Florida Issues Guidance for Online Shopping Memberships

Monday, January 26th, 2015

A person online shopping.

The Florida Department of Revenue issued a technical assistance advisement on the taxability of online shopping club benefits.

The taxpayer offered a membership program to customers for a fee. The fee was a lump sum charge for member benefits including shipping benefits, streaming video services, and electronic book purchases, rentals, and downloads. The taxpayer added downloadable video services, downloadable and streaming music services, a bulk shipping benefit, and pricing discounts on certain tangible personal property.

Florida imposes the Communications Service Tax (CST) on the retail sale of communications services, which include video services. "Video services" are the transmission of video, audio, or other programming services to a purchaser. The term includes video and music services. Membership dues that include taxable property or taxable services are taxable if they include the price of the taxable item.

The online shopping membership fees were subject to CST. The video streaming services were subject to the CST. The shipping and e-book services were not taxable. However, because the video streaming services charge was not listed separately from the shipping and e-book service charges, the entire lump sum membership fee was subject to CST.


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

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.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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