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Florida allows a cap on the County sales tax (a.k.a. Surtax) at $5000. How does Cyrious address this?

Cyrious researched the question of the cap on the surtax (a.k.a County Tax) in the state of Florida. The best description of the tax comes from “Retailer and Wholesaler Standard Industry Guide” issued by the Florida Department of Revenue. (See http://dor.myflorida.com/dor/taxes/sigs/retailer_wholesaler_external.pdf release 08.01.2010.)

Page 11 provides a good description of the surtax exemption:

The surtax is not limited to sales of tangible personal property. However, when tangible personal property is sold for more than $5,000, the surtax only applies to the first $5,000 of the purchase price. Only the first $5,000 of a single sale of tangible personal property is subject to discretionary sales surtax if the property is sold as a single item, in bulk, as a working unit, or as part of a working unit. The $5,000 limit does not apply to commercial rentals, transient rentals, or services.

The $5,000 limitation is applied on an item-by-item basis, except for very specific circumstances when multiple items will be viewed as a single item. In order for the exception to apply, two tests must be satisfied. First, there must be a single sale in which one purchaser buys all the items at the same time, with a purchase order or other documentary evidence that there has been such a single transaction. Second, the multiple items reflected on that documentation must either be items that are normally sold in bulk, or they must be items that will be assembled into a working unit or a part of one (See Section 212.054(2)(a), F.S. and TAA 01A-042).

There are a couple of key terms that need clarification:

• Tangible Personal Property is contrasted with Real Property. Real property refers to property that is not movable and considered part of the facilities. According to page 20 of the same document), under the section entitled “Fabrication of Tangible Person Property”, if a piece of glass is cut to size for a specific property it is considered Real Property, not Personal Property. My reading is that this same concept would apply to signage.
• The Item-By-Item Basis requirements mean that separate items should be individually taxed for purposes of the tax cap. Purchases in quantity of the same item should be considered one transaction, which is consistent with Control's handling of all items in one line item.

Based on these, Cyrious implements the surtax cap on the line item level. Additional modifications to this system would have to be implemented manually (by creating a tax class with only Florida state tax and splitting part of the sales dollars onto this line).

We invite further informed commentary.

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