For an internet-based flower business that takes orders online and uses wire services to fulfill deliveries worldwide, when is Texas sales tax due, and to which local jurisdiction?

Plain-English summary

A prospective business planned an Internet flower service bureau: a website taking customer orders for flowers to be delivered anywhere in the world, fulfilled through a standard flower wire service network rather than the ordering business's own delivery drivers. The Comptroller laid out the full tax picture under 34 TAC § 3.307 (Florists), which is built around one core organizing principle: tax follows the florist who took the order, not the florist who made the delivery.

• Texas delivery, Texas order-taker: taxable to the ordering florist, even though an unrelated florist actually makes the delivery. The delivering florist doesn't owe tax on the amount it receives for fulfilling the order.
• Out-of-state delivery, Texas order-taker, Texas-purchased items: still taxable — it doesn't matter whether the ordering florist or an out-of-state florist makes the actual delivery.
• Texas florist fulfilling an order taken outside Texas: no Texas use tax owed on what the fulfilling florist receives.
• Delivery charges: always taxable, whoever charges them, even if stated separately from the flower charge.
• Telephone and telegram charges used to transmit orders: taxable even if separately stated to the customer, and the florist cannot give the telecom provider a resale certificate instead of paying tax — the telecom service isn't resold to the florist's customer, it's a business expense the florist passes along as part of the cost of the arrangement.
• Component materials (wires, stems, vases) that end up incorporated into a finished flower arrangement: not separately taxable when the florist buys them.
• Local sales tax: owed to the local taxing jurisdiction of the florist who took the order, not the one who delivered — including, for a multi-location florist, the specific location that took the order. Local use tax generally is not triggered just by delivering into a different local jurisdiction at another florist's instruction.

What this means for you

Online and wire-service florists

Build your tax compliance around the order-taking location, not the delivery location — that's what determines both whether Texas sales tax applies at all and which local jurisdiction gets the local tax. This matters even more for an internet-based model where orders and deliveries routinely happen in different states or cities.

Florists using wire services for fulfillment

The florist actually making the delivery, at another florist's instruction, generally doesn't owe additional Texas tax or use tax on the amount it receives for that fulfillment work — the tax obligation sits with the florist who took the original order.

Accountants and tax professionals serving florists

This letter is a comprehensive single-source reference for florist wire-service tax mechanics: order-vs-delivery sourcing, delivery charge taxability, the telecom-service resale-certificate trap, and component-material treatment — worth keeping as a checklist for any florist client using wire-service fulfillment.

Common questions

Q: Which florist owes Texas sales tax when an order is fulfilled through a wire service — the one who took the order, or the one who delivered it?
A: The florist who took the order owes the tax (when the delivery is in Texas or the items were purchased in Texas); the fulfilling florist generally does not owe additional tax on its fulfillment fee.

Q: Are delivery charges taxable even if listed separately from the flower charge?
A: Yes, delivery charges are always taxable, regardless of separate statement.

Q: Can a florist buy telephone or telegram services tax-free with a resale certificate since they're used to transmit customer orders?
A: No — the telecom service isn't resold to the customer; it's a business expense of the florist, and the charge is taxable even if separately stated to the customer.

Q: Which local jurisdiction gets the local sales tax on a florist transaction?
A: The jurisdiction where the florist that took the order is located — not where the delivery happens, and not the delivering florist's jurisdiction if different.

Q: Can any florist or online flower business rely on this exact rundown?
A: Not directly. This is a Texas STAR letter ruling binding on the Comptroller only for the taxpayer it addresses (34 Tex. Admin. Code Rules 3.1, 3.10), though the underlying Rule 3.307 is generally applicable to florists.

Citations and references

Rules and publications:

• 34 Tex. Admin. Code § 3.307 (Florists)
• Comptroller Publication 94-105, "Guidelines for Collecting Local Sales and Use Tax"

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200010826L

Original ruling text

October 18, 2000

Dear **:

Thank you for your recent letter regarding your new business and Texas sales
tax.

You stated that you are planning an Internet flower service bureau. You will
have a web site and will take orders for flowers to be delivered anywhere in
the world. You will utilize one of the flower wire services for actual order
fulfillment.

Sales tax is due on amounts charged by a Texas florist for taxable items
delivered within Texas even though the florist taking the order instructs an
unrelated florist to make delivery. The tax is not due on the amount received
by an unrelated florist making the delivery.

Sales tax is due on amounts charged by a Texas florist for taxable items
purchased in Texas for delivery outside the state. Tax is due whether the items
are delivered by the florist who took the order or by an unrelated florist
outside Texas who is instructed to make delivery.

Use tax is not due on amounts received by a Texas florist who makes deliveries
in Texas at the instructions of an unrelated florist taking an order outside
Texas.

Delivery charges, whether charged by a florist taking an order or by an
unrelated florist, are taxable even though stated separately from charges for
taxable items.

Sales tax is due on charges for telephone calls or telegrams even when
separately stated to the customer. The florist may not give the provider of
telecommunications services a resale certificate in lieu of tax. The
telecommunications service is not resold to the florist's customer but is used
by the florist in making sales of floral arrangements. The charge for the
telecommunications service is passed on to the florist's customer as an expense
connected with the sale of the arrangement.

Sales tax is not due on the purchase of wires, stems, vases, etc., which are
later sold as part of a flower arrangement.

Local sales tax is due to the local taxing jurisdiction of a florist taking an
order for a taxable item. Local tax is not due to the local taxing jurisdiction
of an unrelated florist making delivery. If a florist has more than one place
of business, local sales tax is due based on the local taxing jurisdiction
where the place of business taking the order is located.

Local use tax is not due when a florist located outside a local taxing
jurisdiction takes an order and delivers the order into a local taxing
jurisdiction or instructs an unrelated florist to make delivery in a local
taxing jurisdiction. Local use tax is not due on amounts received by a Texas
florist who makes a delivery in a local taxing jurisdiction at the instructions
of an unrelated florist taking an order either outside the state or outside a
local taxing jurisdiction.

I enclosed a copy of Rule 3.307 "Florists" and publication 94-105 "Guidelines
for Collecting Local Sales and Use Tax" for your review.

This opinion is based on the facts presented. Additional or different facts
may yield different results.

You may call me toll free 1-800-531-5441, extension 5-9787, if you have any
questions or need more information. The direct line is 512/305-9787. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Philip Knisely
Tax Policy Division