Florida Department of Revenue Tax Information Publication. TIP 97A01-25 DATE ISSUED: Dec 12, 1997

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1 Florida Department of Revenue Tax Information Publication TIP 97A01-25 DATE ISSUED: Dec 12, 1997 New Method for Motor Vehicle Dealers to Report Tax Collected on Out-of-State Sales Florida law allows qualified purchasers who live out-of-state a partial tax exemption on motor vehicles that are purchased in Florida. A nonresident will pay tax on a motor vehicle purchased in Florida from a registered dealer at a rate equal to the sales tax rate that would be imposed on such a sale if it occurred in his or her state if that rate is 6 percent or less. Since the sale is made in Florida, a trade-in will reduce the taxable sales price, unless the purchaser's state of residence does not recognize trade-ins. Frequently, motor vehicle dealers make sales to such out-ofstate purchasers. This creates a problem for motor vehicle dealers to correctly report the sales that were taxed at a rate lower than 6 percent on the Sales and Use Tax Return (Form DR-15 or Form DR-15EZ). Dealers should not list the partial exemptions from sales to out-of-state purchasers as credits on Line 6 of Form DR-15 or Line 5 of Form DR-15EZ. All motor vehicle dealers registered in Florida should use the following method for reporting out-of-state sales of motor vehicles on their Sales and Use Tax Return. Reporting Tax on Out-of-State Sales For reporting purposes on Form DR-15 or Form DR-15EZ, calculate the amount of taxable sales and exempt sales by using the following instructions: 1. Determine the tax rate of the purchaser's state of residence, in which the vehicle will be registered.

2 2. Multiply the sales price (purchase price less any trade-in credit, if applicable) by the tax rate in the other state, shown as a decimal, and divide by six percent (.06), shown as a decimal. The result of this calculation is the reported taxable amount that is included on line A, column 3 (Taxable Amount), of Form DR-15 or on line 3 of Form DR- 15EZ. 3. To determine the exempt sales to be reported, subtract the taxable amount computed in #2 above from the sales price. This amount is reported on line A, column 2 (Exempt Sales), of Form DR-15 or on line 2 of Form DR-15EZ. 4. To determine the amount of tax to be reported, multiply the taxable amount computed in #2 above by.06 (Florida's rate). This is the same amount as the actual tax collected on the transaction. EXAMPLES: Here are examples of how sales transactions of a motor vehicle purchased in Florida that will be registered in another state will be reported on Form DR-15 or DR-15EZ. Example A. A motor vehicle that will be registered in Alabama is purchased for $14, (Alabama rate is two percent.) 1. $14, (sales price) times.02 (Alabama's rate) divided by.06 equals $4, This is the reported taxable amount for this transaction. 2. $14, less $4, equals $9, This is the amount of exempt sales to be reported for this transaction. 3. $4, (taxable portion) times.06 (Florida's rate) equals $ OR $14, (sales price) times.02 (Alabama's rate) equals $ tax collected. Example B. An out-of-state resident purchases a motor vehicle for $23, that will be registered in Georgia. The purchaser trades in a motor vehicle and receives a $5, credit to be applied to

3 the sales price of the new motor vehicle. (Georgia rate is four percent.) 1. $18, ($23, [purchase price] less $5, [trade-in]) times.04 (Georgia's rate) divided by.06 (Florida's rate) equals $12, This is the reported taxable sales amount for this transaction. 2. $18, less $12, equals $6, This is the reported exempt sales for this transaction. 3. $12, (taxable portion) times.06 (Florida's rate) equals $ OR $18, times.04 (Georgia's rate) equals $ tax collected. Transactions for South Carolina Residents - South Carolina has a sales tax limit of $ The tax rate for South Carolina is five percent. If the sales price exceeds $6,000.00, the portion over $5, becomes the reported exempt sales and the $5, becomes the reported taxable amount. Example A. $12, (sales price) less $5, (taxable amount) equals $7, (exempt sales). Tax due is $ Example B. If the sales price is less than $6,000.00, you will use the method explained above: 1. $4, (sales price) times.05 (South Carolina's rate) divided by.06 equals $3, This is the reported taxable amount for this transaction. 2. $4, less $3, equals $ This is the reported exempt sales for this transaction. 3. $3, (taxable amount) times.06 (Florida's rate) equals $ OR $4, times.05 equals $ (tax collected). The following is the way these transactions will appear on Form DR-15 or DR-15EZ.

4 Gross Exempt Taxable Tax Sales Sales Amount Collected Alabama Sales $14, $9, $4, $ Georgia Sales $18, $6, $12, $ South Carolina Sales $16, $7, $8, $ Totals $49, $23, $25, $1, Note: Because these vehicles will be registered in another state, they are not subject to discretionary sales surtaxes. The "Taxable Amount" for these transactions that is included on line A, column 3, of Form DR-15 must also be included on the back of this return on line 15(b); or that amount included on line 3 of Form DR-15EZ must also be included on line A of this return. The completion of the discretionary block on the back of Form DR-15 is very important to your county. Out-of-State Purchasers Residing in States with a Sales Tax Rate Above 6 Percent When the sales tax rate in his or her state is greater than 6 percent, a nonresident will pay tax on a motor vehicle purchased in Florida from a registered dealer at the 6 percent Florida rate. These sales should also be reported on line 15(b) on the back of Form DR-15 or on line A of Form DR-15EZ. Make sure you have the Affidavit for Partial Exemption of Motor Vehicle Sold (Form DR-123) signed by the customer for all outof-state sales transactions. Certain other states do not recognize or grant a credit for sales tax paid in Florida; however, this does not alter the tax requirements imposed by this state. It is recommended that you advise your customer that the state in which a vehicle is to be titled may not accept the sales tax paid in Florida. For the most current rates, please refer to the Tax Information Publication (TIP) titled Motor Vehicle Sales Tax Rates by State as of October 1, 1997 and Tax Credit Application (TIP #97(A)-21). This TIP is available through the Department's Tax Law Library. You can get a copy by visiting your local service center or by calling Tax Information

5 Services at the number listed below. FOR MORE INFORMATION This document is intended to alert you to the requirements contained in Florida laws and administrative rules. It does not by its own effect create rights or require compliance. For more information call Tax Information Services, Monday - Friday, 8:00 a.m. to 5:00 p.m., ET, at Hearing or speech impaired persons should call our TDD at or For a detailed written response to your questions, write: FLORIDA DEPARTMENT OF REVENUE PO BOX 7443 TALLAHASSEE FL Get tax forms quickly by FAX ON DEMAND. Call , twenty-four hours a day, seven days a week using your fax machine handset and follow the instructions. Statute and Rule References: Section (10), F.S. Rule 12A-1.007(8)(a), F.A.C.

Florida Department of Revenue Tax Information Publication. TIP 01BER-04 Date Issued: Oct 03, 2001 EXEMPTIONS FROM THE COMMUNICATIONS SERVICES TAX

Florida Department of Revenue Tax Information Publication TIP 01BER-04 Date Issued: Oct 03, 2001 EXEMPTIONS FROM THE COMMUNICATIONS SERVICES TAX Beginning October 1, 2001, communications services, such