Could a seller rely on customers' Florida export exemption certificates without separately proving each shipment left the state?

Subject

Exemption Certificates

Plain-English summary

The seller could accept the two customers' completed blanket exemption certificates and did not need separate proof that each purchase was exported. Both customers held valid Florida export sales tax numbers and certified that the purchases were for export.

The seller was registered in Florida but located outside the state. Goods shipped from Florida either went to one customer's Florida freight forwarder or directly to the other Florida customer. Ordinarily, delivery in Florida requires strong documentation of an uninterrupted export process.

Florida treated holders of its export sales tax numbers as licensed exporters under the cited case. Because the Department confirmed the numbers and found the submitted Purchaser's Blanket Resale and Exemption Certificates compliant, the certificates relieved the seller from gathering the additional dock receipts, bills of lading, or other export proof described in the export rule.

What this means for you

The ruling did not approve reliance on any paper labeled “exempt.” The seller had Department-verified export numbers and reviewed certificates containing the registration and transaction information required by rule. Sellers should validate current credentials and preserve the certificates for audit.

Common questions

Q: Was delivery to a Florida freight forwarder automatically exempt? No. The ruling relied on the purchaser's valid export number and compliant exemption certificate, not delivery location alone.

Q: Did the seller need a bill of lading or shipper's export declaration for these sales? Not under the specific certificate facts approved in the ruling.

Q: Could an incomplete certificate provide the same protection? No. The Department said the certificates had to meet Rule 12A-1.038's completion requirements.

Citations and references

• Fla. Stat. § 212.06(5)(a)1. — delivery to a licensed exporter or carrier for export
• Fla. Admin. Code r. 12A-1.038(1), (3)-(5) — required resale and exemption certificate information
• Fla. Admin. Code r. 12A-1.064(1) — delivery in Florida and uninterrupted export documentation
• Graybar Electric Co. v. Department of Revenue, 347 So. 2d 718 (Fla. 3d DCA 1977)
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98A-054

Original ruling text

SUMMARY

The Taxpayer is located out of state but licensed to collect sales tax in Florida. The product sold is shipped from a Florida location to a customer's freight forwarder in Florida or direct to a Florida customer. Both customer's have provided you with a copy of an exemption certificate in lieu of paying Florida sales tax. The Taxpayer questions whether the exemption certificated provided are sufficient documentation to exempt these customers from Florida sales tax, and relieve such company from obtaining proof of the export of the same. The Department determined that both customers held a valid export sales tax number. These customers completed a Purchaser's Blanket Resale and Exemption certificate, claiming each sale for export. Therefore, the exemption documentation required under Rule 12A-1.064, F.A.C., is not necessary to support the company's actions.

Jul 14, 1998

Re: Technical Assistance Advisement 98(A)-054 Sales and Use Tax - Exemption Certificates Section 212.06, F.S. Rules 12A-1.038, 12A-1.064, F.A.C.

Dear :

This is a response styled a Technical Assistance Advisement, to your letter dated XXX, concerning the above referenced matter. Your correspondence has been carefully examined and the Department finds it to be in compliance with the 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.

Stated Facts

The following facts were provided in your letter:

You are licensed to collect sales tax in Florida. The product you sell is shipped from a Florida location to your customer's freight forwarder in Florida. Your customer is located in New York. The customer has provided you with a completed Purchaser's Blanket Resale and Exemption Certificate which provides their Florida registration number. A copy of the exemption certificate was submitted for review.

You further indicate that often, the product you sell is shipped from a Florida location to your customer who is located in Florida. They too, provided you with a completed Purchaser's Blanket Resale and Exemption Certificate which provides their Florida registration number. A copy of the exemption certificate was submitted for review.

Requested Advisement

Are the exemption certificates attached sufficient documentation to exempt these customers from Florida sales tax, and relieve your company of the responsibility of collecting and remitting Florida sales tax on such transactions and to relieve your company from obtaining proof of the export for the same?

Law and Analysis

Rule 12A-1.038, F.A.C., has been promulgated by the Department to alert dealers as to the required information which must be stated on any resale and exemption certificate extended to a vendor when a dealer is making an exempt purchase of otherwise taxable tangible personal property. This rule provides requirements in subsections (1), (3), (4), and (5), with the relevant language reading as follows:

12A-1.038 Resale and Exemption Certificates.

(1) It is the specific legislative intent that each and every sale, admission, use, storage, consumption, or rental is taxable under Chapter 212, F.S., unless such sale, admission, use, storage, consumption, or rental is

specifically exempt. The exempt status of the transaction must be established by the dealer. Unless the dealer shall have taken from the purchaser a certificate signed by the dealer or the dealer's authorized representative to the effect that the property or service was purchased for resale and bearing the name and address of the purchaser, the effective date of the certificate and the number of his dealer's certificate of registration, or a certificate signed by an authorized representative of the organization bearing the number of the organization's consumer's exemption certificate, and the effective date of the certificate, and the expiration date of the certificate, the sale shall be deemed to be a taxable sale at retail....

(3)(a) A resale certificate is required from every purchaser who purchases tangible personal property or service for resale, subject to the provisions of subsection (1) of this rule. Otherwise, the dealer will be required to collect and remit the tax to the Department of Revenue....

(c) Purchases for resale outside the State of Florida by unregistered, out-of-state dealers are governed by Rule 12A-1.064(2)(b), F.A.C....

(4) A dealer shall refuse to accept a resale certificate, except as provided in Rule 12A-1.064(2)(b), F.A.C., and shall collect the tax unless the purchaser has obtained a dealer's certificate of registration from the Department of Revenue and the number of his dealer's certificate of registration is stated on the resale certificate.

(5)(a) Any resale certificate containing the statement to the effect that a purchase is for resale which contains the date, purchaser's name, address, dealer's certificate of registration number, effective date of the certificate, and the dealer's or authorized representative's signature shall be sufficient compliance with the law only to the extent provided by this rule. Such certificate shall show that the property or service was purchased for resale or for incorporation as a material part of other tangible personal

property to be produced for resale by manufacturing, assembling, processing, or refining, or for some other purpose which is exempt under the law. Resale certificates may be given only by a purchaser who has obtained a dealer's certificate of registration from the Department of Revenue....

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;....

Rule 12A-1.064(1)(a), (b)2., F.A.C., provides:

(1)(a) Sales tax is imposed on the sales price of each item or article of tangible personal property, unless otherwise exempt, when the property is delivered to the purchaser or his representative in this state. However, the tax does not apply to tangible personal property irrevocably committed to the exportation process at the time of sale, when such process has been continuous and unbroken.

(b) Intent of the seller and the purchaser that the property will be exported is not sufficient to establish the exemption; nor does delivery of the property to a point in Florida for subsequent transportation outside Florida necessarily constitute placing the property irrevocably in the exportation process. Tangible personal property shall be deemed committed to the exportation process if:...

2. The dealer is required by the terms of the sale contract
   to deliver the goods to a common carrier for final and certain movement of such property to its out of state

destination. Sales by a Florida dealer are exempt when the dealer delivers the merchandise to the transportation terminal for shipment outside this state and secures a dock or warehouse receipt and a copy of the bill of lading. On shipments to points outside the United States, a shipper's export declaration shall also be obtained;....

The purchase for export issue 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, in the absence of any other formalized state export-licensing procedures, corporations having export sales tax numbers issued by the Department of Revenue were "licensed exporters" for purpose of statute which exempts from state sales tax tangible personal property manufactured for export and delivered for exporting to a "licensed exporter"; therefore, goods manufactured and sold in Florida and delivered to such corporations for shipment to a foreign buyer were not subject to state sales tax.

The Department's records indicate that each of your customers holds a valid export sales tax number. These customers have provided the Purchaser's Blanket Resale and Exemption Certificate, claiming each sale for export. Therefore, the exemption documentation required under rule 12A-1.064(1)(b)2., F.A.C., is not necessary to support your company's actions.

Response

The Department concludes that the exemption certificates are sufficient documentation to exempt these customers from Florida sales tax. The Department also agrees that the completed Purchaser's Blanket Resale and Exemption Certificate evidences an exempt purchase of otherwise taxable tangible personal property and relieves your company from any additional responsibility of obtaining proof of the export sale.

Rule 12A-1.038, F.A.C., which deals with Florida resale and exemption certificates, specifically identifies the requirements for proper completion of the Purchaser's Blanket Resale and Exemption Certificate. The Purchaser's Blanket Resale and

Exemption Certificates provided to you by your customers must meet those requirements in order to be in strict compliance with the rule. Based on the applicable rule, both certificates included with your correspondence are in compliance and should be presented and accepted in case of audit.

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,

Janet Cumbie
Tax Law Specialist
Technical Assistance & Dispute Resolution (850)922-4847

JCC\
Control No: 34479