Was a Florida sale exempt when the customer picked up the goods in Florida but held an export sales-tax number and supplied a blanket resale certificate?

Plain-English summary

The sale was not subject to Florida sales tax even though the customer personally picked up the goods in Florida.

The customer held a valid export sales-tax number issued by the Department and gave the seller a blanket resale certificate claiming the transaction as a sale for export. Following Graybar Electric Co. v. Department of Revenue, the Department treated that customer as a licensed exporter for the statutory export provision.

The decision therefore turned on the customer's licensed-exporter status and documentation, not merely its plan to take the fax-machine parts out of the country.

What this means for you

An in-state pickup was not automatically taxable under these facts. The seller had evidence that the buyer was a Department-recognized exporter and had received the buyer's blanket resale certificate.

Common questions

Q: Did the buyer take possession in Florida?
A: Yes. Its president personally picked up the fax-machine parts at the seller's Florida office.

Q: Why did the Department still find an exemption?
A: The buyer had a valid export sales-tax number and supplied a blanket resale certificate, so the Department followed Graybar and treated it as a licensed exporter.

Q: Is an intention to export enough by itself?
A: The ruling did not say that. Its conclusion relied on the customer's export registration and resale documentation.

Citations and references

• Fla. Stat. § 212.06(5)(a)1 — property produced or manufactured for export
• Fla. Admin. Code r. 12A-1.064 — sales in interstate and foreign commerce
• Graybar Electric Company, Inc. v. Department of Revenue, 347 So.2d 718 (Fla. 3 DCA 1977)
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95A-031

Original ruling text

Aug 08, 1995

Re: TAA 95A-031
Sales Tax; Sales for Export
Section 212.06, Florida Statutes

Dear

This is in response to your letter dated March 20, 1995, in
which you requested the issuance of a Technical Assistance
Advisement ("TAA") regarding the taxability of goods sold to
your customer, XXXX (hereinafter referred to as "Customer").
Your letter provides in part:

"On XXXX (hereinafter Company) entered into a transaction
with [Customer] to sell [Customer] fax machine parts. The
president of [Customer],..., went to our district office...
to pick up those parts.

[Customer] was invoiced (see attached) for those parts on
XXXX. The invoice included Florida sales tax. [Company]
was then notified that the parts would be shipped out of
the country... by [Customer] and a claim for exemption from
sales tax was made by [Customer] based on Rule 12A-1.064.
A Blanket Certificate of Resale was then provided to
[Company], along with a copy of [Customer's] Certificate of
Registration (attached).

"Per Rule 12A-1.064[(1)(b)], [Company]... was required to
deliver the goods outside the state, to a common carrier, a
transportation terminal, or to a customs broker for this
exemption to apply. That was not the case since the buyer
went to our office and personally picked up the goods.
More to the point, paragraph [(2)(a)] specifically states
`if goods are sold within this state and possession is
taken by the purchaser within the state, the sales tax
applies, irrespective of the fact the goods are to be
transported outside of Florida by the purchaser immediately

upon delivery'.

"An exemption claim can be made when delivery is made instate to a nonresident dealer, per paragraph [(2)(b)].
[Customer] is a resident business as evidenced by the
Florida Registration Certificate. Therefore, this
exemption clause is inapplicable.

[Company] contends that this transaction is taxable. The
[Customer] disagrees."

RELEVANT AUTHORITY
Section 212.06(5)(a)1., F.S., provides in part:

"(5)(a)1. ... [I]t is not the intention of this chapter to
levy a tax upon tangible personal property imported,
produced, or manufactured in this state for export,
provided that tangible personal property may not be
considered as being imported, produced, or manufactured for
export unless the importer, producer, or manufacturer
delivers the same to a licensed exporter for exporting or
to a common carrier for shipment outside the state or mails
the same by United States mail to a destination outside the
state;...." [E.S.]

DISCUSSION/RESPONSE

The issue of the application of sales and use tax relative
to the taxation of goods sold to a licensed export dealer was
specifically addressed by the Third District Court of Appeal in
the matter of Graybar Electric Company, Inc. v. Department of
Revenue, 347 So.2d 718 (Fla. 3 DCA 1977). In this case, the
Court held that two foreign corporation subsidiaries based in
Florida, having been issued export sales tax numbers by the
Department of Revenue and in the absence of any other Department
export licensing procedures, are deemed to be "licensed
exporters" for the purpose of statute, which exempts from state
sales tax tangible personal property manufactured and sold in
Florida and delivered to such corporation for shipment to a
foreign buyer.

As evidenced by "Customer's" certificate of registration
and the Department's records, "Customer" holds a valid export
sales tax number issued by the Department. Inasmuch as
"Customer" has extended the blanket certificate of resale
claiming such sale for export, the Department is guided by the
court's decision in Graybar Electric, and concludes that the
transaction in question is not subject to sales 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,

Bonnie Everton
Technical Assistant

/e
Cont. #20502