Technical Assistance Advisement
Page 1
SUMMARY
Question: Is the Taxpayer providing a nontaxable service transaction when it sells professionally written XXXXX Modules that enable its customers to study college courses in their own home at their own pace?
Answer: The Taxpayer is not providing an exempt professional service transaction that involves sales as inconsequential elements for which no separate charges are made. The Taxpayer is selling tangible personal property, in the form of individually priced Modules, with the specific services provided to its customers as a part of the sales price.
October 25, 2007
XXX
XXX
XXX
Re:Technical Assistance Advisement 07A-037
Sales & Use Tax –XXXXXX Modules
Sections:212.02(16) and 212.05, Florida Statutes (F.S.)
Petitioner: XXX(herein Taxpayer)
DearXXX:
This letter is a response to your petition datedAugust31, 2007, for the Department's issuance of a Technical Assistance Advisement ("TAA") concerning the above referenced party and matter. Yourpetition 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.
FACTS
The Taxpayer is one of the nation’s largest providers of educational services. Since XXX, the Taxpayer has provided professionally written XXXXXX Modules that enable its customers to study college courses in their own home, at their own pace. Using the Taxpayer’s XXXXXX Modules, customers can complete general education and elective courses without attending any classes. The XXXXXX Modules require no additional textbooks.[1]
The Taxpayer executes a “Purchase Agreement” with its customers, on which the customer identifies, from a listing of XXXXXX Modules (CLMs), the specific modules desired. The agreement contains the following, “The purchase price for my program of ______
CLMs (including XXX®if checked above) and associated educational services is $______
as shown on the Program Pricing Summary Worksheet,which is incorporated herein by reference as AttachmentI.” This purchase price is the lump sum amount of the number of modules ordered times the Taxpayer’s price for each module. The Taxpayer’s learning materials (modules) are printed in XXX and are shipped, in 3-ring binders, by the Taxpayer to its Florida customers by common carrier.
REQUESTED ADVISEMENT
The Taxpayer asserts that an industry association advised it that it was providing a non-taxable education service, and therefore, it is not required to collect or remit sales or use tax. The Taxpayer further states that it has been more recently advised that it may be required to collect and remit sales tax on some portion of its fee. Therefore, the Taxpayer has requested assistance to determine its sales tax responsibilities in Florida, if any.
APPLICABLE LAW
Section 212.05, F.S., provides that sales tax is due at the rate of 6 % of the sales price of each item of tangible personal property when sold at retail in this state. Section 212.02(16), F.S., provides, in pertinent part:
"Sales price" means the total amount paid for tangible personal property, including any services that are a part of the sale . . . .
Section 212.02(19), F.S., provides, in part:
"Tangible personal property" means and includes personal property which may be seen, weighed, measured, or touched or is in any manner perceptible to the senses . . . .
Section 212.21(2), F.S., provides that it is the specific legislative intent to tax each and every sale of tangible personal property, unless the sale is specifically exempted from tax.
RESPONSE
The Taxpayer asserts that it is providing a nontaxable service pursuant to Section 212.08(7)(v), F.S., citing several Technical Assistance Advisements (TAA) in support of its conclusion. Section 213.22(1), F.S., authorizing the Department to issue TAAs, states: “Technical assistance advisements shall have no precedential value except to the taxpayer who requests the advisement and then only for the specific transaction addressed in the technical assistance advisement. . . .” Thus, the TAAs cited are not dispositive to the issue presented in this specific request for advisement.
The Taxpayer is neither an accredited school or college nor part of any college or university. The Taxpayer specializes in the research, development, and distribution of reference materials and learning materials that will help its customers prepare for standardized end-of-course college equivalency examinations that are accepted for credit by various colleges and universities. The materials produced and distributed by the Taxpayer to its customers are not individualized and specifically created for and provided exclusively to a single customer. Rather, the Taxpayer’s CLMs are produced for and directed towards its customer obtaining the general information needed to pass equivalency examinations for the selected subjects with the given curriculums covered by the Taxpayer, thereby allowing its customer to receive college credits without the necessity to take the required college course.
CONCLUSION
The Taxpayer is not providing an exempt professional service transaction that involves sales as inconsequential elements for which no separate charges are made. The Taxpayer is selling tangible personal property, in the form of individually priced CLMs, with the specific services provided to its customers as a part of the sales price. Accordingly, the entire charge made to its customers for the purchase price of the CLMs identified and ordered by its Florida customers is subject to sales tax.
This response constitutes a Technical Assistance Advisement under Section 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 Section 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 Section 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort to 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 10 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) 922-4727.
Sincerely,
Horace Royals
Senior Tax Specialist
Technical Assistance & Dispute Resolution
HR\
Record ID:XXX
[1] This information was obtained fromthe Taxpayer’s web site.