Which county's discretionary surtax applied when a furniture wholesaler delivered a retailer's sales directly to Florida customers?

Subject

Discretionary Sales Surtax

Plain-English summary

Under the pre-1994 rules, the furniture retailer had to collect the surtax, but the applicable county depended on where the retailer, wholesaler warehouse, and customer were located. This ruling is historical because it expressly announced a different destination-based rule beginning January 1, 1994.

When the wholesaler shipped from a non-surtax county, surtax applied only when both the retailer and customer were in surtax counties; the retailer used its own county's rate. When the wholesaler shipped from a surtax county, that same rule applied if retailer and customer were both in surtax counties.

If the retailer was in a non-surtax county but the wholesaler warehouse and customer were in surtax counties, the retailer collected the wholesaler county's rate and remitted it on the separate county supplemental return. Beginning January 1, 1994, the ruling said dealers would instead collect based on the delivery county regardless of dealer location.

What this means for you

The detailed location matrix is a snapshot of law the ruling itself said was about to change. It should not be used as current sourcing guidance.

Common questions

Q: Who collected the surtax in the described drop shipments? The retailer.

Q: Could the wholesaler warehouse county determine the rate? Yes, under the stated pre-1994 non-surtax-retailer scenario.

Q: What changed on January 1, 1994? The ruling said collection would be based on the county where the taxable property or service was delivered.

Citations and references

• Fla. Stat. § 212.054(2)(a), (3)(a), (l) — discretionary surtax transactions
• Fla. Admin. Code r. 12A-15.003(2)(l)2.a. — wholesaler delivery example
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-052

Original ruling text

Aug 02, 1993

RE: TAA 93A-052
Discretionary Sales Surtax
Section 212.054(2)(a), (3)(a) and (l), F.S.
Rule 12A-15.003(2)(l),2.a., F.A.C.

Dear :

This is in response to your letter of June 17, 1993, in
which you requested the issuance of a technical assistance
advisement on behalf of your client XXXXX, [hereinafter
"Retailer"] concerning the proper application of the
discretionary sales surtax to sales of furniture when the
deliveries are made by XXXXX [hereinafter "Wholesaler"] to
customers located in various counties in XXXXX.

Your letter provides in part:

"FACTS

"[Retailer], a Florida corporation, is a retail furniture
company. The company operates retail stores located in various
counties, both surtax and non surtax counties, throughout the
State of Florida. The company purchases all its furniture from
one wholesaler. [Wholesaler] and [Retailer] are related through
a common shareholder that owns 100% of each S corporation.

"[Retailer's] stores sell furniture to customers throughout
the State of Florida. The majority of the furniture sold to
customers is delivered directly by the [Wholesaler,] to
customers both in surtax and non surtax counties.
[Wholesaler's] warehouse is currently located in XXXXX county, a
county not imposing a surtax. [Wholesaler] is in the process of
building a new facility in XXXXX County, a surtax county, that
will replace the current facility in XXXXX County.

"ISSUES

"Based on our uncertainty regarding the application of the
county surtax to our particular situation, we request a
technical assistance advisement addressing the following:

"(1) Will the delivery of furniture from, [Wholesalers]
warehouse located in a county not imposing surtax, XXXXX
County, by [Wholesaler] on behalf of [Retailer] located in
both surtax and non surtax counties to customers located in
surtax and non surtax counties be subject to surtax?

"The taxpayer believes that deliveries made by [Wholesaler]
from Wholesalers warehouse to customers of [Retailer] the
retail outlet will result in [Wholesaler] being classified
as the selling dealer pursuant to 212.06(2)(f) F.S. For
surtax purposes the transaction will be viewed as a
transaction by [Wholesaler]. Additionally, [Retailer]
would step into the shoes of [Wholesaler] for surtax
purposes pursuant 212.054(3)(a) F.S. and the analysis
presented in Technical Assistance Advisement 88-292.
Therefore, [Wholesaler] as the selling dealer located in a
non surtax county will not be required to collect surtax on
deliveries into either surtax or non surtax counties.
Additionally, [Retailer] will not be responsible for
collecting surtax on deliveries made on its behalf by
[Wholesaler]. However, [Retailer] will be required to
collect surtax on sales from its locations within surtax
counties delivered by [Retailer] to customers in surtax
counties.

"(2) When [Wholesaler] relocates to a surtax county will
the delivery of furniture from the new warehouse on behalf
of the retailers located in both surtax and non surtax
counties to customers in a surtax county be subject to
surtax?

"As stated above 212.06(2)(f) F.S. seems to define
[Wholesaler] as the dealer. Therefore, all sales by
[Wholesaler] delivered to customers in surtax counties
would be subject to surtax in the county where [Wholesaler]
is located. Deliveries by [Wholesaler] to customers

located in non-surtax counties will not be subject to
surtax.

"(3) When the transactions are subject to surtax, will
[Retailer] be responsible for collecting and remitting the
surtax?"

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."

Section 212.054(3)(1), F.S., provides in part:

"(1) A Florida manufacturer or wholesaler which is located
in such county sells tangible personal property to a dealer
who is located outside the county imposing the surtax, but
delivers the property within the county in which the
manufacturer or wholesaler is located or within a county

also imposing the surtax to a customer of the dealer, in
which event the dealer must collect and remit the surtax
for the county in which the manufacturer or wholesaler is
located;..."

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

"2.a. Example: A retail dealer of office equipment in
County A (a county not imposing the surtax) sells office
equipment to a customer in County B (a county imposing the
surtax at the rate of 1%). The retail dealer, in County A,
has a wholesaler of office equipment in County B, deliver
the equipment to the retail dealer's customer in County B.
The transaction is deemed to have occurred in County B, and
the retail dealer in County A is required to collect and
remit tax at the rate of 7% (6% state sales tax and 1%
surtax). The retail dealer shall remit the surtax monthly
for each county, using separate Discretionary Surtax
Supplemental Returns (DR-15Y). The state sales tax shall
not be included in the Supplemental return but instead
shall be remitted on the dealer's Sales and Use Tax Return
(DR-15)."

DEPARTMENT RESPONSE

Concerning issue (1), where the [Wholesaler] makes
deliveries of furniture from his warehouse located in a
non-surtax county, surtax is applicable only in the situation
where both the [Retailer] and the customer are located in a
surtax county. In this case, the provisions of section
212.054(3)(a), F.S., will have been satisfied which require that
both the selling dealer and the customer be located in a surtax
county in order for the surtax to be applicable to such sale.
In this transaction, the [Retailer] is required to charge,
collect, and remit the surtax at the rate imposed in the county
in which the [Retailer] is located on his Sales and Use Tax
return (DR-15).

For issue (2), when the [Wholesaler's] warehouse is located
in a surtax county, surtax will apply in two situations. The
first is when the [Retailer] and the customer is located in a

surtax county. In this case, section 212.054(3)(a), F.S.,
applies as we stated above because both the [Retailer] and the
customer are located in a surtax county. Again, the [Retailer]
is required to charge, collect, and remit the surtax at the rate
imposed in the county in which he is located on his Sales and
Use Tax Return (DR-15).

The second situation in which surtax would apply is when
the [Retailer] is located in a non-surtax county and delivery is
made by the [Wholesaler] from his warehouse located in the
surtax county to a customer located in a surtax county. In this
case, Rule 12A-15.003(2)(1)2.a., F.A.C., is applicable. The
rule as quoted above, states that the Retailer is required to
charge and collect surtax based on the rate imposed in the
county in which the [Wholesaler] is located. The rule goes on
to provide that the [Retailer] must remit the surtax monthly for
each county using separate Discretionary Surtax Supplemental
Return (DR-15Y).

Section 212.054(3)(1), F.S., is applicable in a situation
where the [Wholesaler] and the customer are located in a surtax
county and the [Retailer] is located in a non-surtax county. It
does not apply when the [Wholesaler], the [Retailer] and the
customer are all located in a surtax county. In this case,
section 212.054(3)(a), F.S., applies.

Issue (3), was addressed in our response to issue (1), and
(2).

Please be aware that effective January 1, 1994, a dealer
whether located in a surtax county or a nonsurtax county who
sells and delivers taxable tangible personal property or taxable
services to a customer located in a surtax county will be
required to charge, collect, and remit surtax on such sales.
The tax will be collected at the rate imposed in the county in
which the taxable tangible personal property or the taxable
service is delivered irrespective of where the selling dealer is
located. Notices of these changes will be made in the Florida
Administrative Weekly. You may wish to contact the Florida
Department of Revenue, Division of Taxpayer Assistance, P.O. Box
7443, Tallahassee, FL 32314-7443 or telephone (904) 488-6387 in

November, 1993, for a copy of the rules.

Enclosed is a copy of our Discretionary Sales Surtax Rules
for your review and information.

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/pb
Enclosures
Con. #9449