Tangible personal property imported, produced, or manufactured in this state for export are not subject to Florida sales tax when the importer, producer, or manufacturer delivers the property to a licensed exporter for export outside of Florida. In response to this, one crafty freight forwarder negotiated a “memorandum of understanding” with the Department of Revenue several years ago to establish a 0% sales and use tax rate for a unique zip code. Items shipped to this zip code within Florida would not be subject to sales tax, which simplified the process for freight forwarders, who subsequently exported the items out of state.
Interest in this policy grew, and now Florida is home to a number of unique zip codes with 0% sales tax rates. These freight forwarders offer customers an address within their unique zip codes where they can ship merchandise tax free. Such zip codes are especially popular in south Florida, from where items are shipped to central and south America.
These zip codes can be verified via a link at the end of this article. Furthermore, each of these freight forwarders is in possession of a letter from the Florida Department of Revenue available for distribution to customers. These letters should specifically state that vendors selling tangible personal property shipped to the unique zip code should apply no Florida sales or use tax to those sales.
This policy of establishing unique, tax free zip codes is, interestingly, nowhere in the Florida statutes or Florida administrative code. Questions regarding the Department’s authority to establish such a policy remain unanswered. Furthermore, the procedures for qualifying for this program are unclear. For example, what standards must a freight forwarder meet to obtain a unique, tax free zip code? What is to stop a person within Florida from obtaining an address within these unique zip codes and simply picking up their tax-free goods from the freight forwarder?
One thing is for certain: freight forwarders have a unique opportunity in Florida to save their customers sales and use tax. With no established rule in place, the Department could change this policy at any time. Freight forwarders should act now to take advantage of the opportunity before they do.
Jeanette Moffa is an attorney who concentrates on state and local taxes at Moffa, Sutton, & Donnini, P.A. She is also an adjunct professor and assistant editor to the American Bar Association’s The Sales and Use Tax Deskbook. You can read more about Jeanette in her firm bio.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against Florida sales and use taxes for more than 25 years with over 100 years of cumulative experience working for our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire State of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
Authority
Rule 12A-1.0015, F.A.C., Sales for Export; Sales to Nonresident Dealers and Foreign Diplomats
LINK TO CONFIRM ZIP CODES HERE
Additional Resources
FL TAX - VOLUNTARY DISCLOSURE CAN BE THE PERFECT SOLUTION, published Oct 5, 2012, by Jerry Donnini, Esq.
Florida Sales Tax Audit: What to Really Expect - Part 1, published October 11, 2016, by Steve Middel.
Florida Sales Tax Audit - What to Really Expect - Part 2, published October 26, 2016, by Steve Middel.
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