Was a vehicle transfer from a single-member LLC to its owner taxable when the owner registered the vehicle in Florida?

Plain-English summary

The sole owner of a Pennsylvania LLC wanted to transfer an LLC-owned vehicle into the owner's personal name and register it in Florida. The owner argued that because the LLC was disregarded for federal income-tax purposes, the transfer should not be treated as a transfer between separate persons.

Florida disagreed under the statutes cited in the 2007 advisement. A single-member LLC disregarded for federal income tax was still treated as a separate legal entity for non-income-tax purposes. The owner and LLC were therefore distinct persons for this sales-tax analysis.

The title transfer was taxable when the vehicle was registered in Florida. The cited rule also presumed that consideration flowed from the owner to the LLC; when no consideration was stated, the presumed amount was the vehicle's fair market value.

What this means for you

Income-tax disregarded status did not erase the LLC's separate legal identity for this vehicle-title transaction. A transfer from an entity to its owner can be taxable even when the same individual ultimately controls both sides.

Common questions

Was the transfer exempt because the taxpayer was the LLC's sole owner? No.

Did federal disregarded-entity treatment control the Florida sales-tax result? No. The ruling applied a Florida statute treating the LLC as separate for non-income-tax purposes.

What amount was presumed if no consideration was stated? The vehicle's fair market value.

When did the tax issue arise? When title moved from the LLC to the individual and the vehicle was registered in Florida.

Citations and references

• Fla. Stat. § 212.06(10) (motor-vehicle title transfers and registration)
• Fla. Admin. Code r. 12A-1.007(25)(d) (presumed consideration and fair market value)
• Fla. Stat. § 608.471(3) (single-member LLC treatment for non-income-tax purposes)
• Fla. Stat. §§ 608.4227, 608.4228, and 608.4229 (LLC liability protections discussed in the ruling)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 07A-047

Original ruling text

SUMMARY
QUESTION: Is the transfer of a vehicle from an LLC to an individual in Florida exempt from
Florida sales tax?
ANSWER: The transfer of a vehicle from an LLC to an individual in Florida is subject to Florida
sales tax.

December 28, 2007
XXX
XXX
XXX
Re:

Technical Assistance Advisement 07A-047
Sales and Use Tax – Vehicle title transfer
Section 212.06, Florida Statutes [F.S.]
Section 608.471, F.S.
Section 608.4227, F.S.
Section 608.4228, F.S.
Section 608.4229, F.S.
Rule 12A-1.007, Florida Administrative Code [F.A.C.]
XXX [the taxpayer]
XXX [the LLC]

Dear :
This is a response to your email of December 11, 2007, requesting a Technical Assistance
Advisement (TAA) regarding the above-referenced matter. This response to your request constitutes
a TAA under Chapter 12-11, Florida Administrative Code (F.A.C.), and is issued to you under the
authority of Section 213.22, Florida Statutes (F.S.).

ISSUE
Whether the transfer of a vehicle from an LLC to an individual in Florida is exempt from Florida
sales tax.
FACTS

The taxpayer is the sole owner of a limited liability company [the LLC] that is registered in
Pennsylvania. The taxpayer wishes to transfer a motor vehicle owned by the LLC into the
taxpayer’s personal name. The taxpayer will then register the vehicle in his name in Florida.
REQUESTED ADVISEMENT
The taxpayer requests that the Department issue a TAA stating that the transfer of a vehicle from an
LLC to an individual in Florida is exempt from Florida sales tax.
TAXPAYER’S POSITION
The taxpayer states in his email of December 11, 2007:
… Florida does not specify anything in particular dealing with an LLC[,] only full
corporations which an LLC is not. Tax filing for an LLC is done on one[‘]s own
personal income tax form using a schedule C[,] and as such the Federal government
recognizes any property owned by the LLC as property owned by myself personally.
They are not two separate identities for tax purposes and as such should be the same
within the State of Florida as it is within the Commonwealth of Pennsylvania.
APPLICABLE LAW
Section 212.06(10), F.S., provides, in part:
No title certificate may be issued on any … motor vehicle, or other vehicle, or, if no
title is required by law, no license or registration may be issued for any … motor
vehicle, or other vehicle, unless there is filed with such application for title certificate
or license or registration certificate a receipt, issued by an authorized dealer or a
designated agent of the Department of Revenue, evidencing the payment of the tax
imposed by this chapter where the same is payable. A presumption of sales and use
tax applicability is created if the motor vehicle is registered in this state…. All
transfers of title to … motor vehicles, and other vehicles are taxable transactions,
unless expressly exempt under this chapter. (emphasis supplied)
Rule 12A-1.007(25)(d), F.A.C., provides, in part:
When title to [a] … motor vehicle, or other vehicle of a class or type required to be
registered, licensed, titled, or documented in this state or by the United States
Government is transferred from an individual, who may or may not be a stockholder,
to a corporation, or from a corporation to an individual who may or may not be a
stockholder, or from one corporation to another, or from a partnership to a
corporation, or from a corporation to a partnership, it is presumed that a
consideration flows from the transferee to the transferor, and if no consideration is
stated, then it shall be presumed to be the fair market value of the vehicle….
Section 608.471(3), F.S., provides, in part:

Single-member limited liability companies and other entities that are disregarded for
federal income tax purposes must be treated as separate legal entities for all nonincome-tax purposes….
Section 608.4227(1), F.S., provides:
Except as provided in this chapter, the members, managers, and managing members
of a limited liability company are not liable, solely by reason of being a member or
serving as a manager or managing member, under a judgment, decree, or order of a
court, or in any other manner, for a debt, obligation, or liability of the limited liability
company;
Section 608.4228(1), F.S., provides:
A manager or a managing member shall not be personally liable for monetary
damages to the limited liability company, its members, or any other person for any
statement, vote, decision, or failure to act regarding management or policy decisions
by a manager or a managing member, unless:
(a) The manager or managing member breached or failed to perform the duties as a
manager or managing member; and
(b) The manager's or managing member's breach of, or failure to perform, those
duties constitutes any of the following:

1. A violation of the criminal law, unless the manager or managing member had a
   reasonable cause to believe his or her conduct was lawful or had no reasonable cause
   to believe such conduct was unlawful. A judgment or other final adjudication against
   a manager or managing member in any criminal proceeding for a violation of the
   criminal law estops that manager or managing member from contesting the fact that
   such breach, or failure to perform, constitutes a violation of the criminal law, but
   does not estop the manager or managing member from establishing that he or she had
   reasonable cause to believe that his or her conduct was lawful or had no reasonable
   cause to believe that such conduct was unlawful.
2. A transaction from which the manager or managing member derived an improper
   personal benefit, either directly or indirectly.
3. A distribution in violation of s. 608.426.
4. In a proceeding by or in the right of the limited liability company to procure a
   judgment in its favor or by or in the right of a member, conscious disregard of the
   best interest of the limited liability company, or willful misconduct.
5. In a proceeding by or in the right of someone other than the limited liability
   company or a member, recklessness or an act or omission which was committed in

bad faith or with malicious purpose or in a manner exhibiting wanton and willful
disregard of human rights, safety, or property.
Section 608.4229(1), F.S., provides:
Subject to such standards and restrictions, if any, as are set forth in its articles of
organization or operating agreement, a limited liability company may, and shall have
the power to, but shall not be required to, indemnify and hold harmless any member
or manager or other person from and against any and all claims and demands
whatsoever.
DISCUSSION AND RESPONSE
Section 212.06(10), F.S., provides that all transfers of title to motor vehicles in the state of Florida
are taxable, unless specifically exempt under Chapter 212, F.S. Rule 12A-1.007(25)(d), F.A.C.,
provides that when title to a motor vehicle of a class or type required to be registered in Florida is
transferred from a corporation to an individual, it is presumed that a consideration flows from the
transferee to the transferor. If no consideration is stated in the transaction, then it is presumed that
the consideration equals the fair market value of the vehicle.
A transfer from a corporation to an individual is taxable, because the corporation exists
independently from its members and directors and protects these individuals from liability. See, for
example, s. 607.0831(1), F.S. Accordingly, the transfer of a vehicle from a corporation to a director
of the corporation is a transfer of property between two distinct persons. See s. 212.02(12), F.S.
The taxpayer attempts to distinguish between a transfer made by a corporation and a similar transfer
made by an LLC by arguing that a single-member LLC and its owner “are not two separate identities
for tax purposes and as such should be the same within the State of Florida as it is within the
Commonwealth of Pennsylvania.” The taxpayer states that “[t]ax filing for an LLC is done on
one[‘]s own personal income tax form using a schedule C[,] and as such the Federal government
recognizes any property owned by the LLC as property owned by myself personally.” However, the
taxpayer’s belief is misplaced. A single-member limited liability company that is disregarded as an
entity separate from its owner for federal income tax purposes is treated as a separate legal entity for
all non-income-tax purposes under Florida law. See s. 608.471(3), F.S. Moreover, a member or
manager of an LLC receives the same protections under Chapter 608, F.S., that are afforded to a
director of a corporation under Chapter 607, F.S.
For example, s. 608.4227(1), F.S., provides that the members, managers, and managing members of
an LLC are not liable, solely by reason of being a member or serving as a manager or managing
member, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation,
or liability of the LLC. Section 608.4228(1), F.S., provides that a manager or managing member of
an LLC is not personally liable for monetary damages to the LLC, its members, or any other person
for any statement, vote, decision, or failure to act regarding management or policy decisions by a
manager or a managing member, unless the manager or managing member breaches or fails to
perform his or her duties as a manager or managing member, and the manager’s or managing
member’s breach of, or failure to perform, those duties constitutes one of the violations listed in s.

607.4228(1)(b), F.S. Section 608.4229(1), F.S., provides that an LLC has the power to indemnify
and hold harmless any member or manager from and against any and all claims and demands
whatsoever.
Florida law considers the taxpayer to be a separate person from the LLC that he owns and manages.
Consequently, when the taxpayer transfers a vehicle, owned by his LLC, into his personal name, the
taxpayer must pay Florida sales tax when the vehicle is registered in Florida. See Rule 12A1.007(25)(d), F.A.C., and s. 212.06(10), F.S.
CONCLUSION
The transfer of a vehicle from an LLC to an individual in Florida is subject to Florida sales 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, 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.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850) 488-8565.
Sincerely,
Matt Crockett
Senior Tax Specialist
Technical Assistance & Dispute Resolution
Record ID: 39089