Was an out-of-state buyer's Florida auction purchase exempt as a sale for export?

Plain-English summary

The Department ruled that the out-of-state purchaser's three Florida auction purchases qualified as exempt sales for export. Although the auction terms were generally "as is, where is," they allowed an export exemption when goods were delivered to and shipped by a common carrier.

The purchaser arranged for common carriers to pick up all three items directly from the auctioneer's Florida site and deliver them outside Florida. The buyer did not take possession in Florida, so the goods entered a continuous and unbroken export process at the time of sale.

The auctioneer was required to retain records proving the export, such as common-carrier receipts, bills of lading, or similar documents showing the destination.

What this means for you

An out-of-state intention alone is not enough, especially when the buyer is physically present at a Florida sale. The sales terms, direct carrier pickup before buyer possession, uninterrupted shipment, and documentary proof all supported this exemption.

Common questions

Did the buyer's physical presence at the auction defeat the exemption? No, but it created a presumption of Florida delivery that the export facts had to rebut.

Could the buyer first take possession in Florida and then ship the items out? That was not the approved fact pattern; the carriers took possession at the auction site before the buyer did.

What records did the auctioneer need? Records such as carrier receipts or bills of lading identifying the goods and out-of-state destination.

Citations and references

• Fla. Stat. §§ 212.05 and 212.06(5) and Fla. Admin. Code r. 12A-1.0015, as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-050

Original ruling text

SUMMARY
QUESTION:
Is Taxpayer’s purchase from Auctioneer exempt from sales tax as a purchase for export?
ANSWER:
Yes, the facts presented are that Taxpayer did contract to have common carriers come
and pick up all three items from Auctioneer’s site, then deliver the items to Taxpayer
outside of Florida. Therefore, Taxpayer met the requirements for an exempt sale for
export under the Auction Terms and statute requiring that the tangible personal property
be delivered to a common carrier and shipped out of Florida before possession.
October 2, 2009
XXX
Re:

Technical Assistance Advisement 09A-050
Sale for Export
Sales and Use Tax
Sections 212.05, 212.06, Florida Statutes (F.S.)
Rule 12A-1.0015, Florida Administrative Code (F.A.C.)
XXX (“Taxpayer”)
FEIN: XXX
XXX (“Auctioneer”)
FEIN: XXX

Dear XXX:
This is in response to your letter dated August 19, 2009, requesting this Department’s
issuance of a Technical Assistance Advisement (TAA) pursuant to section 213.22, F.S.,
and Rule Chapter 12-11, F.A.C., regarding the above referenced matter and party. An
examination of your letter has established that you have complied with the statutory and
regulatory requirements for issuance of a TAA. Therefore, the Department is hereby
granting your request for a TAA.
FACTS
On May 27, 2009, Taxpayer purchased three items from Auctioneer in XXX, Florida.
Invoice No. XXX provides:
Description: The following items “as is” and “where is” as per our
Auction Terms of sale.

Lot XXX XXX XXX XXX XXX [(“Item 1”)]
Lot XXX XXX XXX XXX XXX XXX [(“Item 2”)]
Lot XXX XXX XXX XXX XXX [(“Item 3”)]
The Auction Terms of sale provide in part:

21. If Purchaser claims an exemption based on goods being shipped out of
    state for use out of state, then the goods must be delivered to and shipped
    by a common carrier. Purchaser shall arrange for and assume all risks and
    costs associated therewith.

Taxpayer contracted with XXX XXX XXX XXX to ship Items 1 and 2 from Auctioneer
to Taxpayer in XXX, XXX on June 3, 2009.
Taxpayer contracted with XXX XXX XXX to ship Item 3 from Auctioneer to Taxpayer
in XXX, XXX. Item 3 was picked up in Florida on June 1, 2009 and delivered outside of
Florida on June 2, 2009.
ISSUE
Is Taxpayer’s purchase from Auctioneer exempt from sales tax as a purchase for export?
TAXPAYER POSITION
Taxpayer questions if Florida sales and use tax was property charged by Auctioneer.
Taxpayer is concerned that its home state would require tax on these items, thus leading
to double taxation.
APPLICABLE LAW
Section 212.05, F.S., provides, in part:
It is hereby declared to be the legislative intent that every person is
exercising a taxable privilege who engages in the business of selling
tangible personal property at retail in this state ….
(1) For the exercise of such privilege, a tax is levied on each taxable
transaction or incident, which tax is due and payable as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of
tangible personal property when sold at retail in this state, computed on
each taxable sale for the purpose of remitting the amount of tax due the
state, and including each and every retail sale.

Section 212.06(5)(a)1., F.S., provides, in part:
Except as provided in subparagraph 2., it is not the intention of this
chapter to levy a tax upon tangible personal property imported, produced,
or manufactured in this state for export, provided that tangible personal
property may not be considered as being imported, produced, or
manufactured for export unless the importer, producer, or manufacturer
delivers the same to a licensed exporter for exporting or to a common
carrier for shipment outside the state or mails the same by United States
mail to a destination outside the state …. Every retail sale made to a
person physically present at the time of sale shall be presumed to have
been delivered in this state.
Rule 12A-1.0015(2), F.A.C., provides, in part:
(2)(a) A dealer is required to collect tax on sales of tangible personal
property when the property is delivered to the purchaser or the purchaser's
representative in Florida, whether the disclosed or undisclosed intention of
the purchaser is to transport the property to a location outside Florida, or
whether the property is actually so transported. Every sale of tangible
personal property to a person physically present at the time of sale is
presumed to have been delivered in Florida.
(b) When a dealer sells tangible personal property, commits the property
to the exportation process at the time of sale, and the exportation process
remains continuous and unbroken until the property is exported from
Florida, the dealer is not required to collect tax. The intent of the seller and
the Dealer to export the property is not sufficient to establish that the
property is not subject to tax in Florida. The delivery of the property to a
location in Florida for subsequent export from Florida is insufficient to
establish documentary evidence that the property sold was irrevocably
committed to the exportation process….

(c) Any dealer who makes tax-exempt sales of tangible personal property
for export outside Florida is required to maintain records to document that
the property is committed to the exportation process at the time of sale and
that the exportation process is continuous and unbroken until the property
is exported from Florida. The dealer is required to maintain records that
identify the tangible personal property sold and the delivery destination of
the property. The documentation must clearly establish that the property
was not commingled with the mass of property within Florida….
Examples of records to document sales for export to points outside Florida
are:

1. Internal delivery orders identifying the property sold and the destination
and date of delivery that are supported by receipts of expenses incurred in

delivering the property, such as trip tickets or truck logs signed by the
person who delivers the property;

3. Common carriers' receipts, bills of lading, or similar documentation that
   evidences the delivery destination;

(e) Regardless of the evidence maintained by the dealer to document
delivery of the property to a common carrier or a licensed customs broker
for shipment to a location outside Florida, or the mailing of the property
by the United States mail to a location outside Florida, tax is due when the
property is diverted in transit to the Dealer or the Dealer's agent or
representative in Florida and such person takes possession in Florida, or
when for any other reason the property is not delivered outside Florida.

DISCUSSION AND RESPONSE
Florida law provides that every person is exercising a taxable privilege who engages in
the business of selling tangible personal property at retail in Florida. Retail sales of
tangible personal property are subject to tax, unless specifically exempt by Chapter 212,
F.S. See s. 212.05(1)(a)1.a., F.S.
If Taxpayer purchases items for its own use in Florida, then Florida sales or use tax is due
on the price of those items. However, if Taxpayer purchases items for use in another
state, then these purchases may qualify as exempt sales for export. Section
212.06(5)(a)1., F.S., and Rule 12A-1.0015(1)(a), F.A.C., provide an export exemption
from the sales tax for dealers who sell items to customers (either retailers or end users)
located outside Florida, when such items will be delivered to the customers’ locations
outside this state.
Both the Section and Rule also provide that when the purchaser is physically present at
the time of sale shall be presumed to have been delivered in Florida. Here, Taxpayer was
physically present at the sale in Florida. Therefore, Taxpayer must rebut this
presumption.
The exemption provisions indicate that a seller is not required to collect and remit tax to
the Department when the seller is required by the terms of the sales contract to deliver the
item:
▪ to a licensed exporter for exporting;
▪ to a common carrier or forwarding agent for shipment outside Florida;

▪ to the U.S. mail for mailing to a destination outside Florida; or
▪ using its own mode of transportation to a destination outside Florida.
Here, the terms of the contract were “as is, where is” which assumes that the delivery
point is at the auction site in Florida. However, the terms of the contract further provided
that if the goods were delivered to and shipped by a common carrier then the purchaser
may claim the export exemption. This language in the contract evidences that Auctioneer
will allow exempt sales for export under specific circumstances.
The facts presented are that Taxpayer did contract to have common carriers come and
pick up all three items from Auctioneer’s site then deliver the items to Taxpayer outside
of Florida. Therefore, Taxpayer met the requirements for an exempt sale for export under
the Auction Terms and statute requiring that the tangible personal property be delivered
to a common carrier and shipped out of Florida before possession.
To enjoy the protection of the exemption, Auctioneer is required to keep sufficient
records to document that the supplies were exported outside Florida in a continuous and
unbroken exportation process, such as the nonexhaustive list of examples provided in
Rule 12A-1.0015(2)(c), F.A.C. Examples of records to document sales for export to
points outside Florida include common carriers’ receipts, bills of lading, or similar
documentation that evidences the delivery destination, receipts from a licensed customs
broker, and proof of export signed by a customs officer.
CONCLUSION
Taxpayer’s purchase of tangible personal property from Auctioneer for export to a
location outside this state are not subject to Florida sales tax, because the sales conform
to the requirements of s. 212.06(5), F.S., and Rule 12A-1.0015, F.A.C.
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
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

Technical Assistance Advisement
Page 6 of 6
lead to identification of the taxpayer. Your response should be received by the
Department within 15 days of the date of this letter.
Sincerely,

H. French Brown, IV
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922-4708
HFB/
Ctrl# 70104