Did Florida county discretionary surtax apply to long-term vehicle leases when only the out-of-state lessor's address appeared on title and registration?

Subject

Discretionary Sales Surtax

Plain-English summary

The long-term vehicle leases were not subject to county discretionary surtax when the title and registration showed only the lessor's out-of-state address. The Florida address used on the application did not control because the final title and registration identified the lessor as owner at its out-of-state address.

If a Florida lessee's address in a surtax county appeared alone or together with the lessor's address on either title or registration, the surtax applied. The ruling reaffirmed the earlier TAA 92A-041 despite statutory and rule amendments.

What this means for you

For the cited motor-vehicle surtax rule, the address on the actual title or registration document controlled the county result.

Common questions

Did the vehicle's physical garage county control? Not under the documented facts.

Did the application form's Florida address control? No.

What would trigger surtax? A lessee address in a surtax county appearing on title or registration.

Citations and references

• Fla. Stat. §§ 212.02(16)(a), 212.054(3), and 213.22
• Fla. Admin. Code r. 12A-15.003(3)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94A-024

Original ruling text

Apr 13, 1994

Re: Technical Assistance Advisement 94A-024
Discretionary Sales Surtax Motor Vehicle Leases
Section 212.054(3), F.S.
Rule 12A-15.003(3), F.A.C.
XXX (Herein "Taxpayer")

Dear :

This will acknowledge receipt of your letter dated February 14,
1994, wherein request is made that the Department issue a
Technical Assistance Advisement ("TAA") pursuant to Section
213.22, F.S., with respect to the captioned party and matter.
The TAA is requested as an update of TAA 92A-041 issued to you
June 10, 1992, for the same client and issue. The updated TAA
is desired as an affirmation that the amendments to s.
212.054(3), F.S., by s. 2, ch. 93-222, L.O.F., have not served
to countermand the advice given in TAA 92A-041. The Department
has carefully examined your request and finds it to be in
compliance with the criteria set forth in Chapter 12-11, F.A.C.
Therefore, the Department is herewith granting your request for
issuance of a TAA and the following discourse shall constitute
said ruling.

DISCUSSION OF FACTS

Your petition indicates that the factual representations set
forth in your March 24, 1992, petition for TAA 92A-041 "have not
changed in any material respect." Your March 24, 1992, petition
for TAA 92A-041 and exhibits impart the following information
pertaining to the issue then under advisement and now posed for
reconsideration:

"Taxpayer is an out-of-state corporation engaged in the business
of leasing motor vehicles on a long-term basis. Taxpayer leases
automobiles in nearly every state, including Florida.
Taxpayer's arrangements with its Florida lessees (usually
corporations that have employees and/or operations located in

Florida) are typically structured as follows. Taxpayer will
purchase the vehicles from Florida dealers and subsequently
enter into long-term lease agreements with the lessees. Some of
the counties in which the lessees are located impose the
discretionary surtax. The lease agreements between Taxpayer and
the Florida lessees are entered into and signed by Taxpayer
outside of Florida. The Florida lessees typically provide the
vehicles to their employees. The employees garage the vehicles
in Florida counties that may or may not impose the discretionary
surtax.

"Taxpayer titles and registers its vehicles in Florida. The
Application for Certificate of Title and/or Vehicle Registration
(Form HSMV 82040) (a sample of which is attached as Exhibit A)
lists Taxpayer's name and out-of-state address as owner of the
vehicles. Since the application also requires the owner to list
a Florida address and Taxpayer is an out-of-state corporation
with no Florida address, offices or employees, the Florida
address listed on the application is that of either the
corporate lessee or the employee/driver of the vehicle.
However, both the Florida Certificate of Title (a sample of
which is attached as Exhibit B) and the Florida Vehicle
Registration Certificate (a sample of which is attached as
Exhibit C) list Taxpayer's name and out-of-state address as the
leased vehicles' registered owner. (A copy of Taxpayer's
standard form lease is attached as Exhibit D.)"

EXHIBITS:

In addition to carefully analyzing the above represented facts,
the Department has subjected the supporting documents to your
request, which are named as Exhibits A through D (Exhibit 2 of
your current petition), to scrupulous examination. Exhibits A,
B, and C, which consist respectively of: (i) an APPLICATION FOR
CERTIFICATE OF TITLE AND/OR VEHICLE REGISTRATION, (ii) a STATE
OF FLORIDA CERTIFICATE OF TITLE, and (iii) a FLORIDA VEHICLE
REGISTRATION CERTIFICATE, all relate to a common motor vehicle
(same vehicle identification number).

Exhibit D is the Taxpayer's standard lease ("Lease") form, which
was provided in blank. Article 1. of Lease, captioned

"POSSESSION", makes the following statement: "The Lessor hereby
agrees to deliver to the Lessee the motor vehicles hereinafter
described, with the Lessee to have possession of and right to
use said motor vehicles in accordance with the terms of this
agreement." (Emphasis Supplied) Article 4., captioned "LICENSE
AND USE", contains the following statement pertinent to the
instant matter: "All motor vehicles shall be registered in the
name of the Lessor during the entire term of the lease, and any
certificates of title required shall likewise be in the name of
the Lessor." (Emphasis Supplied) Also of importance in this
matter, Article 12., captioned "TERM OF THE LEASE", contains the
following language: "Each motor vehicle shall be leased for an
initial term of 12 months from the date of the delivery of such
vehicle to Lessee, and thereafter for successive 12 month
renewal terms; provided that Lessee shall have the right to
cancel any vehicle at any time after the end of the first 12
months of the initial lease term...." Finally, let us introduce
into this ruling the pertinent language set forth in Article
14., captioned "OWNERSHIP", which reads: "It is expressly agreed
that the Lessee by virtue of this lease acquires no ownership,
title, property right, interest, (or any option therefor) in any
leased motor vehicle save as herein provided...." (Emphasis
Supplied)

REQUESTED ADVISEMENT

You endeavor to receive the Department's advice regarding the
following:

"Based on the foregoing, it is respectfully requested that
you issue a Technical Assistance Advisement confirming that
Technical Assistance Advisement 92A-041 remains the
Department's position notwithstanding the amendments to
Section 212.054(3), F.S., and Rule 12A-15.003(3), F.A.C.,
and that Taxpayer is therefore not subject to the Florida
discretionary sales surtax when leasing motor vehicles to
Florida lessees."

DISCUSSION OF LAW

The following excerpts from the Florida Statutes and Florida

Administrative Code are relevant to and govern the matter under
reconsideration.

STATUTORY AUTHORITY

Section 212.054, F.S., as amended by s. 2, ch. 93-222, L.O.F.,
provides in pertinent part:

"212.054 Discretionary sales surtax; limitations,
administration, and collection.-....
"(3) For the purpose of this section, a transaction shall
be deemed to have occurred in a county imposing the surtax
when:
"(a)... 3. The sale of any motor vehicle...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....
"(e) The purchaser of any motor vehicle...of a class or
type which is required to be registered in this state is a
resident of the taxing county as determined by the address
appearing on or to be reflected on the registration
document for such property." (Emphasis Supplied)

"212.02 Definitions.-....
"(16) 'Sale' means and includes:
"(a) Any transfer of title or possession, or both,
exchange, barter, license, lease, or rental, conditional or
otherwise, in any manner or by any means whatsoever, of
tangible personal property for a consideration...."
(Emphasis Supplied)

REGULATORY AUTHORITY

Rule 12A-15.003(3), F.A.C., as amended to conform to the
statutory amendments to s. 212.054(3) by s. 2, ch. 93-222,
L.O.F., provides in pertinent part:

"12A-15.003 Imposition and Payment of Tax. "(3) For
purposes of the surtax a transaction involving a motor

vehicle...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:...
"(c)1. The motor vehicle...is sold by a dealer outside a
county imposing the surtax, and the purchaser is a resident
of a county imposing the surtax as determined by the
address on or to be on the property's registration
document...." (Emphasis Supplied)

The above statutory and regulatory provisions identify those
circumstances under which the sale (inclusive of leases) of a
motor vehicle is deemed to have occurred in a Surtax county.
Such provisions specify the residence address as reflected on
the title or registration documents as being the determining
factor as to the application of the Surtax. Under these
provisions, where the address shown on the title or registration
certificates is that of a purchaser or lessee who resides in a
surtax county, the Surtax applies. However, as a result of the
above provisions of statute and rule being written in such
manner as to identify only those transactions which are
considered to have transpired within a Surtax county without
express mention of transactions which are not, determining
transactions which are not within a Surtax county must be
accomplished by implication. The only reasonable implication of
the above statutory and rule provisions is that when the
residence address displayed on the title and registration
documents is not an address in a Surtax county, the Surtax does
not apply.

CASE LAW

The provisions of s. 212.054(3)(a)3. and (e), F.S., and Rule
12A-15.003(3), F.A.C., have not been the subject of litigation.
Consequently, there exists no Florida case law that would
suggest a different construction of the above statute and rule
than that advanced herein and in TAA 92A-041.

CONCLUSION OF LAW

Considering the provisions as s. 212.054(3)(a)3. and (e), F.S.,

and Rule 12A-15.003(3)(c)1., F.A.C., which provide that the
address indicated on the title or registration document shall be
the controlling factor in determining whether the transaction is
deemed to have occurred in a county imposing Surtax, and further
considering the facts of the instant case that: (i) under the
terms of article 4. of the Lease, all vehicle titles and
registrations shall be executed in Taxpayer's name and (ii) the
exhibit title and registration documents bear only Taxpayer's
name and out-of-state address, it is, therefore, the
Department's conclusion that Taxpayer's leases of vehicles to
lessees in counties imposing Surtax under precisely such
conditions are not subject to the levy of Surtax. This
conclusion is reached with the understanding that Taxpayer's
out-of-state address is the only address appearing on either
title or registration documents as so documented by the exhibits
submitted in support of your request. In the event the lessee's
address in a Surtax county should ever appear singularly or
together with Taxpayer's address on either a title or
registration certificate, the Surtax would apply.
Based on the foregoing, the amendments to s. 212.054(3), F.S.,
by s. 2, ch. 93-222, L.O.F., and the corresponding amendments to
Rule 12A-15.003(3), F.A.C., have no effect on the advice given
in TAA 92A-041. Accordingly, the advice given herein concurs
with and affirms that formerly given in TAA 92A-041.

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 confidential
information, we request you notify the undersigned in writing
within 15 days of any deletions you wish made to the request or
this response.

Sincerely,

Daniel M. Wagner, Jr.
Tax Law Specialist

DW/
Control No. 13747