Did Florida discretionary sales surtax apply to microfilm delivered to a buyer in a surtax county from a dealer in a nonsurtax county?

Subject

Discretionary Sales Surtax/$5,000 Limitation

Plain-English summary

The microfilm transactions were not subject to discretionary sales surtax under the 1993 rule because the selling dealer was located in a county that did not impose the surtax. The purchaser was in a surtax county, but the ruling then required both the dealer and delivery location to satisfy the quoted location conditions.

The ruling also explained the former $5,000 cap for future taxable sales. Items on one invoice counted as a single item if normally sold in bulk or assembled into a working unit. A written order for a specific quantity delivered within a fixed time also counted as one sale, while open-ended orders treated each delivery separately.

The official source expressly warns that a law change effective January 1, 1994 directly affected the issue.

What this means for you

This page preserves the historical location and aggregation rules only. The source's amendment notice prevents using the 1993 outcome as a current county-surtax answer.

Common questions

Q: Why was no surtax due in the ruling? The dealer's selling location was in a county without surtax.

Q: How did the ruling define bulk sales? Several items of the same kind sold at the same time on one invoice.

Q: Is the 1993 seller-location rule current? This page does not say so; the official source says later law directly affected it.

Citations and references

• Fla. Stat. § 212.054(2), (3) — historical surtax and $5,000 limitation
• Fla. Admin. Code rr. 12A-15.003, 12A-15.004 — location and aggregation rules
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-003

Original ruling text

Status: Law Amended - Effective 1/1/94. Directly affects
issue.

Jan 27, 1993

RE: TAA 93A-003
Discretionary Sales Surtax/$5,000 Limitation
Section 212.054(2)(a),(b) and (3)(a), F.S.
Rule 12A-15.003(2)(a) and (b), (3)(a) and (b), F.A.C.

Dear :

This is in response to your letter of December 7, 1992, and
our telephone conversation of December 16, 1992. In your letter
you requested the issuance of a technical assistance advisement
on the sale of various quantities of micrographic supplies by
XXX [hereinafter "Vendor"] to XXX [hereinafter "Purchaser"] by
way of purchase orders issued to Taxpayer by Vendor. Vendor is
an information management company in micrographic supplies.
Invoices of the transactions were provided to the Department;
however, copies of the purchase orders were not, as they were
not available.

Your letter provides in pertinent part:

"One of [Vendor's] customers, [Purchaser], has questioned
the imposition of the discretionary surtax with respect to its
purchase of micrographic supplies. In particular, Purchaser has
questioned the imposition of the discretionary surtax on its
purchases of micrographic supplies included in invoice
numbers..., respectively.

"The product codes on the invoices indicate that Purchaser
purchased two (2) types of blank microfilm. The invoices are
attached hereto and are incorporated by reference and made a
part of this request. As evidenced by the questioned invoices,
[Vendor] treated each item referenced on the invoice as a
separate transaction for purposes of imposing the discretionary
surtax. Consequently, the exemption provided for in Chapter

12A-15.004 was not applied to the questioned invoices.
[Purchaser] contends that the questioned invoices qualify for
the exemption provided for in Chapter 12A-15.004.

"As noted above, [Vendor] treated each item referenced on
the invoice as a separate transaction for purposes of imposing
the discretionary surtax. Because of the obvious discrepancy
between [Purchaser's] and [Vendor's] method of imposing the
discretionary surtax, [Vendor] requests that the Florida
Department of Revenue issue a Technical Assistance Advisement
with respect to the above transactions."

In our telephone conversation, it was clarified that Vendor
is registered as a sales tax dealer in XXX. It is understood
that the sales in question were made by your XXX location but
delivery of the goods was made from XXX. Also, Vendor agreed to
the changes to the deleted portions of the request as noted in
the above quoted portion of the request.

Applicable Authority

Section 212.054(2)(a) and (3)(a), F.S., provides:

"(2)(a) The tax imposed by the governing body of any county
authorized to so levy pursuant to s. 212.055 shall be a
discretionary surtax on all transactions occurring in the
county which transactions are subject to the state tax
imposed on sales, use, rentals, admissions, and other
transactions by this part. The surtax, if levied, shall be
computed as the applicable rate or rates authorized
pursuant to s. 212.055 times the amount of taxable sales
and taxable purchases representing such transaction....
"(3) For the purpose of this section, a transaction shall
be deemed to have occurred in a county imposing the surtax
when:
"(a) The dealer is located in the county, delivery is made
to a location within the county or to a location within a
county also imposing the surtax, and the sale includes
tangible personal property, except as otherwise provided
herein; provided, that the sale of any motor vehicle or
mobile home of a class or type which is required to be

registered in this state or in any other state shall be
deemed to have occurred only in the county identified as
the residence address of the purchaser on the registration
or title document for such property..."

Rule 12A-15.003(2)(a)1., and (b), F.A.C., provides:

"(2) For purposes of the surtax, a transaction except for a
transaction involving any motor vehicle or mobile home of a
class or type which is required to be registered in this
state or in any other state, shall be deemed to have
occurred in a county imposing the surtax when:
"(a)1. The selling dealer is located in the county imposing
the surtax, delivery is made to a location within the
county, and the sale includes tangible personal property.
For the sale of motor vehicles or mobile homes, see
subsection (3)....
"(b) The selling dealer is located in a county imposing the
surtax, delivery is made within another county imposing the
surtax, and the sale includes tangible personal property.
In these circumstances, the selling dealer shall collect
the surtax at the prevailing rate of the county where the
selling dealer is located. For the sale of motor vehicles
or mobile homes, see subsection (3).
"1. Example: A dealer in County A (a county imposing surtax
at the rate of 1/2%) sells a washing machine and delivers
it to a purchaser in County B (a county imposing the surtax
at the rate of 1%). The transaction is deemed to have
occurred in County A and the surtax applies. Tax is due at
the rate of 6 1/2% (6% state sales tax and 1/2% surtax),
and the selling dealer in County A shall collect and remit
the tax.
"2. Example: A dealer in County A (a county imposing the
surtax at the rate of 1%) sells a washing machine for $300
and delivers it to a purchaser in County B (a county
imposing the surtax at the rate of 1/2%. The transaction
is deemed to have occurred in County A and the surtax
applies. Tax is due at the rate of 7% (6% state sales tax
and 1% surtax), and the selling dealer in County A shall
collect and remit the tax."

Section 212.054(2)(b)1., F.S., provides:

"(b) However:
"1. The tax on any sales amount above $5,000 on any item of
tangible personal property and on long distance telephone
service shall not be subject to the surtax. For purposes of
administering the $5,000 limitation on an item of tangible
personal property, if two or more taxable items of tangible
personal property are sold to the same purchaser at the
same time and under generally accepted business practice or
industry standards or usage, are normally sold in bulk or
are items that, when assembled, comprise a working unit or
part of a working unit, such items must be considered a
single item for purposes of the $5,000 limitation when
supported by a charge ticket, sales slip, invoice, or other
tangible evidence of a single sale or rental."

Rule 12A-15.004(2)(a)1., (b)1., and (d), F.A.C., provides:

"(2)(a)1. The surtax does not apply to the sales amount
above $5,000 on any item of tangible personal property.
However, the surtax does apply to the first $5,000 of the
sales amount on any item of tangible personal property and
to all other transactions which are subject to the state
tax imposed on sales, use, rentals, and other transactions
by Part I, Chapter 212, F.S., without limitation, except as
provided in (3) below....
"(b)1. For purposes of administering the $5,000 limitation
on any item of tangible personal property, if two or more
taxable items of tangible personal property are sold to the
same purchaser at the same time and, under generally
accepted business practice or industry standards or usage,
are normally sold in bulk or are items which, when
assembled, comprise a working unit or part of a working
unit, such items shall be considered a single item for
purposes of the $5,000 limitation when supported by a
charge ticket, sales slip, invoice, or other tangible
evidence of a single sale or rental....
"(d) Where a purchase order is issued by the purchaser to
the selling dealer, or an agreement is made between the
selling dealer and the purchaser which is reduced to

writing, that provides for the purchase of a specific
quantity of tangible personal property which, according to
the terms and conditions set out in the purchase order or
agreement, is to be delivered to the purchaser within a
definite specified time, such transaction constitutes one
sale for purposes of the $5,000 limitation. Delivery of
the tangible personal property so ordered within the time
specified in the purchase order or agreement will
constitute one sale notwithstanding that due to the nature
of the property it must be delivered in installments or
that multiple deliveries may be necessary to consummate
delivery to the purchaser. In the absence of a written
purchase order or written agreement reflecting the above
conditions, each individual delivery of tangible personal
property is to be one sale. Each individual delivery of
tangible personal property on purchases orders for
indefinite quantities or open-end purchase orders is
considered to be one sale."

Department Response

The applicability of the surtax to the transactions
described in your letter is governed by Section 212.054(2)(a),
F.S., which provides that the surtax shall be imposed on all
transactions occurring in the surtax county levying the surtax,
which transactions are subject to the state tax imposed on
sales, use, rentals, admissions, and other transactions under
Chapter 212, F.S., and Section 212.054(3)(a), F.S., which states
that a transaction is deemed to have occurred in a county
imposing the surtax when the dealer is located in the county,
delivery is made to a location within the county or to a
location within a county also imposing the surtax and the sale
includes tangible personal property.

As to the transactions in question, surtax does not apply
as the provisions of Section 212.054(3)(a), F.S., have not been
met which require that both the selling dealer and the purchaser
be located in a county imposing a surtax. The purchaser is
located in XXX which is in XXX, a county which imposes a surtax;
however, the selling dealer is located in XXX, in XXX, which
does not impose a surtax.

In order for the surtax to apply to the transactions, your
office in either XXX would have to have made the sales of the
items to the purchaser located in XXX as they are located in
XXX, and XXX counties respectively, all of which impose a
surtax.

Based on Section 212.054(2)(a) and (3)(a), F.S., should
surtax apply to any of your company's sales in the future we
offer the following information regarding the application of the
$5,000 limitation.

Rule 12A-15.004(2)(b) and (d), F.A.C., quoted above,
provides that if items of tangible personal property are sold by
Vendor on one invoice and the items are normally sold in bulk or
the items when assembled comprise a working unit, such items
shall be considered a single item for purposes of the $5,000
limitation and the surtax limitation applies to the total
invoice amount. However, if the items are not normally sold in
bulk or are items which, when assembled, do not comprise a
working unit, such items shall be considered single items for
purposes of the $5,000 limitation, and the surtax applies to
each item on the invoice.

For purposes of the rule, "bulk sales" means selling
several items of the same kind at the same time on one invoice.

The rule also provides that where a purchase order is
issued by the Purchaser to the Vendor or an agreement in writing
is made between the Purchaser and the Vendor that provides for
the purchase of a specific quantity of tangible personal
property which according to the terms of the purchase order or
agreement is to be delivered to the Purchaser within a definite
specified time, such transaction constitutes one sale for
purposes of the $5,000 limitation. Therefore, the $5,000
limitation applies to items which comprise a working unit, items
which are normally sold in bulk, or a purchase order or written
agreement for a specified quantity of such tangible personal
property to be delivered within a specified time. However, each
individual delivery of tangible personal property on a purchase
order for indefinite quantities or open-end purchase orders is

considered one sale, and the $5,000 limitation applies to each
delivery of tangible personal property as a result of the
purchase order.

For your information and review we have enclosed a copy of
our discretionary sales surtax rules, local option tax reference
book and a listing of locally imposed tax rates, which includes
those counties which impose a surtax.

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,

Richard S. Harrod
Technical Assistant

RSH/h
Con. #5932