SUMMARY
QUESTION: Whether a taxpayer, who is not a licensed exporter, can export a vehicle from the State of Florida by taking possession of the vehicle at a Florida dealership and subsequently driving the vehicle to Canada.
ANSWER: A taxpayer, who is not a licensed exporter, cannot export a vehicle from the State of Florida by taking possession of the vehicle at a Florida dealership and subsequently driving the vehicle to Canada.
December 20, 2007
Re:Technical Assistance Advisement 07A-046
Sales and Use Tax – Vehicle Export
Section 212.06, Florida Statutes (F.S.)
Rule 12A-1.0015, Florida Administrative Code (F.A.C.)
Rule 12A-1.007, F.A.C.
XXX [the taxpayer]
Dear :
This is a response to your letter of September 28, 2007, mailed on November 7, 2007, requesting a Technical Assistance Advisement (TAA) regarding the above-referenced matter. This response to your request constitutes a TAA under Chapter 12-11, Florida Administrative Code (F.A.C.), and is issued to you under the authority of Section 213.22, Florida Statutes (F.S.).
FACTS
The taxpayer is a Canadian citizen who purchased a XXX from XXX [the dealership] in XXX, “for the sole and express purpose of exporting to Canada as soon as the paperwork … was provided.” When the taxpayer purchased the vehicle, the dealership informed the taxpayer that he was obligated to pay $1,694.79 in Florida sales tax. The taxpayer paid the applicable sales tax and remained in Florida awaiting the title to the vehicle. The dealership provided the vehicle title to the taxpayer on April 5, 2007, and the taxpayer left Florida on April 8, 2007, to return to Canada.
ISSUE
Whether the taxpayer is entitled to a refund of $1,694.79 in Florida sales tax paid with the purchase price of a vehicle when the taxpayer took possession of the vehicle in the State of Florida and subsequently drove it to Canada.
REQUESTED ADVISEMENT
The taxpayer requests that the Department issue a TAA stating that the taxpayer properly exported his vehicle from Florida in accordance with s. 212.06, F.S.
TAXPAYER’S POSITION
The taxpayer states that “the timing of said purchase was done to facilitate finalizing the paperwork in support of our immediate exporting and registration of said vehicle in Canada.” The taxpayer asks that the Department review his case “in light of the intent of the purchase.” The taxpayer states that his “decision to take delivery and drive rather than ship the vehicle should not preclude [me] from receiving a refund of the Florida Sales Tax paid.”
APPLICABLE LAW
Section 212.06(5)(a)1., F.S., provides, in part:
… [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 ….Every retail sale made to a person physically present at the time of sale shall be presumed to have been delivered in this state. (emphasis supplied)
Rule 12A-1.0015(2), F.A.C., provides, in part:
(a) A dealer is required to collect tax on sales of tangible personal property when the property is delivered to the purchaser or the purchaser's representative in Florida, whether the disclosed or undisclosed intention of the purchaser is to transport the property to a location outside Florida, or whether the property is actually so transported….
(b) When a dealer sells tangible personal property, commits the property to the exportation process at the time of sale, and the exportation process remains continuous and unbroken until the property is exported from Florida, the dealer is not required to collect tax. The intent of the seller and the purchaser to export the property is not sufficient to establish that the property is not subject to tax in Florida…. The following are examples of methods to commit the property to the exportation process at the time of sale:
1. The dealer is required by the terms of the sale contract to deliver the property outside Florida using the dealer's own mode of transportation;
2. The dealer is required by the terms of the sale contract to mail the property by United States mail to a destination located outside Florida; or
3. The dealer is required by the terms of the sale contract to deliver the property to a carrier, licensed customs broker, or forwarding agent for final and certain movement of the property to a destination located outside Florida.
* * *
(e) Regardless of the evidence maintained by the dealer to document delivery of the property to a common carrier or a licensed customs broker for shipment to a location outside Florida, or the mailing of the property by the United States mail to a location outside Florida, tax is due when the property is diverted in transit to the purchaser or the purchaser's agent or representative in Florida and such person takes possession in Florida, or when for any other reason the property is not delivered outside Florida. (emphasis supplied)
* * *
Rule 12A-1.007, F.A.C., provides, in part:
(1)(a) The sale, including occasional or isolated sales, the use, consumption, or storage for use in this state of any aircraft, boat, mobile home, motor vehicle, or other vehicle of a class or type required to be registered, licensed, titled, or documented in this state or by the United States Government is taxable on the full sales price ….
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(8)(i) A motor vehicle dealer or a licensed export-import dealer registered under the sales and use tax law must obtain and provide an ocean bill of lading from a regularly operated transportation company engaged in foreign commerce to prove export and exemption from Florida tax, except as otherwise provided in subsection (6), above. Claimed shipment abroad in privately operated vessels or vehicles where no bill of lading is issued as proof of export of specific items cannot be allowed without tax. Such claimed shipment is construed to be acceptance of delivery in Florida by purchaser and is taxable. (emphasis supplied)
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DISCUSSION AND RESPONSE
All sales of motor vehicles in the state of Florida are taxable on the full sales price, unless specifically exempt under Chapter 212, F.S. See Rule 12A-1.007(1)(a), F.A.C. Section 212.06(5)(a)1., F.S., provides that every retail sale made to a person physically present at the time of sale shall be presumed to have been delivered in Florida. However, s. 212.06(5)(a)1., F.S., provides an export exemption when a dealer sells a vehicle to a customer located outside the State of Florida. In order to receive this exemption, the dealer must commit the property to the exportation process at the time of sale, and the exportation process must remain continuous and unbroken until the property is exported from Florida. See Rule 12A-1.0015(2)(b), F.A.C.
Section 212.06(5)(a)1., F.S., provides methods to commit property to the exportation process at the time of sale. A dealer must: 1) deliver the goods to a licensed exporter for exporting; 2)deliver the goods to a common carrier for shipment outside Florida;or 3) mail the goods by United States mail to a destination outside Florida. See s. 212.06(5)(a)1., F.S. Additionally, a dealer may commit property to the exportation process when: 1) the contract requires the dealer to deliver the property outside Florida using the dealer's own transportation; or 2) the contract requires the dealer to deliver the property to a carrier, licensed customs broker, or forwarding agent for final and certain movement of the property to a destination outside Florida. See Rules 12A-1.0015(2)(b) and 12A-1.007(7), F.A.C. Claimed shipment abroad in privately operated vehicles where no bill of lading is issued as proof of export of specific items cannot be allowed without tax.Such claimed shipment is construed to be acceptance of delivery in Florida by purchaser and is taxable. See Rule 12A-1.007(8)(i), F.A.C.
In the present case, the taxpayer did not use any of the approved methods of exportation provided by the Florida Statutes and the Florida Administrative Code. Rule 12A-1.0015(2)(e), F.A.C, states thatregardless of the evidence the dealer may have to support an export sale, tax is due when the property is diverted in transit to the purchaser in Florida and such person takes possession of the property in Florida. The taxpayer took possession of the vehicle at the time of purchase and broke any potential chain of export. Therefore, the sale does not qualify for the export exemption, and tax was due at the time of purchase. The outcome does not change when a purchaser subsequently drives the vehicle out of Florida after taking possession of the vehicle; once he or she takes possession in Florida, the export chain is permanently broken, and export is no longer continuous.
The taxpayer argues that “the timing of this purchase demonstrates [my] plan to immediately take the vehicle back to Canada.” However, aFlorida dealer is required to collect tax on sales of tangible personal property when the property is delivered to the purchaser in Florida, whether the disclosed or undisclosed intention of the purchaser is to transport the property to a location outside Florida, or whether the property is actually so transported. See Rule 12A-1.0015(2)(a), F.A.C. The intent of the seller and the purchaser to export the property is not sufficient to establish that the property is not subject to tax in Florida. See Rule 12A-1.0015(2)(b), F.A.C. Accordingly, the taxpayer’s intention to drive the vehicle to Canada, and subsequent successful navigation into Ontario, is not evidence to overturn this taxable Florida sale. The dealership properly collected the applicable sales tax at the time of purchase, and a refund of this sales tax is not appropriate.
CONCLUSION
The taxpayer is not entitled to a refund of $1,694.79 in Florida sales tax paid with the purchase price of the vehicle, because the taxpayer took possession of the vehicle in the State of Florida.
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, your request and related backup documents are public records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In an effortto protect confidentiality, we request you provide the undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your response should be received by the Department within 15 days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may contact me directly at (850) 488-8565.
Sincerely,
Matt Crockett
Senior Tax Specialist
Technical Assistance & Dispute Resolution
Record ID: 38376