Sales and Use Tax TAA 17A-008 Credit Reporting Services
QUESTION: ARE TAXPAYER’S CHARGES TO ITS CUSTOMERS FOR CREDIT REPORTING SERVICES
SUBJECT TO FLORIDA SALES AND USE TAX?
ANSWER: TAXPAYER’S SEPARATELY STATED MONTHLY CHARGES, TO ITS CUSTOMERS,
FOR CREDIT REPORTING SERVICES, ARE NOT SUBJECT TO TAX UNDER THE PROVISIONS
OF S. 212.05(1)(I)1., F.S., AND RULE 12A-1.0092(2)(C)1., F.A.C.
TAXPAYER’S SEPARATELY STATED MONTHLY CHARGES, TO ITS CUSTOMERS,
FOR CREDIT REPORTING SERVICES, WHICH ARE PROVIDED ELECTRONICALLY TO CUSTOMERS,
ARE NOT SUBJECT TO SALES TAX UNDER THE PROVISIONS OF RULE 12A1.062(5), F.A.C.
March 3, 2017
Re: Technical Assistance Advisement 17A-008
XXXX (“Taxpayer”)
Florida Sales and Use Tax
Credit Reporting Services
Sections 212.02(19), 212.05, 212.055, Florida Statute (F.S.)
Rules 12A-1.0092(2)(c)1., 12A-1.062(5), Florida Administrative Code (F.A.C.)
BP#: XXXX
Dear XXXX:
This letter is in response to your request dated XXXX, and received in
this office on XXXX, for issuance of a Technical Assistance Advisement
(“TAA”) pursuant to Section 213.22, F.S., and Rule Chapter
12-11, F.A.C., concerning the taxability of credit reporting services.
An examination of your request has established you complied with the statutory
and regulatory requirements for issuance of a TAA. Therefore, the Department
is hereby granting your request for a TAA.
FACTS PRESENTED
Taxpayer is registered as a Florida sales and use tax dealer. It delivers
integration and related services to all dealer system providers and finance
sources that serve automobile and truck retailers, power sports and recreational
vehicles. Among the services Taxpayer provides to its customers are credit
reporting services. These services are provided electronically. Taxpayer
currently collects and remits sales tax on its customers’ purchases
of credit reporting services. Generally, a credit reporting service transaction
follows the below workflow:
1. Taxpayer’s customer requests a credit check for a potential buyer
seeking financing for a vehicle purchase.
2. Taxpayer works with a third-party to coordinate the credit check service, or directly with one of the three largest credit reporting agencies, to finalize the credit report for each request that is submitted by Taxpayer’s customer.
3. The credit findings are transmitted to Taxpayer’s customer electronically.
4. Taxpayer documents all requests and invoices its customers on a regular basis (generally monthly). The credit reporting services are separately stated on each invoice.
5. Taxpayer charges and collects Florida sales tax on its invoices for
credit reporting services. This tax is remitted on its monthly Florida
sales and use tax returns.
REQUESTED ADVISEMENT
Are Taxpayer’s charges to its customers for credit reporting services
subject to Florida sales and use tax?
APPLICABLE LAW
Unless a specific exemption applies, s. 212.05, F.S., provides it is the
legislative intent that every person is exercising a taxable privilege
that engages in the business of selling or repairing tangible personal
property1 in this state. For exercising such a privilege, a tax is levied
on each taxable transaction or incident. The tax is due and payable at
the rate of 6 percent, plus any applicable surtaxes imposed under s. 212.055,
F.S., on the total consideration received for each item or article of
tangible personal property when sold at retail or repaired in this state.
Exemptions from tax are strictly construed against the claimant.
Wanda Marine Corp. v. Dep’t of Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA 1975).
Detective, Burglar Protection, and Other Protection Services
Section 212.05(1)(i)1., F.S., provides that detective, burglar protection,
and other protection services classified under NAICS2 National Numbers
561611, 561612, 561613, and 561621, are subject to sales tax. However,
Rule 12A-1.0092(2)(c)1., F.A.C., explicitly provides that credit reporting
services, when performed by detectives, private investigators, or others
are not subject to tax when freestanding, or when separately stated on
an invoice given to a purchaser which includes taxable services.
As specified and referenced above, Taxpayer’s separately stated
monthly charges, to its customers, for credit reporting services are not
subject to tax under the provisions of s. 212.05(1)(i)1., F.S., and Rule
12A-1.0092(2)(c)1., F.A.C.
Information Services
Rule 12A-1.062(5), F.A.C., specifically provides that the charge for furnishing
information by way of electronic images which appear on the subscriber’s
video display screen does not constitute a sale of tangible personal property
nor does it constitute the sale of a taxable information service.
As specified and referenced above, Taxpayer’s separately stated
monthly charges, to its customers, for credit reporting services, which
are provided electronically to customers, are not subject to sales tax
under the provisions of Rule 12A-1.062(5), F.A.C.
For more information concerning all of the taxes administered by the Department
of Revenue, please refer to the Department’s Internet site at:
www.floridarevenue.com
This response constitutes a Technical Assistance Advisement under s. 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 s. 213.22, F.S.
Our response is predicated on 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 than expressed in this response.
You are further advised that this response and 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 s. 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 15 days of the date of this letter.
Kind Regards,
Alan R. Fulton
Tax Law Specialist
Technical Assistance & Dispute Resolution
850-717-6735
End Notes
1 Tangible personal property means and includes personal property which may be seen, weighed, measured, or touched or is in any manner perceptible to the senses. See s. 212.02(19), F.S.
2 "NAICS" means those classifications contained in the North American Industry Classification System, as published in 2007 by the Office of Management and Budget, Executive Office of the President.