Did Florida severance tax apply to processed clay sold for further processing and later sales under Chapter 212?

Plain-English summary

Florida found no solid-mineral severance tax due on the corporation's processed clay products because they were sold for further processing under Chapter 212.

The company mined and processed several clays in Florida and sold them to purchasers taking delivery both inside and outside the state. The products were used as oil and grease absorbent, cat litter, carriers for herbicides and fertilizers, suspension agents for animal feed, and ingredients in asphalt and paint.

Section 211.3108 listed several exemptions for solid minerals other than phosphate rock and heavy minerals, including minerals on which Florida sales tax was ultimately paid. Applying that provision, the Department exempted the described production.

What this means for you

The result was tied to the particular mineral and downstream Chapter 212 treatment. It was not a blanket exemption for all Florida mining.

Common questions

Q: Did delivery location alone control the exemption? No. Purchasers took delivery both within and outside Florida.

Q: Which mineral was involved? Various processed clays.

Q: Did the ruling cover phosphate rock or heavy minerals? No. The cited statute excluded those from the described solid-mineral exemptions.

Citations and references

• Fla. Stat. § 211.3108 — solid-mineral severance-tax exemptions
• Florida Statutes Chapter 212 — sales and use tax provisions referenced by the ruling
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00B7-001

Original ruling text

Jan 04, 2000

Re: Technical Assistance Advisement 00(B)7-001
Severance Tax - Solid Minerals - Exemption
Section 211.3108, F.S.
Solid Minerals Exempt From Tax
XXX (Corporation)

Dear

This office has received your letter requesting a Technical
Assistance Advisement exempting Corporation from Florida's
severance tax on solid minerals.

Your request for exemption is based upon the following
information:

Corporation mines and processes various clays in Florida.
This product is then sold by Corporation to various
purchasers, some of whom accept delivery of the product in
Florida, and some of whom accept delivery outside of
Florida. Thereafter, some of Corporation's product is
resold in sales subject to Florida's sales and use tax law.
Corporation's processed product is sold for use as an oil
and grease absorbent, as cat litter, as a carrier for
herbicides and as fertilizers, as a suspension agent for
animal feed and in asphalt and paint.

Section 211.3108, F.S., provides an exemption from tax for
solid minerals, except phosphate rock and heavy minerals, which
are: 1) sold to governmental agencies in this state; or 2) upon
which a sales tax is ultimately paid to the state under the
provisions of Chapter 212, F.S.; or 3) extracted by the owner of
the site of severance for the purpose of improving the site; or
4) severed solely for direct application in agricultural use.
Applying these exemptions to the information provided on the
Corporation's mining operation in Florida, no severance tax is
due on the minerals produced. The product which is sold, is
sold for further processing under the provisions of Chapter 212,

F.S., and is exempt from severance tax.

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
are public records under Chapter 119, F.S., which are subject to
disclosure to the public under the conditions of s. 213.22, F.S.
Your name, address, and any other details which might lead to
identification of the taxpayer must be deleted by the Department
before disclosure. In an effort to protect the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

J.V. Parramore, Jr.
Technical Assistant
Technical Assistance

JVP/mh