Tractor Equipment Vendor Had Substantial Nexus With Florida

Thursday, August 7th, 2014

A tractor in Florida.

The Florida Department of Revenue recently released a ruling that a taxpayer had substantial nexus with Florida and thus had to collect Florida sales tax.

The taxpayer, located in Georgia, sold heavy tractor equipment. It did not have an office or showroom or any employees in Florida. It did not provide Florida residents with financing for its sales. It did not provide assembly, technical advice, or maintenance services to Florida customers. It did, however, make over one hundred sales to Florida customers, and it delivered equipment into Florida using its own trucks. It also advertised in a Florida publication and accepted equipment from Florida for trade-ins.

Florida taxes sales of tangible personal property, including heavy equipment. Vendors that have "substantial nexus" with Florida must collect the tax and remit it to the state. "Nexus" is measured by how much connection a vendor has with the state. Vendors that only have connection with Florida customers by common carrier or mail do not have substantial nexus.

The ruling held that the taxpayer had substantial nexus with Florida. The taxpayer used its own company trucks to deliver equipment into Florida, so it had more connection with Florida than it would have through common carrier or mail. The taxpayer also had connections with Florida through advertising in a Florida publication, accepting Florida trade-ins, and making sales to Florida customers. Florida could therefore require the taxpayer to collect and remit Florida tax.;%20DOR%202014-002-FOF.pdf

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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

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