Was the state-required $8 FDLE criminal-history-check fee collected on a firearm sale subject to Florida sales tax?

Subject

FDLE Criminal History Check Fee

Plain-English summary

The $8 FDLE criminal-history-check fee was not subject to sales tax when separately stated and identifiable from the firearm's taxable price. The Department found that the government-provided background check was not a taxable detective or protection service and that the mandatory fee fell outside the firearm's sales price.

The ruling suggested labeling the invoice line "FDLE Background Check Fee" rather than the less precise "Gun Check" to create a clearer audit trail.

What this means for you

The exclusion depended on the charge being imposed by Florida law, remitted for the state background check, and separately shown. A dealer-added screening or service charge would not necessarily receive the same treatment.

Common questions

Was the firearm itself exempt? No. The ruling addressed only the $8 fee.

Did the fee have to be separately stated? Yes.

What invoice description did the Department suggest? "FDLE Background Check Fee."

Citations and references

• Fla. Stat. §§ 212.02(17), 212.05(1)(k)1., 213.22, and 790.065(1)(b)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94A-035

Original ruling text

Jun 17, 1994

Re: Technical Assistance Advisement 94(A)-035
Sales Tax - Whether FDLE Criminal History Check Fee of $8
is Subject to Sales Tax
Taxpayer: XXX
Address: XXX
Sales Tax Number: XXX
FEI#: XXX

Dear :

This response is in reply to your March 2, 1994, petition for
the Department's issuance of a Technical Assistance Advisement
("TAA") pursuant to s. 213.22, F.S. Your petition regards the
referenced matter and party. The Department has carefully
examined your petition and finds it to meet the criteria set
forth in Chapter 12-11, F.A.C., requisite to issuance of a TAA.
Therefore, the Department is by this response issuing the
requested TAA.

DISCUSSION OF FACTS

Your petition and supporting documents impart the following
significant information regarding the issues under advisement
herein:

"A criminal history record check is required by the State
of Florida of every person who is not a law enforcement
officer or does not have a concealed weapons permit. Each
month these fees collected for criminal history record
checks are sent to the Florida Department of Law
Enforcement....

"We are submitting a copy of a sample invoice showing that
the criminal history record check fee is charged as a
separate item. Note on the invoice it is shown as a gun
check fee. Our customers have told us no sales tax should
be charged on the criminal history record check fee since

it is paid to the State of Florida and is required by the
State of Florida."

The sample invoice, no. 05488 dated 2-23-94, submitted with your
request shows that the fee is separately state and designated
"Gun Check".

REQUESTED ADVISEMENT

You endeavor to elicit the Department's advice regarding the
following specific questions:

"In collecting these fees that are submitted to the State
of Florida, we need to know if any sales tax should be
charged.... Please rule on whether we should be collecting
any sales tax on the criminal history record check fee."

DISCUSSION OF LAW

We consult the following provisions of statutory and case law in
addressing the matter under advisement:

Section 212.05, F.S.: "212.05 Sales, storage, use tax.-"It is hereby declared to be the legislative intent that
every person is exercising a taxable privilege who engages
in the business of selling tangible personal property at
retail in this state, including the business of making mail
order sales, or who rents or furnishes any of the things or
services taxable under this chapter, or who stores for use
or consumption in this state any item or article of
tangible personal property as defined herein and who leases
or rents such property within the state.
"(1) For the exercise of such privilege, a tax is levied on
each taxable transaction or incident, which tax is due and
payable as follows:....
"(k) At the rate of 6 percent on charges for all:
"1. Detective, burglar protection, and other protection
services (SIC Industry Numbers 7381 and 7382). Any law
enforcement officer, as defined in s. 943.10, who is
performing approved duties as determined by his local law
enforcement agency in his capacity as a law enforcement

officer, and who is subject to the direct and immediate
command of his law enforcement agency, and in his uniform
as authorized by his law enforcement agency, is performing
law enforcement and public safety services and is not
performing detective, burglar protection, or other
protective services, if the law enforcement officer is
performing his approved duties in a geographical area in
which the law enforcement officer has arrest jurisdiction.
Such law enforcement and public safety services are not
subject to tax irrespective of whether the duty is
characterized as extra duty,'off-duty,' or `secondary
employment,' and irrespective of whether the officer is
paid directly or through his agency by an outside source.
The term "law enforcement officer" includes full-time or
part-time law enforcement officers, and any auxiliary law
enforcement officer, when such auxiliary law enforcement
officer is working under the direct supervision of a
full-time or part-time law enforcement officer...."
(Emphasis Supplied)

SIC industry number 7381 includes:

Armored car service

Investigators, private

Detective agencies

Lie detection service

Dogs, rental of: for

Polygraph service

private service

Protective service, guard

Fingerprint service

Security guard service

Guard service

SIC industry number 7382 includes:
Burglar alarm monitoring

Security systems devices,

and maintenance

burglar and fire alarm:

Fire alarm monitoring

monitoring and maintenance

and maintenance

SIC industry number 9221 includes government establishments
primarily engaged in law enforcement, traffic safety, police and
other activities related to the enforcement of the law and
preservation of order. This SIC industry number encompasses:

Bureaus of criminal

Police departments

investigation - government Sheriffs' offices
Highway patrols

State police

Marshals' offices, police

Section 212.02(17), F.S.: "Sales price' means the total amount paid for tangible personal property, including any services that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service cost, interest charged, losses, or any other expense whatsoever.Sales price' also includes the
consideration for a transaction which requires both labor
and material to alter, remodel, maintain, adjust, or repair
tangible personal property. Trade-ins or discounts allowed
and taken at the time of sale shall not be included within
the purview of this subsection."

Section 790.065, F.S.: "(1) No licensed importer, licensed
manufacturer, or licensed dealer shall sell or deliver from
his inventory at his licensed premises any firearm to
another person other than a licensed importer, licensed
manufacturer, licensed dealer, or licensed collector, until
he has:....
"(b) Collected a fee from the potential buyer for
processing the criminal history check of the potential
buyer. The fee shall be $8. The Department of Law
Enforcement shall, by rule, establish procedures for the
fees to be transmitted by the licensee to the Department of
Law Enforcement. All such fees shall be deposited into the
Department of Law Enforcement Operating Trust Fund, but
shall be segregated from all other funds deposited into
such trust fund and must be accounted for separately. Such
segregated funds must not be used for purpose other than
the operation of the criminal history checks required by
this section...."

The rules of construction for statutory definitions which define
what is to be taxed differ from those governing the construction
of statutory exemptions. In construing statutory exemptions the

Department must adhere to and be guided by the long-standing and
fundamental precept of statutory construction, established by
the Florida Supreme Court, which mandates that exemptions from
or exceptions to taxing statutes must be strictly construed
against the taxpayer. See Asphalt Pavers v. Dept. of Revenue,
584 So.2d 57 (Fla. 1st DCA 1991); Dade Cty. Taxing Auth. v.
Cedars of Lebanon, 355 So.2d 1205 (Fla. 1978), reh. den. April
5, 1978; Williams v. Jones, 326 So.2d 425 (Fla. 1975), reh. den.
March 4, 1976; Straughn v. Camp, 293 So.2d 689 (Fla. 1974);
United States Gypsum Company v. Green, 110 So.2d 409 (Fla.
1959). Conversely, the Florida Supreme Court has ruled that a
statutory definition which defines what is to be taxed is to be
strictly construed against the taxing authority. See State Ex
Rel. Drum Service Company of Fla. v. Kirk, 234 So.2d 358, 359
(Fla. 1970)

The Supreme Judicial Council of Maine stated in Communication
Telecasting Service v. Johnson, 220 A.2d 500, (Maine 1966) in
quoting Snite v. Department of Revenue, 74 N.E. 2d 877, 879, 880
(Illinois 1947), that:

"If the article sold is the substance of the transaction
and the service rendered is merely incidental to and an
inseparable part of the transfer to the purchaser of the
article sold, then the vendor is engaged in the business of
selling at retail and the tax which he pays is measured by
the total cost of the article and service."

Moreover, largely analogous to the issue under advisement is the
treatment of certain governmentally imposed fees relating to the
sale of motor vehicles. With respect to motor vehicle sales, it
has been the Department's long standing position that the
standard for determining whether a particular fee or charge is
to be excluded from the taxable sales price hinges on whether
the fee or charge is mandated by the state, its subdivision or
by any state or license tag agency or office. Thus
governmentally mandated fees such as tag, title, registration,
lien recording, or similar fees or any service fee charged by
such agency or office when separately stated should be excluded
from the taxable sales price.

CONCLUSIONS OF LAW

With respect to the levy of sales tax pursuant to s.
212.05(1)(k)1., F.S., on certain detective, burglar protection,
and other protection services classified under SIC industry
numbers 7381 and 7382, the criminal history check services
provided by the Florida Department of Law enforcement pursuant
to s. 790.065, F.S., do not fall within the purview of either of
such SIC industry numbers. Instead, the criminal history check
services provided by the Florida Department of Law Enforcement
pursuant to s. 790.065, F.S., come within the scope SIC industry
number 9221. Accordingly, the criminal history check services
provided by the Florida Department of Law Enforcement pursuant
to s. 790.065, F.S., do not constitute taxable detective,
burglar protection, or other protection services as contemplated
by s. 212.05(1)(k)1., F.S. Consequently, the $8 fee (the "Fee")
which must be collected form the potential purchaser of the
firearm pursuant to s. 790.065(1)(b), F.S., is not subject to
sales tax under s. 212.05(1)(k)1., F.S.

Next, we turn to the broader question of whether the Fee is
subject to sales tax on some other basis under the provisions
Chapter 212, F.S. The statutory definition of the term "sales
price" provided in s. 212.02(17), F.S., does not specifically
address the Fee. Neither is there an express exemption provided
elsewhere in Chapter 212, F.S., for the Fee. Further, the
provisions of s. 790.065, F.S., do not address whether the Fee
is exempt from sales tax. Inasmuch as the definition of the term
"sales price" provided in s. 212.02(17), F.S., constitutes a
statutory definition defining what is to be taxed, it must be
strictly construed against the taxing authority pursuant to Drum
Service Company, supra. Additionally, sound reasoning and
consistency suggests that the department's long standing policy
with respect to governmentally imposed fees resulting from motor
vehicle transactions should apply in a like fashion to the Fee
resulting from firearms sales. The fact that the object of the
sale is a gun rather than a car should be immaterial in
ascertaining whether a governmentally imposed fee resulting from
the sale is subject to sales tax.

Therefore, we hereby enter our finding that the Fee being

imposed by the State of Florida pursuant to s. 790.065(1)(b),
F.S., against the purchaser of a firearm falls beyond the
intended scope of the statutory definition of sales price
provided in s. 212.02(17), F.S. As such, the Fee should be
excluded from the amount on which sales tax is collected so long
as it is separately stated and identifiable apart from the
taxable elements of the sales price. It is suggested that a more
distinctive audit trail would be established if the Fee were
denominated on your invoices as the "FDLE Background Check Fee".
This would leave no uncertainty that the Fee shown on the
invoice is that imposed by s. 790.065(1)(b), F.S.

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. 14111