Did Florida's solid-mineral severance tax apply to a company's mined and processed clay sold for further processing?

Subject

Solid Minerals Exempt From Tax

Plain-English summary

No Florida solid-mineral severance tax was due on the corporation's processed clay under the facts submitted. The company mined and processed clays in Florida and sold the product for uses including absorbents, cat litter, carriers for herbicides and fertilizers, animal-feed suspension agents, asphalt, and paint.

The Department applied section 211.3108 and concluded the product was sold for further processing under Florida's sales-and-use-tax provisions, bringing the described production within the exemption.

What this means for you

The ruling did not declare all clay or all processed minerals exempt. It tied the result to the company's described sales and the statutory routes for exempt solid minerals, including minerals on which Florida sales tax is ultimately paid.

Common questions

Q: Did delivery inside or outside Florida change the stated result? The facts included purchasers accepting delivery both inside and outside Florida, and the Department still concluded no severance tax was due on the described production.

Q: What products used the clay? The ruling listed oil and grease absorbent, cat litter, herbicide and fertilizer carriers, animal-feed suspension agents, asphalt, and paint.

Q: Does this page establish a blanket exemption for clay mining? No. The advisement was limited to this corporation's facts and exemption analysis.

Citations and references

• Fla. Stat. § 211.3108 — solid-mineral severance-tax exemptions
• Fla. Stat. ch. 212 — sales and use tax
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93B7-001

Original ruling text

Apr 01, 1993

Re: Technical Assistance Advisement 93(B)7-001
Severance Tax - Solid Minerals - Exemption
Section 211.3108, F.S.
Solid Minerals Exempt From Tax
XXX (Corporation)

Dear

This office has received your letter requesting a Technical
Assistance Advisement exempting Corporation from Florida's
severance tax on solid minerals.

Your request for exemption is based upon the following
information:

Corporation mines and processes various clays in Florida.
This product is then sold by Corporation to various
purchasers, some of whom accept delivery of the product in
Florida, and some of whom accept delivery outside of
Florida. Thereafter, some of Corporation's product is
resold in sales subject to Florida's sales and use tax law.
Corporation's processed product is sold for use as an oil
and grease absorbent, as cat litter, as a carrier for
herbicides and as fertilizers, as a suspension agent for
animal feed and in asphalt and paint.

Section 211.3108, F.S., provides an exemption from tax for
solid minerals, except phosphate rock and heavy minerals, which
are: 1) sold to governmental agencies in this state; or 2) upon
which a sales tax is ultimately paid to the state under the
provisions of Chapter 212, F.S.; or 3) extracted by the owner of
the site of severance for the purpose of improving the site; or
4) severed solely for direct application in agricultural use.
Applying these exemptions to the information provided on the
Corporation's mining operation in Florida, no severance tax is
due on the minerals produced. The product which is sold, is
sold for further processing under the provisions of Chapter 212,

F.S., and is exempt from severance tax.

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,

J.V. Parramore, Jr.
Technical Assistant
Technical Assistance

JVP/mh