The Florida Retail Federation recently issued a letter requesting the Florida Department of Revenue to rescind a Technical Information Publication (TIP) it issued in March 2012. This TIP, if enforced, would have significant implications for retailers selling prepaid calling plans and services. According to this TIP, the following prepaid calling plans are subject to the CST instead of being subject to the State and Local Sales Tax:
• plans that include text messaging, multimedia messaging, web access, or e-mail;
• plans that provide for unlimited minutes;
• plans that are not sold in predetermined units or dollars;
• or plans that do not originate using access numbers or authorization codes.
Our letter asserted that this TIP constituted an unpromulgated rule. Further, the letter informed the Department that we would pursue appropriate legal action in the event it attempted to enforce the TIP. While we have not received a formal response to our letter, we are pleased to share with you that the Department has rescinded the TIP.
Executive Vice President
Randy is responsible for coordinating all aspects of FRF's government affairs efforts.
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For many years sales subject to state sales taxes across the country, including Florida, have not been collected. Due to a 1992 Supreme Court decision, when sales occur over the Internet by a seller whose physical presence is outside of Florida, that retailer does not need to collect Florida’s state sales tax. The practical impact of this decision has been to leave billions of dollars of sales tax collections uncollected.
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