Were separately stated monthly charges for electronically delivered credit-reporting services subject to Florida sales tax?

Plain-English summary

The Florida Department of Revenue concluded that this automotive-retail technology provider's separately stated monthly credit-reporting charges were not subject to Florida sales tax.

Customers requested prospective vehicle buyers' credit checks through the provider's online portal. A major credit-reporting agency finalized the report, and the findings were returned electronically through the portal. The provider invoiced regularly and listed credit-reporting services separately from its other products and services.

The Department gave two grounds for the result: separately stated or freestanding credit-reporting services were nontaxable under Rule 12A-1.0092, and electronically displayed information was not a sale of tangible personal property or a taxable information service under Rule 12A-1.062(5).

What this means for you

Credit-reporting and information providers

Keep credit-reporting charges separately stated when an invoice also includes other products or services. The ruling expressly relied on separate statement.

Automotive retailers and finance-service platforms

Electronic delivery through an online portal did not convert the credit information into tangible personal property on these facts.

Accountants and tax professionals

Review invoicing and delivery method together. The ruling addressed monthly charges for reports furnished electronically, not every bundled data product.

Common questions

Q: Did the provider deliver paper credit reports?
A: No. The findings were transmitted electronically through its online portal.

Q: Could the invoice include other products and services?
A: Yes, but the credit-reporting charge was separately stated.

Q: Were the monthly credit-reporting charges taxable?
A: No.

Citations and references

• Fla. Stat. §§ 212.02(19), 212.05(1)(i)1., 212.055, and 213.22
• Fla. Admin. Code rr. 12A-1.0092(2)(c)1. and 12A-1.062(5)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 17A-007

Original ruling text

Executive
Director
Leon M. Biegalski

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-007
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 XXXXX, 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 provides integrated information technology
and digital marketing/advertising solutions to the automotive retail industry. 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:
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

www.floridarevenue.com
Florida Department of Revenue
Tallahassee, Florida 32399-0100

TAA
Page 2

1. Taxpayer’s customer requests a credit check for a potential buyer seeking financing for a vehicle
   purchase via Taxpayer’s online portal.
2. Each request submitted by a Taxpayer customer is submitted to one of the three largest credit
   reporting agencies for review and finalization.
3. The credit report findings are transmitted to Taxpayer’s customer electronically via Taxpayer’s
   online portal.
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. Each invoice may state a
   variety of other products/services in addition to the credit reporting services, all of which are
   separately stated.
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.
   Additionally, it should be noted that Taxpayer is currently under a sales tax compliance audit, by the
   Department, for the period of November 1, 2013, through October 31, 2016.
   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.

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.

TAA
Page 3

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
ARF\tadrstaff
Record ID: 212394