Could a newspaper printer refund tax after its customer supplied an exemption certificate late?

Subject

Refund After a Late Community-Newspaper Exemption Certificate

Plain-English summary

The customer could recover earlier printing tax if the publication actually qualified for the shopper or community-newspaper exemption and supplied a corrected certificate covering those earlier purchases. The first certificate only covered purchases on or after April 15, 1997, so it did not support the requested September 5, 1996 through April 10, 1997 refund.

To qualify, the publication had to be free, regularly published, primarily advertising, and distributed through mail, home delivery, or newsstands. No charge could be tied to distribution, and another distribution method would defeat the exemption described in the ruling.

If the customer produced a proper certificate effective from September 5, 1996, the printer was to reimburse the customer. The printer could then claim a credit within 60 months of remitting the tax or apply for a state refund, while retaining records of the tax paid in error and the exemption certificate.

What this means for you

A late certificate did not automatically erase prior tax. It had to state an effective period covering the earlier transactions, and the buyer still had to prove that the purchases substantively qualified for exemption.

The seller also had to refund the customer and keep documentation before recovering the money through a return credit or refund claim.

Common questions

Q: Did the April 15 certificate cover printing bought before that date? No. Its stated effective date only covered purchases on or after April 15, 1997.

Q: Could the customer submit a corrected certificate? Yes. The ruling required a certificate stating that qualifying printing purchases were exempt beginning September 5, 1996.

Q: What made the publication exempt? It had to be free, regularly published, primarily advertising, and distributed only through the qualifying methods described.

Q: Who refunded the customer first? The printer reimbursed the customer, then claimed a credit or applied to the Department.

Q: How long did the printer have to claim a credit? The historical ruling stated 60 months from the date the tax was remitted.

Citations and references

• Fla. Stat. § 212.08(7)(w) — qualifying shoppers and community newspapers
• Fla. Admin. Code r. 12A-1.008(10)(d) — exemption certificate for qualifying publication printing and inputs
• Fla. Admin. Code r. 12A-1.038(1) — certificate requirement cited in the facts
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-086

Original ruling text

SUMMARY

The taxpayer sought clarification regarding when sales tax is collected, pursuant to statute or rule, due to the purchaser's failure to provide the taxpayer with an exemption certificate, and the purchaser later provides the taxpayer with an exemption certificate, is the purchaser entitled to a refund for the period of time that it failed to provide the taxpayer with a certificate of exemption.

The Department responded by stating a refund could be obtained if a proper certificate of exemption is provided by the purchaser. The taxpayer may claim credit on the sales tax return or apply for a refund, within 60 months from the date of remitting the tax. The taxpayer should retain records in its files of the sales tax paid in error and the customer's exemption certificate.

Dec 09, 1997

Re: Technical Assistance Advisement 97A-086 Sales and Use Tax - Resale Certificate Provisions Section: 212.08, F.S. Petitioner: XXX (herein "Taxpayer") SUT #: XX

Dear :

This letter is a response to your petition postmarked September 9, 1997, for the Department's issuance of a Technical Assistance Advisement ("TAA") concerning the above referenced party and matter. Your petition has been carefully examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.

Discussion of Information

The following information was provided in your letter:

Taxpayer provides printing of a weekly newspaper to its client and has been printing the publication since September 5, 1996. Taxpayer has been collecting sales tax from the client in accordance with Rule 12A-1.038(1), F.A.C. This practice continued until April 15, 1997, when the client provided a "Shopper/Community Newspaper Exemption Certificate" to Taxpayer. Certificate states purchases of printing on or after April 15, 1997, are exempt. Taxpayer's client claims that it was a nontaxable entity during the entire period of September 5, 1996 through April 10, 1997, and therefore, claims a refund for all sales tax paid to the Taxpayer during this period. The Taxpayer charged the client sales tax for the period, because an exemption certificate was not received until April 15, 1997.

Requested Advisement

When sales tax is collected, pursuant to statute or rule, due to the purchaser's failure to provide the dealer with an exemption certificate, and the purchaser later provides the dealer with an exemption certificate, is the purchaser entitled to a refund for the period of time that it failed to provide the dealer with a certificate of exemption?

Discussion, Analysis, and Conclusion of Law

Section 212.08(7)(w), F.S., provides as follows:

(w) Certain newspaper, magazine, and newsletter subscriptions, shoppers, and community newspapers. -Likewise exempt are newspaper, magazine, and newsletter subscriptions in which the product is delivered to the customer by mail. Also exempt are free, circulated publications that are published on a regular basis, the content of which is primarily advertising, and that are distributed through the mail, home delivery, or newsstands. The exemption for newspaper, magazine, and newsletter subscriptions which is provided in this paragraph applies only to subscriptions entered into after March 1, 1997.

To be exempt from tax the shopper/community publications must be provided free of charge and distributed through the mail, home delivery, or newsstands. No charge may be associated with the distribution of the publication, nor can the publication be distributed by any other methods and still remain exempt from tax.

Rule 12A-1.008(10)(d), F.A.C., provides in part, as follows:

(d) In order for the producer of a shopper or community newspaper to exempt the purchase of printing of the shopper or community newspaper or to exempt the purchase of taxable items such as paper and ink which go into and become a part of a shopper or community newspaper, a blanket exemption certificate... should be provided to vendors....

Concerning the refund of taxes previously paid by Taxpayer's client on charges for printing, under Section 212.08(7)(w), F.S., to exempt "community newspapers" from tax under certain circumstances, Taxpayer's client may be entitled to a refund of sales tax paid to Taxpayer for printing purchased from September 5, 1996 through April 10, 1997, provided that it met the requirements as outlined above. To claim that exemption; however, customer needs to provide a certificate stating printing purchases are exempt on or after September 5, 1996. The certification provided only covers sales on or after April 15, 1997.

If a proper certificate of exemption is provided by the client to cover the entire period beginning on September 5, 1996, Taxpayer should reimburse the client for sales tax paid on the printing purchased from September 5, 1996 through April 10, 1997. The Taxpayer may claim credit on the sales tax return, if such credit is claimed within 60 months from the date of remitting the tax. Taxpayer should retain records in its files of the sales tax paid in error and the customer's exemption certificate.

Taxpayer may apply for a refund on the "Application for Refund From the State of Florida Department of Revenue," Form

DR-26 enclosed with this letter, and must provide documentation with its application to show that the items are exempt from tax and that the tax was refunded to its customers.

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 upon 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 from that which is 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 that 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 this response.

If you have further questions with regard to this matter and wish to discuss them, you may contact me at, (904) 488-8026. If you have specific questions and would like a written response, the request should be addressed to the Office of General Counsel, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443.

Kind Regards,

Alan R. Fulton
Senior Tax Specialist
Technical Assistance and
Dispute Resolution

ARF\tg

Enclosure: Application for Refund From the State of Florida Department of Revenue, Form DR-26 Ctrl No: 30892