Rule 12A-1.038, F.A.C., provides, in part, guidance as to how a dealer may document a sale made to a nongovernmental tax-exempt entity. Rule 12A-1.039, F.A.C., provides similar guidance for sales made to registered dealers for the purposes of ...

 

DEPARTMENT OF REVENUE

Sales and Use Tax

RULE NOS.:RULE TITLES:

12A-1.038Consumer’s Certificate of Exemption; Exemption Certificates

12A-1.039Sales for Resale

PURPOSE AND EFFECT: Rule 12A-1.038, F.A.C., provides, in part, guidance as to how a dealer may document a sale made to a nongovernmental tax-exempt entity. Rule 12A-1.039, F.A.C., provides similar guidance for sales made to registered dealers for the purposes of resale. In an effort to assist taxpayers using modern technology, the Department has developed a mobile application that can be used to confirm a customer’s status as a tax-exempt entity or a registered dealer. The purpose of a portion of the proposed changes to the two rules is to include information regarding the availability and use of this new method.

To make it easier for taxpayers using modern technology to receive a copy of their Annual Resale Certificate and to reduce costs to the state, the Department will provide those certificates through a secure link on its website beginning in January, 2015. A change is being proposed to Rule 12A-1.039, F.A.C., to provide information as to this availability.

The Department has determined that three provisions of Rule 12A-1.039, F.A.C., are unnecessary and provide no benefit to either the taxpayer or the Department. Those provisions are 1) including a taxpayer’s registration effective date on the Annual Resale Certificate issued by the Department, as the certificates are issued each year and are clearly labeled with each year’s date; 2) the requirement that a taxpayer sign his or her Annual Resale Certificate; and 3) the requirement of a signed statement by the purchaser on a sales invoice, purchase order, or separate form documenting the sale. Accordingly, the Department is proposing that these provisions be stricken from the rule.

Finally, technical changes are made to both rules for Departmental addresses and to the time period during which Department operators are available.

SUMMARY: The proposed changes to Rules 12A-1.038, F.A.C. (Consumer’s Certificate of Exemption; Exemption Certificates), provide information regarding the availability and use of the Department’s new mobile application. The proposed changes to Rule 12A-1.039, F.A.C. (Sales for Resale), also provide information regarding the availability and use of the Department’s new mobile application; provide information as to the availability of a taxpayer’s resale certificate through a secure link on the Department’s website; and remove obsolete provisions.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under Section 120.541(1), F.S.; and 2) based on past experiences regarding the procedures for processing written protests of assessments and rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 212.07(1)(b), 212.17(6), 212.18(2), 213.06(1) FS.

LAW IMPLEMENTED: 95.091(3), 212.02(4)(14), 212.05(1)(b), (i), (j), 212.06(1)(c), (16), 212.0601, 212.07(1), 212.08(5)(m), (6), (7), 212.085, 212.13(5)(c), (d), 212.17(6), 212.18(2), (3), 218.186, 212.21(2), 213.053(10), 218.186

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: December 10, 2014, 1:00 p.m.

PLACE: 2450 Shumard Oak Boulevard, Building One, Room 2503, Tallahassee, Florida

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tonya Fulford at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Tammy Miller, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone: [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

12A-1.038 Consumer’s Certificate of Exemption; Exemption Certificates.

(1) through (2) No change.

(3) SALES MADE TO EXEMPT ENTITIES OTHER THAN GOVERNMENTAL UNITS

(a) through (e) No change.

(f) The validity of a Florida Consumer’s Certificate of Exemption may be verified by using the Department’s on-line Certificate Verification System at http://www.myflorida.com/dor/gta.html, by using the Department’s FL Tax mobile application, or by calling the Department’s automated nationwide toll-free verification system at 1(877)357-3725. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).

(g)1. TRANSACTION AUTHORIZATION NUMBER ISSUED PRIOR TO OR AT THE POINT-OF-SALE – VALID FOR A SINGLE TRANSACTION ONLY. In lieu of obtaining a copy of the exempt entity’s valid Consumer’s Certificate of Exemption for each sale, the selling dealer may obtain a Transaction Authorization Number or a Vendor Authorization Number from the Department when making a tax-exempt sale to the exempt entity or its authorized representative.

2. The selling dealer may obtain a transaction authorization number prior to or at the point-of-sale by using the Department’s on-line Certificate Verification System at http://www.myflorida.com/dor/gta.html, by using the Department’s FL Tax mobile application, or by calling the Department’s automated nationwide toll-free verification system at 1(877)357-3725. When using the Department’s on-line Certificate Verification System, the dealer may key up to five Florida Consumer’s Certificate of Exemption numbers into the system. When using the Department’s FL Tax mobile application or the Department’s automated nationwide toll-free verification system, the selling dealer is prompted to key in a single Florida Consumer’s Certificate of Exemption number. Each Either verification system will issue a 13-digit transaction authorization number or alert the selling dealer that the purchaser does not have a valid Florida Consumer’s Certificate of Exemption. Selling dealers using the automated telephone verification system who do not have a touch-tone telephone will be connected to a live operator during the hours of 8:00 a.m. to 57:00 p.m. (Eastern Time), Monday through Friday. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).

3. The selling dealer must document the transaction authorization number on the sales invoice, purchase order, or other document that is prepared by the purchaser or the selling dealer to document the tax exempt purchase by the exempt entity.

4. A transaction authorization number is valid for a single sales transaction and is not valid to properly document subsequent sales made to the same entity. The selling dealer must obtain a new vendor authorization number for subsequent tax exempt transactions.

(h)1. VENDOR AUTHORIZATION NUMBER FOR REGULAR CUSTOMERS – VALID FOR CALENDAR YEAR ISSUE. In lieu of obtaining a copy of the exempt entity’s valid Florida Consumer’s Certificate of Exemption or a Transaction Authorization Number from the Department for each sale to the entity, the selling dealer may obtain a Vendor Authorization Number for that entity. This option is available to selling dealers throughout the calendar year without limitation. The selling dealer must maintain a copy of the exempt entity’s Florida Consumer’s Certificate of Exemption in its books and records.

2. The “vendor authorization number” is a customer-specific authorization number that will be valid for all sales made to an exempt entity during the calendar year.

3. To obtain vendor authorization numbers, the selling dealer may use the Department’s on-line Certificate Verification System at http://www.myflorida.com/dor/gta.html or send a written request to the Department. Dealers obtaining authorization numbers by submitting a written request to the Department may obtain the electronic format for sending the customer data from the Department’s web site at www.myflorida.com/dor or call the Department at [phone] to obtain the electronic format.

a. The written request should be forwarded to the Florida Department of Revenue, Account Management MS 1-5730, Florida Department of Revenue, 5050 W Tennessee Street Production Management, 5040 West Tharpe Street, Suite 202, Tallahassee, Florida 32399-0160 32303-7836, along with an electronic file containing a list of the dealer’s regular customers for which the dealer has a Florida Consumer’s Certificate of Exemption number on file. In response to the request, the Department will issue to the selling dealer, using the same electronic medium, a list containing a unique vendor authorization number for each exempt entity who is a holder of a valid Florida Consumer’s Certificate of Exemption.

b. The Department’s on-line Certificate Verification System allows the user to verify up to five Florida Consumer’s Certificate numbers and to obtain a transaction authorization number for single sales made to each exempt entity at once. The system also allows the user to upload a batch file of up to 50,000 accounts for verification of a Florida Consumer’s Certificate of Exemption and, 24 hours later, retrieve the file containing the vendor authorization numbers for all sales made to an exempt entity during the calendar year.

4. The selling dealer may make tax-exempt sales to the exempt entity during the period in which the vendor authorization number for that entity is valid. Vendor authorization numbers are valid for the remainder of the calendar year during which they are issued. However, vendor authorization numbers issued by the Department in November or December are valid for the remainder of that calendar year and the next calendar year.

(4) through (6) No change.

Rulemaking Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 95.091(3), 212.02(4), (14)(c), 212.05(1)(j), 212.06(1)(c), (16), 212.0601, 212.07(1), 212.08(5)(m), (6), (7), 212.085, 212.18(2), (3), 212.21(2) FS. History–Revised 10-7-68, Amended 6-16-72, 9-28-78, 7-20-82, 4-29-85, Formerly 12A-1.38, Amended 8-10-92, 3-17-93, 9-14-93, 12-13-94, 10-2-01, 6-12-03, 7-31-03, 6-28-04, 11-6-07, 9-1-09, 5-9-13,________.

 

12A-1.039 Sales for Resale.

(1) No change.

(2) ANNUAL RESALE CERTIFICATES ISSUED BY THE DEPARTMENT.

(a) For each calendar year, the Department of Revenue will issue to each active registered dealer an Annual Resale Certificate (Form DR-13). A newly registered dealer will receive a Sales and Use Tax Certificate of Registration (Form DR-11) and an Annual Resale Certificate. The business name and location address, the registration effective date, and the certificate number will be indicated on the Annual Resale Certificate.

(b) Dealers may obtain a copy of who lose their Annual Resale Certificate through a secure link on the Department’s website at www.myflorida.com or may request a replacement by contacting the Department at [phone]. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY). Written requests should be addressed to Account Management, MS1-5730 Central Registration, Florida Department of Revenue, 5050 West Tennessee Street, Tallahassee, Florida 32399-0160 0100.

(3) Except as provided in subsection (4), a dealer making a sale for resale is required to document the exempt sale by CHOOSING ONE of the following three methods:

(a) COPIES OF ANNUAL RESALE CERTIFICATES OBTAINED BY THE SELLING DEALER. The selling dealer who makes a tax exempt sale for the purposes of resale must obtain a copy of the purchaser’s current Annual Resale Certificate, or a Transaction Resale Authorization Number or Vendor Resale Authorization Number issued by the Department.

1. The copy of the Annual Resale Certificate must be signed by the purchaser or the purchaser’s authorized representative.

1.2. A selling dealer may make sales for resale to a purchaser whose current Annual Resale Certificate is on file without seeking a new Annual Resale Certificate for each subsequent transaction during that calendar year. A new Annual Resale Certificate must be obtained each calendar year. Except for sales made to purchasers who purchase on account from the dealer on a continual basis, a selling dealer may only make exempt sales for resale to purchasers during the calendar year for which the purchaser’s Annual Resale Certificate appears valid on its face.

2.3. For sales made to purchasers who purchase on account from a dealer on a continual basis, the selling dealer may rely upon the Annual Resale Certificate beyond the expiration date of the certificate and is not required to obtain a new Annual Resale Certificate each calendar year. For purposes of this paragraph, the phrase “purchase on account from a dealer on a continual basis” means that the selling dealer has a continuing business relationship with a purchaser and makes recurring sales on account to that purchaser in the normal course of business. For purposes of this paragraph, a sale “on account” refers to a sale where the dealer extends credit to the purchaser and records the debt as an account receivable, or where the dealer sells to a purchaser who has an established cash or C.O.D. account, similar to an “open credit account.” For purposes of this paragraph, purchases are made from a selling dealer on a “continual basis” if the selling dealer makes sales to the purchaser no less frequently than once in every twelve month period in the normal course of business.

(b) TRANSACTION RESALE AUTHORIZATION NUMBER ISSUED PRIOR TO OR AT THE POINT-OF-SALE – VALID FOR SINGLE TRANSACTION ONLY. In lieu of obtaining a copy of the purchaser’s Annual Resale Certificate for each tax-exempt sale made for the purposes of resale, the selling dealer may obtain a Transaction Resale Authorization Number or a Vendor Resale Authorization Number from the Department.

1. A “transaction resale authorization number” must be obtained by the selling dealer prior to or at the point-of-sale:

a. By by using the Department’s on-line Certificate Verification System at http://www.myflorida.com/dor/gta.html;

b. By using the Department’s FL Tax mobile application; or

c. By by calling the Department’s automated nationwide toll-free telephone verification system at 1(877)357-3725.

2. When using the Department’s on-line Certificate Verification System, the dealer may key up to five (5) purchaser’s sales tax certificate of registration numbers into the system. When using the Department’s FL Tax mobile application or the Department’s automated nationwide toll-free verification system, the selling dealer is prompted to key in a single purchaser’s sales tax certificate of registration number. Each The system will either issue a 13-digit transaction resale authorization number or alert the selling dealer that the purchaser does not have a valid resale certificate. Selling dealers using the automated telephone verification system who do not have a touch-tone phone will be connected to a live operator during the hours of 8:00 a.m. to 5:00 p.m. (Eastern Time), Monday through Friday. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).

3. A transaction resale authorization number is not valid to exempt subsequent resale purchases or rentals made by the same purchaser. A selling dealer must obtain a new transaction resale authorization number for each and every resale transaction.

4. The selling dealer must document the transaction resale authorization number on the sales invoice, purchase order, or a separate form that is prepared by either the purchaser or the selling dealer. The sales invoice, purchase order, or separate form must contain the following statement: “The purchaser hereby certifies that the property or services being purchased or rented are for resale.” This statement must be followed by the signature of the purchaser. The signature may be obtained by the selling dealer through use of an electronic signature pad or other electronic method.

5. Alternatively, in lieu of meeting the requirements of subparagraph 4., the transaction resale authorization number may be documented on a properly completed Uniform Sales and Use Tax Certificate-Multijurisdiction, as provided in subsection (8) of this rule.

(c) through (8) No change.

Rulemaking Authority 212.07(1)(b), 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 95.091(3), 212.02(14), 212.05(1)(b), (i), 212.07(1), 212.085, 212.13(5)(c), (d), 212.17(6), 212.18(2), (3), 218.186, 212.21(2), 213.053(10), 218.186 FS. History–Revised 10-7-68, Amended 1-7-70, 6-16-72, 9-26-77, 7-20-82, 4-12-84, Formerly 12A-1.39, Amended 1-2-89, 9-14-93, 12-13-94, 10-2-01, 6-12-03, 11-6-07, 9-1-09, 5-9-13, _________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Tammy Miller, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone: [phone]

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor and Cabinet

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: November 12, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: October 15, 2014