News and Insights

GPS Device Sales Do Not Qualify for Florida Resale Exemption

Tax Development Sep 27, 2016

The Florida Department of Revenue (“Department”) issued Technical Assistance Advisement, No. 16A-007, which provided guidance on the application of the Florida resale exemption to sales of motor vehicle tracking devices. The taxpayer in question is a seller of tracking devices and tracking information subscription services. The taxpayer sold tracking devices to car dealers, who in turn provided them with valid Florida resale certificates in lieu of paying sales tax. The question at hand was whether it was proper for the taxpayer to accept the resale certificate and not charge the dealerships sales tax.

The Department’s analysis focused on the contract between the taxpayer and the car dealership. The contract between the taxpayer and the car dealership included language that stated the devices could not be resold without the prior written authorization of the taxpayer. The taxpayer argued that although it had not provided written authorization, it had never limited the reselling of the devices and further maintained that its acceptance of the resale certificate should be viewed as approval of any subsequent resale. The Department concluded that the taxpayer’s lack of contract enforcement did not change the nature of the agreement. Therefore, the taxpayer could not accept a resale exemption in good faith, when the taxpayer had not provided authorization in writing, prior to the resale, as required by the contract. As such, the sale of the devices to the car dealership was found to be taxable.


Julie Moore