always question whether the auditor's findings are correct. In our practice, we regularly see situations in which the Taxpayer misses an opportunity to save valuable money on a Florida sales tax assessment. Further, many other Taxpayer's know the law and do not pursue the process in getting the correct result. If you think this fits your situation or your client's situation, please do not hesitate to contact us for a free consultation. Even after the payments are made and the audit is over, it is possible to file a refund claim which effectively challenges the audit results.

Florida Sales Tax Audit Help, Florida Sales Tax Defense, Florida Sales Tax Attorney, Florida state and local taxAbout the author: Mr. Donnini is a multi-state sales and use tax attorney and an associate in the law firm the Law Offices of Moffa, Sutton, & Donnini, P.A., based in Fort Lauderdale, Florida. Mr. Donnini's primary practice is multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of federal tax controversy, federal estate planning, Florida probate, and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Donnini is currently pursuing his LL.M. in Taxation at NYU. You may also read more about Mr. Donnini in his FIRM BIO or read his blog at If you have any questions please do not hesitate to contact him via email or phone at 954-642-9390.


Fabian Lewis, LLC vs. FL Department of Revenue, Case No. 13-1244-CAG (FL Cir. Ct., 5th Cir.) (Compliant as filed March 29, 2013)

Rule 12A-1.006(16), Florida Administrative Code

TAA 99A-059 - Is a plain car wash taxable when the wash is separately stated from a wax?


FLORIDA SALES TAX HELP, July 14, 2013, by James Sutton, CPA, Esq.

FL TAX ALERT – 200% PENALTY STINGS BUSINESS OWNER, March 24, 2013, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.


FL TAX ALERT – CONVENIENCE STORE OWNERS TARGETED!!!!, August 16, 2012, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.