Current through Reg. 51, No. 058, March 25, 2025
(1) "Transportation
charges" include carrying, delivery, freight, handling, pickup, shipping, and
other similar charges or fees.
(2)
Transportation charges which are not separately stated on an invoice or bill of
sale, but are included in the sales price of taxable tangible personal
property, are subject to tax.
(3)
(a) Where the seller agrees to deliver
tangible personal property to some designated place and the purchaser cannot
elect to avoid the charge for transportation services, the charge for the
transportation service is subject to tax, even if separately stated on an
invoice or bill of sale.
(b)
1. Example: X is in the business of selling
liquefied petroleum (L.P.) gas, gas tanks, and other related equipment. Y
agrees to purchase a 500 gallon above ground tank from X to be placed at Y's
place of business and to make future purchases of L.P. gas from X. X requires a
delivery fee of $25 for each L.P. gas tank that it sells and will not allow the
customer to pick up the tank nor make arrangements with any other
transportation company to deliver the tank to the designated place. Since the
$25 delivery fee is required by the seller and is not an option to the buyer,
the invoice correctly includes the $25 delivery charge in the amount subject to
tax as follows:
500 Gallon L.P. Gas Tank $500.00
Delivery Fee $25.00
Total Taxable Amount $525.00
2. Example: X places an order to purchase a
jacket for $100 with a mail order company. The mail order company's policy is
that all items are shipped F.O.B. destination through the U.S. mail or by
common carrier as the method of shipping its merchandise to its customers. The
mail order company makes a separate charge to all of its customers for
transportation based on the weight of the item sold and the distance required
to deliver the item to the desired place. Since the method of shipping is
mandated by the mail order company, the transportation charge becomes a part of
the sales price. The invoice correctly includes the transportation charge in
the amount subject to tax as follows:
Jacket #5054 $100.00
Shipping and Handling Charges $8.75
Total Taxable Amount
$108.75
(4)
(a) The
charge for transportation services is not subject to tax when both of the
following conditions have been met:
1. The
charge is separately stated on an invoice or bill of sale; and,
2. The charge can be avoided by a decision or
action solely on the part of the purchaser. (See subsection (5) for shipping of
tangible personal property F.O.B. origin.)
(b)
1.
Example: B is in the business of renting furniture and appliances. B rents a
refrigerator to Customer C. B's policy is to allow customers to elect whether
to pick up the rental property at B's place of business or to agree to a $25
delivery fee which B separately states on the customer's invoice. Since the
separately stated $25 delivery fee could be avoided by a decision or action on
the part of C, the $25 delivery fee is not subject to tax.
2. Example: D is in the business of selling
appliance repair parts. E desires to purchase a hot water heater element from
D. D must order the hot water heater element for E from a wholesaler. D
requires E to pay the transportation charges only if E elects to have the item
shipped directly from the wholesaler to E's residence. E requests that D
instruct the wholesaler to ship the hot water heater element directly to E's
residence. Since the transportation charge is incurred at the election of E and
could have been avoided by E, the invoice correctly excludes the transportation
charge from the amount subject to tax as follows:
Water Heater Element $25.00
Total Taxable Amount $25.00
Shipping and Handling Charges $3.25
3. Example: X places an order for a piece of
equipment for $300 with a mail order company. The mail order company allows X
to choose a method of shipping or will allow X to pick up the piece of
equipment at the mail order company's place of business. Since X can make an
election to avoid the charge for transportation services, the invoice correctly
excludes the transportation charges as follows:
Equipment $300.00
Total Taxable Amount $300.00
Shipping and Handling Charges
$8.75
(5) If the seller contracts to sell tangible
personal property F.O.B. origin, the title to the property passes at the point
of origin. Since the title to the property passes at the point of origin,
transportation services arranged by the seller and rendered to the buyer are
not a part of the taxable selling price, provided the transportation charges
are separately stated. Where the transportation charges are billed by the
seller to the buyer, but documentation is inadequate to establish the point at
which title passes to the buyer, it is presumed that the tangible personal
property was sold F.O.B. origin and the title to the property passes at the
point of origin. In such instances, the transportation charges are not
considered a part of the selling price of the property, if separately stated.
(a) Example: Company B is in the business of
selling large industrial type generators. Company B is located out-of-state.
Due to the size and cost of the generators and the cost of delivery of the
generators, Company B only sells the generators F.O.B. origin. Company C
purchases a generator for $1 million for its own use and requests that the
generator be shipped to Company C's location in Florida. Since the title to the
equipment passes to Company C at Company B's location, no tax is due on any
separately stated transportation charge.
(b) Example: Company X is in the business of
selling widgets at retail. Company X's customers may order the widgets to be
shipped F.O.B. origin or F.O.B. destination. Customer Z places his order for a
dozen widgets of various sizes to be shipped F.O.B. destination to his business
location in Florida. Since Customer Z could have requested the widgets to be
shipped F.O.B. origin or destination, the separately stated transportation
charge is not considered a part of the sales price of the widgets and is not
subject to tax.
(6) When
the purchaser of taxable tangible personal property contracts with a third
party carrier at the purchaser's option and pays transportation charges thereon
directly to the third party carrier, such transportation charges are not
subject to tax.
Rulemaking Authority
212.18(2),
213.06(1) FS.
Law Implemented 212.02(4), (15), (16),
(19),
212.06(1),
672.319,
672.401
FS.
New 10-7-68, Amended 6-16-72, 7-3-79, Formerly 12A-1.45,
Amended 10-17-94.
