Sales and Use Tax TAA 12-025

QUESTION: Appropriate discretionary sales surtax rate when the item is delivered in one

county but used for multiple billing cycles in another county.

ANSWER: Discretionary sales surtax is due on rentals and leases of tangible personal property

based on the location where the customer received delivery of the property. The customer’s

subsequent removal of the property to a county with a different surtax rate does not affect the

surtax rate to be charged on additional rental payments. Taxpayer should charge tax to its

customers based on the taxpayer’s location where the customer picks up the scaffolding for the

duration of the rental of the scaffolding.

In each of taxpayer’s examples, the customer picks up the rented equipment at taxpayer’s

location. Discretionary sales surtax should be charged based on the rate of the county in which

the customer receives delivery of the equipment (taxpayer’s location) for the initial invoice, and

for subsequent billing cycles.

November 2, 2012

Re: Technical Assistance Advisement – TAA 12A-025

Discretionary Sales Surtax – Applicable County Rate

Subsection: 212.054, Florida Statutes (F.S.)

Rules: 12A-15.003, Florida Administrative Code (F.A.C.)

Petitioner: XXX[hereinafter “Taxpayer”]

Dear XXX:

This letter is a response to your petition dated XXX, for the Department's issuance of a Technical

Assistance Advisement ("TAA") concerning the above referenced party and matter. Your

petition has been carefully examined and the Department finds it to be in compliance with the

requisite criteria set forth in Chapter 12-11, Florida Administrative Code. This response to your

request constitutes a TAA and is issued to you under the authority of Section 213.22, F.S.

Issue

Appropriate discretionary sales surtax rate when the item is delivered in one county but used for

multiple billing cycles in another county.

Presented Facts

Taxpayer’s petition sets forth the following information:

[Taxpayer requests advice on] the proper calculation of taxes (state plus surtax) for rental

transactions when the customer picks up the equipment and takes it to a different taxing

jurisdiction. [Taxpayer is] requesting the proper calculation for the initial invoice and the

repeat invoices for the following rental periods. [Taxpayer] bill[s] on a 28 day cycle. . . .

For the following examples, [Taxpayer is] requesting details for calculating the proper

tax (state, [Florida and] surtax) on the initial invoice and repeat rental invoices that will

be billed for 28 day cycles for the duration of the rental period.

Example #1[.] Customer is renting scaffolding equipment. [Customer c]ame into

[Taxpayer’s] branch in Opa Locka (Hillsborough [C]ounty, 6% state, 1% county) and

picked up rental equipment. [Customer is] taking the equipment to Margate, [Florida]

(Broward [C]ounty, 6% state, no local/county) . . . .

Example[ ]#2[. C]ustomer is renting scaffolding equipment. [Customer c]ame into

[Taxpayer’s] branch in Opa Locka (Hillsborough [C]ounty, 6% state, 1% county) and

picked up rental equipment. [Customer is] taking the equipment to Hollywood, [Florida]

(Broward [C]ounty, 6% state, no local/county) . . . .

Example[ ]#3[.] Customer is renting scaffolding equipment. [Customer c]ame to

[Taxpayer’s] Jacksonville (Duval [C]ounty, 6% state, 1% county) and picked up rental

equipment. [Customer is] taking the equipment to Ponte Vedra, [Florida] (St[.] John[s

C]ounty, 6% state, no local/county) . . . .

Applicable Authority

The term “sale” is defined to include the lease, rental, or license to use tangible personal

property. See Section 212.02(15), Florida Statutes.

Section 212.054, Florida Statutes, states in pertinent part as follows:

(3) For the purpose of this section, a transaction shall be deemed to have occurred in a

county imposing the surtax when:

(a)1. The sale includes an item of tangible personal property, a service, or tangible

personal property representing a service, and the item of tangible personal property, the

service, or the tangible personal property representing the service is delivered within the

county. . . . (Emphasis Supplied)

Rule 12A-15.003(4), Florida Administrative Code, states in pertinent part as follows:

(4) SALES OF TANGIBLE PERSONAL PROPERTY.

(a) A dealer who makes sales of tangible personal property is required to collect surtax

when the taxable item of tangible personal property is delivered within a surtax county.

The dealer is required to collect surtax at the rate imposed by the county where the

delivery occurs, whether the delivery is made directly by the dealer or by a manufacturer

or wholesaler who delivers the property to the purchaser on behalf of the dealer. When

the item of tangible personal property is delivered within a county not imposing a surtax,

the dealer is not required to collect surtax. . . .

Discussion and Response

Discretionary sales surtax is due on rentals and leases of tangible personal property based on the

location that the customer received delivery of the property. The customer’s subsequent removal

of the property to a county with a different surtax rate does not affect the surtax rate to be

charged on additional rental payments. Taxpayer should charge tax to its customers based on the

Taxpayer’s location where the customer picks up the scaffolding for the duration of the rental of

the scaffolding.

In each of Taxpayer’s examples, the customer picks up the rented equipment at Taxpayer’s

location. Discretionary sales surtax should be charged based on the rate of the county in which

the customer receives delivery of the equipment (Taxpayer’s location) for the initial invoice, and

for subsequent billing cycles.

Closing Statement

This response constitutes a Technical Assistance Advisement under Section 213.22, F.S., which

is binding on the Department only under the facts and circumstances described in the request for

this advice, as specified in Section 213.22, F.S. Our response is predicated upon those facts and

the specific situation summarized above. You are advised that subsequent statutory or

administrative rule changes or judicial interpretations of the statutes or rules upon which this

advice is based may subject similar future transactions to a different treatment from that which is

expressed in this response.

You are further advised that this response, your request, and related backup documents are public

records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions

of Section 213.22, F.S. Confidential information must be deleted before public disclosure. In an

effort to protect confidentiality, we request you provide the undersigned with an edited copy of

your request for Technical Assistance Advisement, the backup material and this response,

deleting names, addresses, and any other details which might lead to identification of the

taxpayer. Your response should be received by the Department within 10 days of the date of this

letter.

Sincerely,

Sara D. Faulkenberry

Senior Tax Specialist

Technical Assistance and Dispute Resolution

Control # 132938