2011FloridaSalesTaxHolidayQuestions&Answers

GeneralQuestions
1. Howisthisyearssalestaxholidaydifferentfromlastyearsholiday? TheAugust2011taxholidaydiffersfromlastyearsholidayaslistedbelow: August1214,2011Holiday LastYearsAugust2010Holiday Notaxisdueoncertainclothing,footwear, Notaxwasdueoncertainclothing,footwear, andaccessoriessellingfor$75orless. andaccessoriessellingfor$50orless. Notaxisdueoncertainschoolsupplies Notaxwasdueoncertainschoolsupplies sellingfor$15orless. sellingfor$10orless. BooksareNOTtaxexempt. Notaxwasdueoncertainbookssoldfor$50 orless. 2. WherecanIgetcompleteinformationaboutthisyearssalestaxholiday?TaxInformation Publication(TIP11A0103)describesthetaxholidaydates,includesdefinitionsofclothingand schoolsuppliesandalsolistsexamplesoftaxableandexemptclothing,footwear,accessories, andschoolsupplies.ThisTIP,mailedtoallregisteredsalestaxdealersinJune,isalsopostedon theDepartmentswebsite:www.myflorida.com/dor.Ifyouwanttoreadthelawthat authorizedthisholiday,youcanfindChapter201176,LawsofFlorida,at: http://laws.flrules.org/2011/76. 3. Whyisn't_______(anyitemnotlisted)includedinthetaxholidayforschoolsupplies? Onlyspecificitemswereidentifiedasexemptschoolsuppliesinthelawpassedbythe2011 FloridaLegislatureandapprovedbytheGovernor.Nootheritemsareauthorized.Thelabelingor packagingoftheitemusuallydetermineswhethertheitemmaybepurchasedtaxexemptduring thethreedaytaxholiday.Forexample,notebookfillerpaperisexemptbutpaperlabeledas computerpaperistaxable. 4. Aredealersresponsibleforcorrectlychargingsalestaxduringthetaxholiday?Howwill businessownersknowwhatitemsareexemptfromsalestax? TheDepartmentmailedaListofTaxableandTaxexemptItems(inthelaw)toallregisteredsales andusetaxdealers.Thespecificlistofitemsisonpages5and6ofTIP11A0103.ThisTIPisalso postedontheDepartmentswebsite:www.myflorida.com/dor. Thelistofclothingandschoolsupplyitemsisextensive,butnotallinclusive.Whetheraschool supplyitemqualifiesastaxexemptisbasedonthelabelingorpackagingoftheitem. Ifyouhaveaquestionaboutaspecificitemnotlisted,contacttheDepartmentat8003523671, orvisitourwebsite:www.myflorida.com/dor.

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5. Doesthe$75orlesstaxexemptionapplytothefirst$75ofanitemofclothingbeing purchased?Inotherwords,ifthesellingpriceofaclothingitemis$80,isthefirst$75exempt fromsalestax? No.Thetaxexemptionappliestoitemssellingfor$75orless.Ifanitemsellsformorethan$75 ($80inthisexample),taxisdueontheentiresellingprice. 6. Doesthe$15orlesstaxexemptionapplytothefirst$15ofaschoolsupplyitembeing purchased?Inotherwords,ifthesellingpriceofaschoolsupplyitemis$20,isthefirst$15 exemptfromsalestax? No.Theexemptionappliestoschoolsupplyitemssellingfor$15orless.Ifanitemsellsformore than$15($20inthisexample),taxisdueontheentiresellingprice. 7. CanIbuy3shirtseachcosting$75atthesametimeandhaveeachshirtbeexemptfromtax? MustIbuyeachshirtseparatelytogetthetaxbreak? Yes,youcanbuymorethanoneitematatimeonthesameinvoice.Youdonothavetopurchase eachitemseparatelytogetthetaxbreak.Theexemptionisbasedonthesalespriceofeachitem, notthetotalsalesamountonaninvoice.Everyeligibleitemofclothingwithasalespriceof$75 orlesssoldduringthetaxholidayperiodwillbeexemptfromsalestax.Similarly,everyqualified schoolsupplyitemwithasalespriceof$15orlesssoldduringthetaxholidayperiodwillbe exemptfromsalestax. 8. IstherealimitonthenumberofitemsImaypurchasetaxexemptduringthethreedaytax holiday? No.Theexemptionisbasedonthesalespriceoftheitem,notthetotalinvoiceamount.Each eligibleitemofclothingwithasellingpriceof$75orless,andeacheligibleschoolsupplyitem withasellingpriceof$15orless,boughtduringthethreedaytaxholidayperiod,isexemptfrom salestax. 9. Ifakeychainisincludedwithawalletorpurse,istheentirepurchasetaxable? Yes.Taxexemptitemssoldinsetswithtaxableitemsaresubjecttotax.Exemptitemsmustbe soldasaseparateiteminordertoqualifyfortheexemption.Setsthatincludebothexemptitems andtaxableitemsaresubjecttotax.Exemptitemslistedonthesameinvoiceastaxableitemsare exempt(whentheyareseparatelyidentifiedandseparatelypriced). 10.Whyarebriefcases,suitcases,andothergarmentbagsnotexemptfromtaxduringtheholiday period? Thelaw(Chapter201176,LawsofFlorida)specificallystatesthatbriefcases,suitcases,andother garmentbagsareNOTtaxexemptduringthetaxholidayperiod. 11.Dobusinessownershavetheoptionofnotparticipatinginthetaxholiday? No.Ifabusinessownermistakenlychargestaxinerrorduringtheholiday,theownershould refundthetaxtocustomers.Ifthetaxcannotberefunded,thebusinessownermustsendthetax totheDepartment.

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12.Arecertainbusinesslocationsnotincludedinthetaxholiday?Themeparks,entertainment complexes,publiclodgingestablishments,andairportsareexcludedfromparticipatinginthetax holiday.Salesatanyoftheseestablishmentsaretaxableasusual. 13.Whatshouldabusinessownerdoifhemistakenlycollectstaxduringthesalestaxholiday? Iftaxiscollectedinerror,thebusinessownershouldrefundthistaxtocustomers.Ifthetax cannotberefunded,thebusinessownermustsendthetaxtotheDepartment. 14.Iboughtsomeexemptitemsandthestoreownerchargedmetax.WhatshouldIdo? Takeyourreceipttothestoreownerandaskforarefundofthetax.

BusinessOwnerQuestions
15.Idontsellclothesorschoolsupplies.WhydidIgetthesalestaxholidayTaxInformation Publication(TIP)? TheTIPwasmailedtoallregisteredtaxpayerswithactivesalesandusetaxaccounts (approximately554,000accounts)toinformalldealerswhosellclothingorexemptitemsabout thesalestaxholiday.Althoughyoudonotsellclothingorotherexemptitems,manydealers whoseprimarybusinessissomethingotherthansellingclothingorschoolsuppliesmayneedthis information.Forexample,asmallgrocerystoremayselltshirts,sandals,hats,pens,orpencils. 16.Mybusinessisclosed.WhyamIstillgettingmailfromtheDepartmentofRevenue?Cancelmy account. IfyoureceivedaTIP,youraccountwascategorizedasactiveandrequiredtofileinJunewhenthe DepartmentcreatedtheTIPmailinglist.Tocloseyouraccount,youmustnotifyusinwritingthat youwanttocanceltheaccount.Werequireastatementfromyouthatyourbusinessisclosed, withtheaccountnumberthatshouldbecancelled.Whenyouraccountiscancelled,youshould notreceiveanymoreTIPsfromtheDepartment. Youcansendarequesttocancelyouraccountonlineat: https://taxapp2.state.fl.us/survey/txinquiry.cfm Youcanmailcorrespondenceto: TaxpayerServices FloridaDepartmentofRevenue MailStop32000 5050WTennesseeSt Tallahassee,Florida323990112 17.DoIneedtochangemyaccountingsystemtoshowthetemporaryexemptions? Youraccountingsystemshouldadequatelyidentifyalltaxexemptitemssold.Exemptsalesmade duringthetaxholidaymustbedocumentedinthesamemannerasotherexemptsalesmade throughouttheyear.

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Refunds/Exchanges
18.Ifacustomerbuysaneligibleitembeforethethreedaytaxholidayandthenexchangesit duringthetaxholidayforanothereligibleitem,isthecustomerduearefundoracreditoftax? Thecustomershouldgetafullrefundorcreditincludingtax,fortheexchangeditem,assuming thereisproofthattaxwaspaid.Notaxisdueontheeligibleitempurchasedduringtheholiday. 19.IfacustomerrequestsarefundorexchangebetweenAugust12andOctober31,2011,without asalesreceipt,maythebusinessownerrefundthetax? FortheperiodAugust12,2011throughOctober31,2011,whenacustomerreturnsanitemthat wouldqualifyfortheexemption,norefundoftaxmaybegivenunlessthecustomerprovidesa receiptorinvoiceshowingtaxwaspaid,ortheretailerhasdocumentationtoverifythatthetax waspaidonthespecificitem. 20.Ifacustomerreturnsanexemptitemandisgivenadifferentitemofequalpriceafterthe holidayperiod,issalestaxdueonthenewitem? Ifacustomerbuysataxexemptitemduringthetaxholidayperiodandlaterexchangesitforthe sameitem(differentsize,differentcolor,etc.),notaxwillbedue,eveniftheexchangeismade aftertheexemptionperiod. Ifacustomerbuysanitemduringthetaxholidayperiodandlaterreturnstheitemafterthe exemptionperiodandgetsadifferentitem,salestaxwillapplytothenewpurchaseevenifitis thesameprice.Forexample,ifashirtisreturnedandthecustomerbuysapairofpants,taxis dueonthepriceofthenewpants.

Coupons,Rebates,andDiscounts
21.Whydoesastorediscountcouponreducethesalespriceofaneligibleitembuta manufacturerscouponorrebatedoesnot? Manufacturerscouponsdonotreducethesalespriceofanitem.Therefore,amanufacturers couponcannotbeusedtoreducethesellingpriceofaneligibleitemofclothingto$75orlessora schoolsupplyitemof$15orless.Taxisdueonthetotalconsiderationreceivedbythestorefor thesaleofmerchandise. Manufacturerscouponexample:Ifacustomerbuysapursefor$85andpresentsa$15 manufacturer'scoupon,thesellingpriceofthepurseis$85anditistaxable.The$15couponis partoftheconsiderationpaidbythemanufacturertotheretailer;therefore,itdoesnotreduce theretailsellingpriceofthepurse. Discountexample:Acustomerbuysapursefor$85andthestoreoffersadiscountcouponof 20%.Thesellingpriceofthepurseis$68,andthepurseistaxexemptifpurchasedduringthetax holiday.(Storediscountcouponsanddiscountsreducethesalespriceofanitem.)

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 Rebateexample:Rebatesoccurafterthesaleanddonotaffectthesalespriceofanitem purchased.Ajacketsellsfor$85.Thecustomerreceivesa$10rebatefromthemanufacturer. Therebateoccursafterthesale,soitdoesnotreducethesalespriceofthejacket.Taxisdueon $85.

GiftCertificates
22.Ifagiftcertificateforclothingispurchasedduringthesalestaxholidaybutthecustomeruses thecertificateafterthesalestaxholiday,canthecustomerusethegiftcertificatetomake taxexemptpurchases? No,thepurchaseoftheeligibleitemmustbemadeduringthethreedaysalestaxholidaytobe exemptfromtax.Wheneligibleitemsarepurchasedduringthetaxholidayusingagiftcertificate, theeligibleitemsqualifyfortheexemption,regardlessofwhenthegiftcertificatewaspurchased. However,eligibleitemspurchasedaftertheholidayperiodusingagiftcertificatearetaxable, evenifthegiftcertificatewaspurchasedduringtheholidayperiod.

RainChecks
23.Whycantrainchecksissuedduringthesalestaxholidaybeusedaftertheholidaytomake taxexemptpurchases? Tobeexemptfromtax,theclothingorothereligibleitemmustbepurchasedduringthesalestax holiday.Whenaraincheckisissued,asalehasnotoccurred.Thesaleoccurswhentherain checkisredeemedandthespecifieditemispurchased.Therefore,ifanitemispurchasedusinga raincheckafterthetaxexemptionperiod,theitemistaxable.

LayawaySales
24.Areclothingitemsthatareputonlayawayduringthethreedaytaxholiday,eligibleforthetax exemption? Yes.Itemsplacedonlayaway(setasideforacustomerwhomakesadeposit,agreestopaythe balanceofthepurchasepriceoveraperiodoftime,andreceivesthemerchandiseattheendof thepaymentperiod)duringthesalestaxholidayareexemptfromtax.Also,ifthefinalpayment onalayawayorderofeligibleitemsismadeandthemerchandiseisgiventothecustomerduring theholidayperiod,theitemsareexemptfromtax,regardlessofwhentheywereplacedon layaway.

MailOrderorInternetSales
25.IfIbuytaxexemptitemsbymailorder(normallyIpayusetaxonFormDR15MO),doIgetthe exemption? Yes.Allpurchasesofeligibleitemsduringthesalestaxholidaysareexemptfromtax,including purchasesmadebymailorder. 26.HowdoestheexemptionapplytosalesovertheInternet? SalesovertheInternetaretreatedthesameasmailordersales.
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 27.HowdoIproportionallyallocateshippingchargesbetweentheitemsorderedonamailorder sale? Toproportionallyallocatetheshippingcharge,theamountofeachitemshouldbedividedbythe totalamountoftheitemsorderedtoobtainthepercentagethateachitembearstothetotal order.Thenmultiplythetotalshippingchargebythepercentageforeachitemtodeterminethe amountoftheshippingchargeapplicabletothatitem. Theshippingchargeforeachitemmustbeseparatelystatedontheinvoicetothecustomer.The shippingchargeispartofthesellingpricewhendeterminingifanitemmeetsthetaxexempt threshold. Forexample,acustomerordersa$75dressanda$25shirt,foratotalof$100.Theshipping chargeis$10.Example:$25/$100=25%(25dividedby100equals25%).Therefore,25%or $2.50oftheshippingchargeisallocatedtotheshirt,andincludedaspartofthesellingpriceof theshirt($27.50).Theother75%($7.50)isincludedinthesellingpriceofthedress,makingthe priceofthedress$82.50,whichwouldnotqualifyfortheexemption.

RecordsandReporting
28.DoIneedtoaccountfortaxholidaytaxexemptsalesdifferently? Therearenoadditionalrecordkeepingrequirements.Youmustmaintainyourrecordsand documentexemptsalesasrequiredundercurrentlaw.

MerchantsLicenseorOtherFees(TwoCitiesinBayCountyOnly)
29.InPanamaCityandPanamaCityBeach,Florida,whyisa1%merchantslicensefee(sometimes referredtoasagrossreceiptsfee)addedtothesalespriceofclothingorschoolsupplies?For example,ifthesalespriceofaclothingitembeforeaddingthe1%merchantslicensefeeisless than$75,butafteraddingthe1%merchantslicensefeethesalespriceisgreaterthan$75,can theitembepurchasedtaxexempt? The1%merchantslicensefeeisincludedinthetotalsalespriceofanitem,evenifseparately stated.Therefore,thetotalsalesprice,includingthe1%merchantslicensefee,istheamount whichdeterminesthetaxabilityoftheitem. Note:PanamaCityandPanamaCityBeacharetheonlylocationsinFloridawherea1% merchantslicensefee(alsoreferredtoasagrossreceiptsfee)isimposed.

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