Could a corporate purchasing-card statement replace vendor invoices for Florida sales-and-use-tax records?

Subject

Record Retention

Plain-English summary

A corporate purchasing-card statement could replace vendor-generated invoices only when it captured all information normally shown on those invoices, including enough ship-to information to identify the precise taxing jurisdiction. The system already recorded the vendor, location, card number, charge, sales tax, processing date, purchase description, and ship-to zip code. The Department said the full ship-to address should be captured because a zip code alone might not identify the correct local-option-tax jurisdiction.

When the jurisdiction could not be identified precisely, the statement was still reliable transaction information, but the purchaser needed additional documentation to prove the correct tax was collected or remitted.

For purchases on which the client owed Florida use tax, the statement could document the transaction but did not postpone the tax due date. A later statement cycle or processing date also did not establish reasonable cause for compromising late-payment penalties.

What this means for you

Purchasing-card and expense systems need tax-audit fields, not merely accounting totals. Preserve the full ship-to address and actual transaction date, distinguish tax collected from tax owed directly, and do not let a monthly statement cycle delay use-tax reporting.

Common questions

Was a ship-to zip code enough? Not necessarily. The Department said it might fail to identify the correct local-option-tax jurisdiction and recommended capturing the entire ship-to address.

Could an incomplete statement still be used? Yes, as reliable information about the transaction, but additional documentation was required to substantiate the proper tax.

Did receipt of the statement extend the use-tax deadline? No. Tax timing followed the transaction and statutory monthly due dates, not the statement's receipt or processing date.

What happened to TAA 94A-57? This amended advisement expressly replaced the November 7, 1994 ruling.

Citations and references

• Fla. Stat. §§ 212.06(1), 212.07(2) and (9), 212.13(2), 212.15(1), and 213.35
• Fla. Admin. Code r. 12A-1.093(1)-(3)
• Fla. Stat. § 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94A-57R

Original ruling text

Status: Revises TAA 94A-57 issued November 7, 1994.

Dec 23, 1994

Re: Technical Assistance Advisement 94A-57R Sales and Use Tax - Record Retention Sections 212.06 212.07, 212.13, 212.15, 213.35, F.S. Rule 12A-1.093, F.A.C.

Dear :

This amended Technical Assistance Advisement is in response to your request for clarification on the third paragraph of the determination issued in Technical Assistance Advisement 94A-57, dated November 7, 1994. The original petition, received April 11, 1994, requested the Department's issuance of a Technical Assistance Advisement concerning the above referenced matter. This amended response constitutes a Technical Assistance Advisement under Chapter 12-11, Florida Administrative Code, issued to you under the authority of s. 213.22, F.S., and replaces Technical Assistance Advisement 94A-57, dated November 7, 1994.

DISCUSSION OF FACTS

Your company has developed a corporate purchasing system whereby your clients may eliminate paperwork and consolidate invoices. This system allows your client to use a corporate purchasing card to make low-dollar direct business purchases. The system consolidates supplier invoices on a monthly statement which will capture the vendor name and location, including state, city, and zip code, the card number, the amount of the charge, the amount of sales tax collected, the processing date, and the nature of the item or service purchased.

REQUESTED ADVISEMENT

Your petition requests that the Department of Revenue consider whether the statements generated by the corporate

purchasing system constitute an acceptable substitute for vendor generated invoices, for purposes of substantiating purchaser compliance with state sales and use tax laws, when the appropriate taxing jurisdiction, based on the point of sale, can be precisely identified. You have also requested that the Department of Revenue consider if, when the appropriate taxing jurisdiction can not be precisely identified, the statements generated by the system are acceptable as accurate information concerning the transaction. In these cases, the statement would confirm the taxable transaction and your client would be responsible for providing additional information to document that the appropriate rate of tax was paid for the particular taxing jurisdiction.

DISCUSSION AND ANALYSIS OF LAW

Section 212.13(2), F.S., provides, in pertinent part:

"(2) Each dealer, as defined in this chapter, shall secure, maintain, and keep as long as required by s. 213.35 a complete record of tangible personal property or services received, used, sold at retail, distributed or stored, leased or rented by said dealer, together with invoices, bills of lading, gross receipts from such sales, and other pertinent records and papers as may be required by the department for the reasonable administration of this chapter...."

Section 213.35, F.S., provides:

"Each person required by law to perform any act in the administration of any tax enumerated in s. 72.011 shall keep suitable books and records relating to that tax, such as invoices, bills of lading, and other pertinent records and papers, and shall preserve such books and records until expiration of the time within which the department may make an assessment with respect to that tax pursuant to s. 95.091(3)."

Rule 12A-1.093(1), (2), and (3), F.A.C., provides:

"(1) The Department of Revenue has the power to prescribe the records to be kept by all persons subject to the taxes

imposed by Chapter 212, F.S.
"(2) Each dealer defined in Chapter 212, F.S., each licensed wholesaler, and any other person subject to the tax imposed by Chapter 212, F.S., shall keep and preserve a complete record of all transactions, together with invoices, bills of lading, gross receipts from sales, RESALE CERTIFICATES, CONSUMER EXEMPTION CERTIFICATES and other pertinent records and papers as may be required by the Department of Revenue for the reasonable administration of Chapter 212, F. S., and such books of account as may be necessary to determine the amount of tax due thereunder. "(3) All such books, invoices and other records shall be open for inspection by the Department of Revenue at all reasonable hours at the dealer's store, sales office, warehouse or place of business located in this state. Any dealer who maintains such books and records at a point outside this state shall make such books and records available for inspection by the Department of Revenue where the general records are regularly kept."

Section 212.15(1), F.S. provides, in pertinent part:

"(1) The taxes imposed by this chapter shall...become state funds at the moment of collection and shall for each month be due to the department on the first day of the succeeding month and be delinquent on the 21st day of such month...."

Section 212.07, F.S., provides, in pertinent part:

"(2) ...[T]he amount of the tax shall be separately stated as Florida tax on any charge ticket, sales slip, invoice, or other tangible evidence of sale...." "(9) Any person who has purchased at retail, used, consumed, distributed, or stored for use or consumption in this state tangible personal property, admissions, communication or other services taxable under this part, or leased tangible personal property, or who has leased, occupied, or used or was entitled to use any real property, space or spaces in parking lots or garages for motor vehicles, docking or storage space or spaces for boats in boat docks or marinas, and cannot prove that the tax levied by this chapter has been paid to his vendor,

lessor, or other person is directly liable to the state for any tax, interest, or penalty due on any such taxable transactions."

Section 212.06(1), F.S., provides, in pertinent part:

"(1)(a)...The full amount of the tax on a credit sale, installment sale, or sale made on any kind of deferred payment plan shall be due at the moment of the transaction in the same manner as on a cash sale."

CONCLUSIONS OF LAW

The records prescribed by the Department of Revenue include invoices, bills of lading, sales receipts, and other records or papers showing that the proper tax was collected on all transactions. The information which is normally captured on these documents includes vendor name and location, the items purchased, the shipping location, and the appropriate tax rate and the amount of Florida tax collected.

To be considered an acceptable substitute for vendor generated invoices, the statements generated by your corporate purchasing card system must capture all information which is normally captured on a vendor invoice or other sales document. This information must include the shipping location so that the appropriate taxing jurisdiction may be identified. Your purchasing card system currently captures the vendor name and location, including state, city, and zip code, the card number, the amount of the charge, the amount of sales tax collected, the processing date, the nature of the item or service purchased, and the ship-to zip code.

The information captured by your purchasing card system will identify a state taxing jurisdiction. However, the ship-to zip code alone may not properly identify the appropriate taxing jurisdiction for purposes of determining any local option taxes which may be due. Therefore, you may wish to modify your purchasing card system to capture the entire ship-to address so that the appropriate taxing jurisdiction may be precisely identified. With this information, the purchasing card statement will be considered an acceptable substitute for vendor

generated invoices.

If your purchasing card client(s) makes Florida taxable transactions and Florida Sales Tax is not collected from the vendor, your client(s) must pay Florida Use Tax directly to the State of Florida. Sales or Use Tax is due at the moment of the transaction on all cash sales, credit sales, installment sales, or sales made on any kind of deferred payment plan. In addition, this tax is due on the first day of the month following the month of the transaction. If the purchasing card statement is issued on a cycle other than a calendar month, your client(s) must be aware that tax may be due prior to receipt of the purchasing card statement. Also, if the statement does not identify the transaction date, your client(s) must be aware that the processing date may be in a month other than the transaction date. In these cases, your client(s) may need documentation of the transaction prior to receipt of the purchasing card statement, or documentation to substantiate the actual transaction date, to ensure that Florida Use Tax is paid in a timely manner.

DETERMINATION

Where the appropriate taxing jurisdiction can be precisely identified on the statement generated by your purchasing card system, the statement will be considered an acceptable substitute for vendor generated invoices.

Additionally, when the appropriate taxing jurisdiction can not be precisely identified, your purchasing card system statements will be considered as reliable information concerning the transaction, but will not be considered an acceptable substitute for vendor generated invoices. In these instances, your client must provide additional documentation to substantiate that the proper tax was collected or remitted.

Furthermore, where your client is responsible for Florida Use Tax, the statement generated by the purchasing card system will be considered acceptable as accurate information concerning the transaction. However, just as a taxpayer cannot extend the due date or payment of Florida Use Tax based on receipt of a

vendor generated invoice, your client will not be permitted to extend the due date or payment of Florida Use Tax based on receipt of the purchasing card system statement or the processing date of the transaction. In addition, just as receipt of a vendor generated invoice after the date Florida Use Tax is due and payable is not considered reasonable cause for compromise of late payment penalties when Use Tax is paid on receipt of such invoice, receipt of the statement generated by the purchasing card system after the date Florida Use Tax is due and payable will not be considered reasonable cause for compromise of late payment penalties when Use Tax is paid upon receipt of the statement.

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,

Bobbie Cone
Tax Law Specialist