How did Florida source twelve categories of printed-product, licensing, online-data, conversion, and administration receipts?

Plain-English summary

The Florida Department of Revenue provided sales-factor sourcing rules for twelve categories of a taxpayer's receipts.

Printed materials were Florida sales when delivered or shipped to a Florida purchaser. Licensing revenue from proprietary intangible assets was sourced to Florida when the licensed customer was in Florida, provided the royalty income was significant.

Products and services delivered through the taxpayer's online database or interactive network were Florida sales when the customer was in Florida. The same customer-location result applied to email submissions, data-conversion services, and the two categories of plan-administration services described in the ruling.

What this means for you

Companies with mixed revenue streams

Do not apply one sourcing method across every product. Separate tangible deliveries, intangible licensing, database access, email services, conversion work, and administration services.

Corporate tax teams

Maintain customer-location and delivery records by revenue category. The licensing conclusion also carried the ruling's condition that royalty income be significant.

Common questions

Q: How were printed materials sourced?
A: By delivery or shipment to the purchaser.

Q: How were the listed online and service receipts sourced?
A: Generally by whether the customer was located in Florida.

Q: Did proprietary-license receipts have an additional condition?
A: Yes. The ruling specified that the royalty income be significant.

Citations and references

• Fla. Stat. §§ 220.15(5)(b)1. and 213.22
• Fla. Admin. Code r. 12C-1.0155(1)(a), (1)(f), (2)(h), and (2)(l)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 13C1-007

Original ruling text

Executive Director
Marshall Stranburg

QUESTION: WHETHER TAXPAYER’S GROSS RECEIPTS EARNED FROM THE ABOVE
MENTIONED REVENUE CATEGORIES SHOULD BE SOURCED TO FLORIDA.
ANSWER:
REVENUE CATEGORY 1: THIS CONSISTS OF REVENUES FROM SALES OF PRINTED
MATERIALS. PURSUANT TO S. 220.15(5)(b)1., F.S., AND RULE 12C-10155(1)(a), F.A.C.,
THESE REVENUES SHOULD BE TREATED AS FLORIDA SALES IF THE PROPERTY IS
DELIVERED OR SHIPPED TO A PURCHASER IN FLORIDA.
REVENUE CATEGORY 2: THIS CONSISTS OF REVENUES FROM THE LICENSING OF
PROPRIETARY INTANGIBLE ASSETS. PURSUANT TO RULES 12C-1.0155(1)(f)1., F.A.C.,
THESE REVENUES SHOULD BE TREATED AS FLORIDA SALES IF THE UNDERLYING
INTANGIBLE ASSET IS LICENSED TO A CUSTOMER LOCATED IN FLORIDA, PROVIDED
THAT THE ROYALTY INCOME IS SIGNIFICANT.
REVENUE CATEGORY 3 – 9: THESE CONSIST OF REVENUES FROM PRODUCTS AND
SERVICES DELIVERED (OR IN SOME CASES SUBMITTED) VIA THE INTERNET TO
TAXPAYER’S ONLINE DATABASE OR INTERACTIVE NETWORK. PURSUANT TO RULE
12C-1.0155(2)(h)5.A., F.A.C., THESE REVENUES SHOULD BE TREATED AS FLORIDA SALES
IF THE CUSTOMER IS LOCATED IN FLORIDA. IF THE PRODUCTS AND SERVICES ARE
SUBMITTED VIA EMAIL, THE SALE WILL BE SOURCED PURSUANT RULE 12C1.0155(2)(l), F.A.C., IF THE CUSTOMER IS LOCATED IN FLORIDA.
REVENUE CATEGORY 10: THIS CONSISTS OF REVENUES FOR CONVERSION OF DATA
INTO A FORMAT REQUIRED TO SATISFY DATA SUBMISSION REQUIREMENTS BY
TAXPAYER. PURSUANT TO RULE 112C-1.0155(2)(l), F.A.C., THESE REVENUES SHOULD
BE SOURCED TO FLORIDA IF THE CUSTOMER IS LOCATED IN FLORIDA.
REVENUE CATEGORY 11 AND 12: THESE CONSIST OF REVENUES FROM THE
ADMINISTRATION OF PREMIUM PLANS. PURSUANT TO RULE 12C-1.0155(2)(l), F.A.C.,
THESE REVENUES SHOULD BE SOURCED TO FLORIDA IF THE CUSTOMER IS LOCATED
IN FLORIDA.
Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Damu Kuttikrishnan, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement 13C1-007
Page 2

October 25, 2013
Re:

Technical Assistance Advisement 13C1-007
Taxpayer: XXX (“Taxpayer”)
FEIN: XXX
Corporate Income Tax
Income Calculation
Section (“s.”) 220.15, Florida Statutes (F.S.)
Rule 12C-1.0155, Florida Administrative Code (F.A.C.)

Dear XXX:
This is in response to your request dated XXX, for a Technical Assistance Advisement (“TAA”)
pursuant to s. 213.22, F.S., and Rule Chapter 12-11, F.A.C., regarding the gross receipts calculation
for Taxpayer. 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 SUPPLIED BY TAXPAYER
Taxpayer is a private corporation that is headquartered in XXX and incorporated in XXX. Taxpayer
serves the XXX industry by providing XXX, XXX 1, XXX and XXX information. Specifically,
Taxpayer collects, processes, and analyzes XXX and other information, provides XXX and XXX,
XXX and XXX by XXX, and performs XXX for XXX programs as more fully described below.
Taxpayer's primary customers consist of approximately XXX, XXX and XXX who XXX or XXX
against XXX ("Customers"). These Customers pay licensing fees that provide them with access to
many of Taxpayer's products and services used to XXX. Customers may elect to be a XXX or XXX of
Taxpayer. XXX pay an additional fee and participate in the ownership of Taxpayer. XXX have voting
and dissolution rights, and are eligible to be on the Board of Directors and Board Committees.
Approximately XXX are Taxpayer XXX. Since the Taxpayer is a XXX, all XXX must sign the same
agreement in order to ensure equity. Customers also supply Taxpayer with XXX that Taxpayer
collects, processes and analyzes to produce its products and services.
In addition to the Customers, Taxpayer provides XXX, information, and statistics to XXX, XXX,
XXX 2, XXX and XXX, XXX, and other XXX. Taxpayer also promulgates XXX and produces XXX3
worksheets for XXX for use by XXX, XXX and XXX which are used to adjust standard XXX based
on an employers XXX and XXX.
1

Loss costs refer to the portion of XXX that is allocated for the XXX, and not for XXX. XXX can use these loss costs as
the basis for their XXX, typically adjusting them for expenses with a loss cost multiplier.
2
XXX.
3
XXX.

Technical Assistance Advisement 13C1-007
Page 3
In addition to information and advisory services, Taxpayer authors and administers XXX 4 and XXX5
for XXX in nearly XXX. Taxpayer also administers XXX 6 and XXX 7 in numerous XXX.
Taxpayer's revenue is generated primarily from the XXX and XXX information, products, and
services. Many of the products, services and information provided by Taxpayer are available to
Customers by accessing Taxpayer’s XXX. Taxpayer's specific information and services offerings
include XXX and XXX 8, XXX 9 management, production of XXX, XXX, XXX, XXX (XXX), and
administration of XXX, including the development and maintenance of XXX, XXX, XXX, and XXX
forms. As stated above, many of the products, services, and information are available online, with
some XXX also offered in hardcopy format.
Receipts from sales of tangible personal property

1. XXX and other print publications (Hardcopy Versions)
   Although primarily offered online, Taxpayer also offers a number of publications in hardcopy. These
   materials constitute tangible personal property and are shipped to the Taxpayer’s customer.
   Receipts from licensing of intangible property
2. Royalty XXX
   Taxpayer royalties are earned from licensing agreements with third party customers, under which
   those customers are authorized to republish products utilizing Taxpayer's proprietary, intangible, and
   XXX-related information.
   Receipts from providing access to an interactive network
3. XXX Fees
   XXX fees are charged to Taxpayer Customers who choose to become a XXX of Taxpayer. XXX
   participate in the ownership of Taxpayer, have voting and dissolution rights, and are eligible to be on
   the Board of Directors and Board Committees.
   XXX fees are charged to all Taxpayer Customers. This license provides Customers with the right to
   access and use Taxpayer's XXX rules, guidelines and information, for the purpose of XXX.

4

XXX.
XXX.
6
XXX.
7
XXX.
8
XXX.
9
XXX.
5

Technical Assistance Advisement 13C1-007
Page 4

The XXX rules, guidelines and information made available to Taxpayer Customers upon payment of
the XXX fees are accessed via the internet through Taxpayer's website.

4. Data Management/Statistical Services - XXX
   Data Management and statistical services are the collection, management and validation of XXX
   provided by Taxpayer's customers as required by XXX. As noted above, Taxpayer collects, processes,
   and analyzes data from its customers to produce many of its products and services. This service is used
   mostly by Taxpayer Customers and is an integral and essential component of XXX with Taxpayer.
   Customers are required to provide this data, and pay for these data services, pursuant to their contract
   with Taxpayer.
5. XXX
   Taxpayer collects XXX from its customers, including notices of XXX. Taxpayer's XXX service
   consists of it reporting a position of XXX relating to the XXX, on behalf of its customers, to XXX,
   XXX and XXX that reflect XXX in that state. In addition, Taxpayer also provides XXX to the XXX
   on behalf of its customers. XXX information is made available and is accessed by XXX and XXX via
   the internet through Taxpayer's website, as well as by it providing a XXX to the states in certain
   instances.
6. XXX
   For each XXX employer, a XXX information worksheet is automatically produced and delivered to
   XXX approximately XXX to XXX. This XXX worksheet uses an XXX and compares it to XXX. The
   resulting XXX contained within the worksheet is used by the XXX to reflect the expected XXX. For
   many of Taxpayer’s customers, this worksheet is delivered by making it available via the internet
   through the Taxpayer's website. Under this delivery method, the customer is sent an email notification
   that the document is available by logging onto the Taxpayer website, where it can be downloaded. For
   other customers, the worksheet is emailed directly to the customer's email address. For most other
   customers, the worksheet is provided through a secure mailbox.
7. XXX
   Taxpayer offers a variety of XXX and XXX that are utilized by the XXX. Customers may order
   products such as XXX and XXX worksheets, XXX, XXX and XXX. These products are made
   available via XXX or by contacting Taxpayer directly.
8. Online Publications
   All publications provided by Taxpayer are available online as well as certain publications made
   available in a hardcopy format (see #1 above). The online versions of these publications are made
   available to customers via Taxpayer's website on a subscription basis. Customers also have the option
   to obtain an XXX to its online manuals.

Technical Assistance Advisement 13C1-007
Page 5

9. XXX, XXX and XXX Services
   Taxpayer produces XXX and XXX through the analysis and validation of data submitted by XXX and
   XXX methodologies and trends. Taxpayer also performs XXX services which provide customers with
   timely interpretation of pending and recently XXX. XXX, XXX and XXX Services provide Taxpayer
   Customers with a license to adopt and utilize the XXX filed and approved by the XXX on their behalf.
   Taxpayer also provides information regarding proposed XXX and XXX activities through its website.
   Receipts from the sale of services
10. XXX
    This service is provided to Customers who choose to submit their XXX data in a hardcopy format.
    Taxpayer utilizes a third party vendor to convert that data into standard Taxpayer reporting formats.
    Taxpayer Customers can view their converted data via the internet through Taxpayer's website.
11. XXX
    In various XXX, Taxpayer is authorized to administer the XXX 10 ("XXX"). Taxpayer may serve in
    this capacity in states where Taxpayer-developed XXX rules are approved by the XXX to govern the
    assignment, administration, eligibility, and issuance requirements with respect to XXX. Taxpayer
    screens applicants to establish eligibility and collects and maintains extensive databases to store,
    among other things, applications and compliance information.
12. XXX
    XXX services provided to the XXX (XXX) and XXX whereby Taxpayer (1) provides administrative
    services to the respective XXX in accordance with the prescribed XXX agreements and guidelines, (2)
    serves as a clearinghouse for information relative to XXX transactions, (3) handles XXX financial
    management and administrative obligations, (4)
    determines XXX reserves and makes
    recommendations for final approval, and (5) provides administration and oversight of XXX contracts.
    ISSUE
    Whether Taxpayer’s gross receipts earned from the above mentioned revenue categories should be
    sourced to Florida.

10

XXX.

Technical Assistance Advisement 13C1-007
Page 6

LAW
Section 220.15, F.S., states in part:
(5) The sales factor is a fraction the numerator of which is the total sales of the taxpayer
in this state during the taxable year or period and the denominator of which is the total
sales of the taxpayer everywhere during the taxable year or period.
(a) As used in this subsection, the term "sales" means all gross receipts of the taxpayer
except interest, dividends, rents, royalties, and gross receipts from the sale, exchange,
maturity, redemption, or other disposition of securities….
(b)1. Sales of tangible personal property occur in this state if the property is delivered
or shipped to a purchaser within this state, regardless of the f.o.b. point, other
conditions of the sale, or ultimate destination of the property, unless shipment is made
via a common or contract carrier….
Rule 12C-1.0155, F.A.C., provides in part:
(1) For the purposes of the sales factor, the term "sales" means all gross receipts
received by the taxpayer from transactions and activities in the regular course of its
trade or business.

(f)1. Where the income producing activity in respect to business income from
intangible personal property can be readily identified, such income is included in the
denominator of the sales factor and, if the income producing activity occurs in this
state, in the numerator of the sales factor as well. For example, usually the income
producing activity can be readily identified in respect to interest income received on
deferred payments on sales of tangible personal property and income from the sale,
licensing, or other use of intangible personal property. The sale or licensing of the use
of a trade name, trademark, or patent will be attributable to the state in which the trade
name, trademark or patent is used.

2. Where business income from intangible property cannot readily be attributed to any
   particular income producing activity of the taxpayer, such income cannot be assigned to
   the numerator of the sales factor for any state and shall be excluded from the
   denominator of the sales factor. For example, where business income in the form of
   dividends received on stock, royalties received on patents or copyrights, or interest
   received on bonds, debentures or government securities results from the mere holding
   of the intangible personal property by the taxpayer, such dividends and interest shall be
   excluded from the denominator of the sales factor.
3. In the case of a taxpayer engaged in the sale, assignment, or licensing of intangible
   personal property such as patents and copyrights, "sales" includes the gross receipts
   therefrom.

Technical Assistance Advisement 13C1-007
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(h) Sales of services. In the case of a taxpayer engaged in providing services, such as
the operation of an advertising agency, the performance of equipment service contracts,
or research and development contracts, "sales" includes the gross receipts from the
performance of such services including fees, commissions, and similar items.

(2) Florida sales. The numerator of the sales factor shall include gross receipts
attributed to this state which were derived by the taxpayer from transactions and
activities in the regular course of its trade or business. All interest income, service
charges, carrying charges, or time-price differential charges incident to such gross
receipts shall be included regardless of the place where the account records are
maintained or the location of the contract or other evidence of indebtedness.
(a) Sales of Tangible Personal Property in Florida. Gross receipts from sales of tangible
personal property are in this state if the property is delivered or shipped to a purchaser
within this state regardless of the F.O.B. point, other conditions of the sales, or the
ultimate destination of the property. Tangible personal property shipped by common or
contract carriers will use a destination test to determine whether the sale is a Florida
sale or a sale without this state.

(f)(1) The rental, leasing, licensing, or other use of a trade name, trademark, or patent to
a business entity located in Florida will be considered a Florida sale. The mere holding
of intangible personal property is not, of itself, an income producing activity.

(h) Computer related sales.

5. Interactive networks.
   a. Where there are charges to Florida customers for direct access to a data base, these
   charges are considered Florida sales. These charges include, but are not limited to, fees
   to access the network, fees based on the number of information requests made, time
   charges for connection to the data base and lines, and information retrieval from the
   data base.
   b. Where there are charges by a corporation located in Florida to Florida customers for
   access to third party data bases, all charges will be considered Florida sales, regardless
   of where the third-party data bases are located.
   c. Where a foreign (out-of-state) corporation charges Florida customers for access to
   third party data bases, all charges will be considered Florida sales except for charges
   directly related to the retrieval of information from the third-party data base.
   d. When a P.C. or mainframe is physically located in Florida, a corporation will have a
   "Florida customer" for purposes of this subparagraph.

(l) Other Sales in Florida. Gross receipts from other sales shall be attributed to this state
if the income producing activity which gave rise to the receipts is performed wholly
within this state. Also, gross receipts shall be attributed to this state if the income
producing activity is performed within and without this state but the greater proportion
of the income producing activity is performed in this state, based on costs of
performance. The term “income producing activity” applies to each separate item of

Technical Assistance Advisement 13C1-007
Page 8

income and means the transactions and activity directly engaged in by the taxpayer for
the ultimate purpose of obtaining gains or profits. Where independent contractors are
used to complete a contract, the term “income producing activity” will include amounts
paid to the independent contractors.
ANALYSIS
A state is allowed by the United States Constitution to tax the income of a multistate corporation if the
state applies a formula that fairly apportions a percentage of the corporation’s income attributable to
business activities inside and outside the state. Under s. 220.15, F.S., and Rule 12C-1.015, F.A.C., a
corporation that conducts business activities occurring both within and without Florida and that, by
virtue of that activity, are taxable in another state, must apportion its business income. Florida has
adopted an apportionment fraction with a sales factor representing fifty percent of the fraction, a
property factor representing twenty-five percent of the fraction, and a payroll factor representing
twenty-five percent of the fraction.
The Florida sales factor is a measure of receipts received from business activity conducted in Florida.
Section 220.15(5), F.S., provides the general proposition that the “sales factor is a fraction the
numerator of which is the total sales of the taxpayer in this state during the taxable year or period and
the denominator of which is the total sales of the taxpayer everywhere during the taxable year or
period.” Rule 12C-1.0155(2), F.A.C., states that “the numerator of the sales factor shall include gross
receipts attributed to this state which were derived by the taxpayer from transactions and activities in
the regular course of its trade or business.” Rule 12C-1.0155(2), F.A.C., sources various items of sales
to Florida. Those items which are not specifically included, may be included pursuant to Rule 12C1.0155(2)(l), F.A.C., which is a catch-all rule, provided the item meets the requirements of the rule.
The determination of whether a sale is to be attributed (or “sourced”) to Florida generally will be
based upon the factors and concepts set forth in s. 220.15(5), F.S., and Rule 12C-1.0155(2), F.A.C.
Receipts from sales of tangible personal property
Revenue Category 1
Rule 12C-1.155(1)(a), F.A.C., states that sales of tangible personal property are included in the sales
factor. Rule 12C-1.0155(2)(a), F.A.C., sources the sale of tangible personal property to Florida if the
property is “delivered or shipped to a purchaser within this state regardless of the F.O.B. point, other
conditions of the sales, or the ultimate destination of the property.” If a common carrier is used, then
tangible personal property is sourced depending upon the destination of the tangible personal property.
Accordingly, if tangible personal property is delivered or shipped to a purchaser in Florida either
directly by the Taxpayer or by a common carrier, the sale of tangible personal property will be sourced
to Florida.

Technical Assistance Advisement 13C1-007
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Receipts from licensing of intangible property
Revenue Category 2
Section 220.15(5)(a), F.S., generally excludes royalty income from the sales factor. Rule 12C1.055(1)(f)1., F.A.C., provides an exception that states business income from intangible personal
property (such as trade names and trademarks) that can be readily identified is included in the
denominator of the sales factor, and if such income producing activity occurs in Florida, is included in
the numerator as well. Rule 12C-1.055(2)(f)1., F.A.C., provides that if the intangible personal
property is licensed or used by an entity located in Florida, the income from such licensing or use will
be considered a Florida sale.
The purpose of apportionment is to fairly divide a taxpayer’s income amongst the states by measuring
its significant business activity. Apportionment looks to the business activities of a taxpayer in
making this measurement. The United States Supreme Court has stated that the “factor or factors used
in the apportionment formula must actually reflect a reasonable sense of how income is generated.”11
The states usually measure the business activities of a taxpayer by the use of a three-factor
apportionment formula – a combination of a taxpayer’s payroll, property, and gross receipts (sales). If
an item of income does not fairly represent a taxpayer’s business activity in a state, the Department
will not allow the item to be included in the apportionment factor. If an item of income is a significant
part of a taxpayer’s income, factor representation will be necessary to fairly represent a taxpayer’s
business activity in a state and the item will be required to be included in the apportionment factor.
Taxpayer’s predominant business activity consists of earning revenue from providing access to an
interactive network, the sale of tangible personal property, and the sale of services. If Taxpayer’s
royalty income is not significant, the income will not be allowed to be included in the Taxpayer’s sales
factor since it does not clearly reflect Taxpayer’s business activity. If significant, the income must be
included and sourced according to where the Taxpayer’s customer is located. If the royalty payments
are made from third-parties located in Florida and they are significant, the receipts should be sourced
to Florida in the sales factor.
Receipts from providing access to an interactive network
Revenue Categories 3 – 9
Rule 12C-1.0155(2)(h)5.a, F.A.C., provides a sourcing methodology for "interactive networks" and
specifically states that "charges to Florida customers for direct access to a data base ... are considered
Florida sales." Such charges include, but are not limited to, "fees to access the network, fees based on
the number of information requests made, time charges for connection to the data base and lines, and
information retrieval from the data base. Revenue categories 3 – 9, facts stated above, involve
Taxpayer’s customers accessing Taxpayer’s online data base for various products. Pursuant to Rule
11

Container Corp. of Am. v. Franchise Tax Bd., 463 US 159, 169 (1983)

Technical Assistance Advisement 13C1-007
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12C-1.0155(2)(h)5.a., F.A.C., the sourcing of Taxpayer’s online database depends upon the location of
the customer. When a customer located in Florida accesses Taxpayer’s online database, the sales will
be sourced to Florida. Revenue categories 6 and 7 can also be delivered via email. Such a delivery
methodology is not sourced according to Rule 12C-1.0155(2)(h)5.a., F.A.C., and is discussed below.
Receipts from the sale of services
Revenue Categories 6 – 7 and 10 – 12
Pursuant to Rule 12C-1.0155(2)(l), F.A.C., sales are attributed to Florida if the income producing
activity which gave rise to the receipt is wholly performed within Florida. "Income producing activity"
is defined as "the transaction and activity directly engaged in by the taxpayer for the ultimate purpose
of obtaining gains or profits." The income producing activity generally occurs where the customer is
located and not where a taxpayer processes the income producing activity. A taxpayer’s processing of
the income producing activity is generally accounted for by the payroll and property factors. The
purpose of the sales factor is to account for a taxpayer’s sales, and if the sales are made to and income
is derived from a Florida customer, the sales must be sourced to Florida.
Revenue categories 6 and 7 are ordinarily sourced according to where the Taxpayer’s customer is
located since they are accessed via an interactive network. If these same products are delivered to the
customer through email, the sale is a sale of a service and sourced pursuant to Rule 12C-1.0155(2)(l),
F.A.C. The transaction involved is the payment for Taxpayer’s product and the activity involved is the
delivery of the email from the Taxpayer to its customer. Therefore, sales should be sourced according
to the location of the customer. If the customer is located in Florida, the sale will go into the numerator
of the sales factor.
For revenue category 10, the transaction and activity directly engaged in by the Taxpayer is the
conversion of data into standard electronic reporting formats for its customer to access online and the
payment by the customer for this service. Whether Taxpayer actually performs the service or
outsources it to a vendor is irrelevant for purposes of this analysis. The outsourcing is generally a
separate and distinct transaction between the Taxpayer and the vendor. Since Florida is a market state,
the transaction and activity is sourced according to where the income producing activity occurs, which
is usually where the customer resides. In this case, sales should be sourced according to the location
of the customer.
For revenue category 11, the transaction and activity directly engaged in by the Taxpayer is the
administration of various XXX, including the screening of XXX to establish eligibility into the XXX
and the collection and maintenance of extensive databases to store critical information related to the
XXX. The transaction and activity occurs in the state where the customer is located since the actual
administration occurs in the administered state. In addition, the specific XXX that entered into the
contract with Taxpayer is the customer and is the XXX where the customer is located. Therefore, the
sales from revenue category 11 will be sourced according to where the customer is located.

Technical Assistance Advisement 13C1-007
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For revenue category 12, the transaction and activity directly engaged in by the Taxpayer is the
administration services provided to the XXX and four other XXX. The transaction and activity occurs
in the XXX where the customer is located since the actual administration occurs in the administered
XXX. In addition, the specific XXX that entered into the contract with Taxpayer is the customer and
is the state where the customer is located. Therefore, the sales from revenue category 12 will be
sourced according to where the customer is located.
CONCLUSION
For the reasons stated above, the methods for sourcing each of Taxpayer’s Revenue Categories for
purposes of calculating the company's Florida sales factor is summarized below:
Revenue Category 1: This consists of revenues from sales of printed materials. Pursuant to s.
220.15(5)(b)1, F.S., and Rule 12C-1.0155(1)(a), F.A.C., these revenues should be treated as Florida
sales if the property is delivered or shipped to a purchaser in Florida.
Revenue Category 2: This consists of revenues from the licensing of proprietary intangible assets.
Pursuant to Rule 12C-1.0155(l)(f)1, F.A.C., these revenues should be treated as Florida sales if the
underlying intangible asset is licensed to a customer located in Florida, provided that the royalty
income is significant.
Revenue Categories 3 - 9: These consist of revenues from products and services delivered (or in
some cases submitted) via the internet to Taxpayer's online database or interactive network. Pursuant
to Rule 12C-1.0155(2)(h)5.a., F.A.C., these revenues should be treated as Florida sales if the customer
is located in Florida. If the products and services are submitted via email, the sale will be sourced
pursuant Rule 12C-1.0155(2)(l), F.A.C., if the customer is located in Florida.
Revenue Category 10: This consists of revenues for conversion of XXX data into a format required
to satisfy data submission requirements by Taxpayer. Pursuant to Rule 12C-1.0155(2)(l), F.A.C., these
revenues should be sourced to Florida if the customer is located in Florida.
Revenue Categories 11 and 12: These consist of revenues from the administration of XXX and both
XXX. Pursuant to Rule 12C-1.0155(2)(l), F.A.C., these revenues should be sourced to Florida if the
customer is located in Florida.
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 documents 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

Technical Assistance Advisement 13C1-007
Page 12

taxpayer, must be deleted before disclosure. In an effort to protect the confidentiality of such
information, we request you provide the undersigned with an edited copy of your request for Technical
Assistance Advisement, backup material and response within fifteen days of the date of this
advisement.
Sincerely,

Affan Qureshi, Esq.
Senior Attorney
Technical Assistance and Dispute Resolution
(850)717-7602

Record ID #142122