Would a rose by any other name not smell as sweet? For the Department of Revenue, this rose smells like a loss. The Fourth DCA took a stand for Taxpayer's rights in its recent decision American Business USA Corp v. Department of Revenue. In a business model that seemed to rival 1-800 Flowers or Flowers.com, the taxpayer in this case took flower orders online. Then, the taxpayer would use local florists to fill the orders. The online company charged customers in Florida the appropriate sales tax, however, it did not charge tax to customers located outside of Florida. Should they have been charging tax to customers located outside of Florida's borders?

Like it so often does and armed with Florida law, the Florida Department of Revenue said that all sales were subject to Florida Sales Tax. Section 212.05(1)(l), Florida Statutes, states:

Florists located in this state are liable for sales tax on sales to retail customers regardless of where or by whom the items sold are to be delivered.

Put more simply, if a florist in Florida sells flowers to a customer in Georgia, the sale is still subject to Florida sales tax. This is inapposite to the general rules governing state taxes, as sales tax is usually destination-based. In any event, the FL DOR issued an assessment. The Taxpayer, as it should have, appealed the case within the agency and then filed in court. The Division of Administrative Hearings ("DOAH") upheld the assessment taxing a flower shop, based in Wellington, for sales outside the state of Florida. Faced with no alternative but to pay the tax, the online flower company appealed the order.

In an elegantly worded opinion, Judge Levine took issue with the imposition of a sales tax on out of state transactions. The opinion establishes that the lower court's result is unconstitutional. Specifically, to tax out of state sales is violative of the dormant commerce clause of the United States Constitution, as it burdens commerce between the states. The opinion, which is available below, goes so far as to cite The Federalist Papers, and the framers of the constitution, before arriving at the conclusion that it is impermissible for a state to charge tax on transactions in other states.

If you are a florist in Florida, and the Department has tried to extort money from you on your out of state sales, be informed of the law. American Business USA has changed the way the rule can be enforced in the Fourth District of Florida. If the Department is enforcing this law in other parts of Florida, it is still up to interpretation, but the opinion here makes it pretty clear that this law should not be used against florists.

Hat's off to Carlton Fields's David Esau as lead attorney on this appeal. This is yet another example of the state overreaching their bounds. It is up to Taxpayers to stand up for their rights when they feel they are being unfairly assessed, and American Business USA Corp should be applauded for doing just that.

**Update: In December 2014, the State of Florida filed a Notice of Appeal to the Florida Supreme Court for this case. The Department's position is the 4th DCA of Florida "misapprehended decades of Commerce Clause jurisprudence" and requests that the Florida Supreme Court vacate the judgment against it.

At the Law Office of the Law Offices of Moffa, Sutton, & Donnini, P.A., our primary practice area is Florida tax controversy. We have been defending clients against the Florida Department of Revenue since 1991. In fact, the vast majority of our practice relates to Florida sales and use tax controversy. Our partners are both CPAs and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We understand the big picture of all sides of your Florida sales tax situation because we handle not only audits, protests, and controversy but also collections, revocations, and the criminal defense sides of Florida sales tax controversy. We represent taxpayers and business owners from the entire state of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help.

Jerry Donnini; Donnini Attorney; Florida Sales Tax Attorney; Fort Lauderdale sales tax attorney

About 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 Florida sales tax, along multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of alcohol, cigarette & tobacco wholesale tax, Florida motor fuel tax, and Native American taxation. Mr. Donnini earned his LL.M. in Taxation at NYU.

Amanda Levine

About the author: Ms. Levine is an associate attorney with the Law Offices of Moffa, Sutton, & Donnini, P.A. Her primary practice area is Florida sales and use tax controversy. Ms. Levine received a B.S. in Accounting from University of Central Florida. She spent several years working in public accounting before attending Nova Southeastern University Law School. She received her J.D. in 2014. During her time at Nova Law, Ms. Levine was the Executive Justice of Academics for the Moot Court Honor Society, as well as the Finance Chair. She was awarded by the National Order of the Barrister, a national honor society which encourages oral advocacy and brief writing skills.


American Business USA Corp v FL DOR, DOAH Case # 12-2527, Final Order dated March 29, 2013

American Business USA Corp v FL DOR, FL 4th DCA, Appellant Brief

American Business USA Corp v. FL DOR, FL 4th DCA, Appellee Answer Brief

American Business USA Corp v FL DOR, Case # 4D13-1472, FL 4th DCA, decided Nov. 12, 2014