Sales and Use Tax TAA 17A-007 Credit Reporting Services
Question: Are taxpayer’s charges to its customers for credit reporting services subject to Floridasales and use tax?
Answer: Taxpayer’s separately stated monthly charges, to its customers, for credit reporting services are not subject to tax under the provisions of s. 212.05(1)(I)1., f.S., and rule 12A-1.0092(2)(C)1., f.A.C.
Taxpayer’s separately stated monthly charges, to its customers, for credit reporting services, which are provided electronically to customers, are not subject to sales tax under the provisions of rule 12A-1.062(5), f.A.C.
March 3, 2017
Re: Technical Assistance Advisement 17A-007
XXXX (“Taxpayer”)
Florida Sales and Use Tax
Credit Reporting Services
Sections 212.02(19), 212.05, 212.055, Florida Statute (F.S.)
Rules 12A-1.0092(2)(c)1., 12A-1.062(5), Florida Administrative Code (F.A.C.)
BP#: XXXX
Dear XXXX:
This letter is in response to your request dated XXXX, and received in this office on XXXXX, for issuance of a Technical Assistance Advisement (“TAA”) pursuant to Section 213.22, F.S., and Rule Chapter 12-11, F.A.C., concerning the taxability of credit reporting services. An examination of your request has established you complied with the statutory and regulatory requirements for issuance of a TAA. Therefore, the Department is hereby granting your request for a TAA.
FACTS PRESENTED
Taxpayer is registered as a Florida sales and use tax dealer. It provides integrated information technology and digital marketing/advertising solutions to the automotive retail industry. Among the services Taxpayer provides to its customers are credit reporting services. These services are provided electronically. Taxpayer currently collects and remits sales tax on its customers’ purchases of credit reporting services. Generally, a credit reporting service transaction follows the below workflow:
- Taxpayer’s customer requests a credit check for a potential buyer seeking financing for a vehicle purchase via Taxpayer’s online portal.
- Each request submitted by a Taxpayer customer is submitted to one of the three largest credit reporting agencies for review and finalization.
- The credit report findings are transmitted to Taxpayer’s customer electronically via Taxpayer’s online portal.
- Taxpayer documents all requests and invoices its customers on a regular basis (generally monthly). The credit reporting services are separately stated on each invoice. Each invoice may state a variety of other products/services in addition to the credit reporting services, all of which are separately stated.
- Taxpayer charges and collects Florida sales tax on its invoices for credit reporting services. This tax is remitted on its monthly Florida sales and use tax returns.
Additionally, it should be noted that Taxpayer is currently under a sales tax compliance audit, by the Department, for the period of November 1, 2013, through October 31, 2016.
REQUESTED ADVISEMENT
Are Taxpayer’s charges to its customers for credit reporting services subject to Florida sales and use tax?
APPLICABLE LAW
Unless a specific exemption applies, s. 212.05, F.S., provides it is the legislative intent that every person is exercising a taxable privilege that engages in the business of selling or repairing tangible personal property1 in this state. For exercising such a privilege, a tax is levied on each taxable transaction or incident. The tax is due and payable at the rate of 6 percent, plus any applicable surtaxes imposed under s. 212.055, F.S., on the total consideration received for each item or article of tangible personal property when sold at retail or repaired in this state. Exemptions from tax are strictly construed against the claimant. Wanda Marine Corp. v. Dep’t of Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA 1975).
Detective, Burglar Protection, and Other Protection Services
Section 212.05(1)(i)1., F.S., provides that detective, burglar protection, and other protection services classified under NAICS2 National Numbers 561611, 561612, 561613, and 561621, are subject to sales tax. However, Rule 12A-1.0092(2)(c)1., F.A.C., explicitly provides that credit reporting services, when performed by detectives, private investigators, or others are not subject to tax when freestanding, or when separately stated on an invoice given to a purchaser which includes taxable services.
As specified and referenced above, Taxpayer’s separately stated monthly charges, to its customers, for credit reporting services are not subject to tax under the provisions of s. 212.05(1)(i)1., F.S., and Rule 12A-1.0092(2)(c)1., F.A.C.
Information Services
Rule 12A-1.062(5), F.A.C., specifically provides that the charge for furnishing information by way of electronic images which appear on the subscriber’s video display screen does not constitute a sale of tangible personal property nor does it constitute the sale of a taxable information service.
As specified and referenced above, Taxpayer’s separately stated monthly charges, to its customers, for credit reporting services, which are provided electronically to customers, are not subject to sales tax under the provisions of Rule 12A-1.062(5), F.A.C.
For more information concerning all of the taxes administered by the Department of Revenue, please refer to the Department’s Internet site at:
www.floridarevenue.com
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 and 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 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 15 days of the date of this letter.
Kind Regards,
Alan R. Fulton
Tax Law Specialist
Technical Assistance & Dispute Resolution
850-717-6735
ARF\tadrstaff
Record ID: 212394
End Notes:
- 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. See s. 212.02(19), F.S.
- "NAICS" means those classifications contained in the North American Industry Classification System, as published in 2007 by the Office of Management and Budget, Executive Office of the President.
