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Florida: America's Foremost Purveyor of Tax Nonsense?

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A truism in the world of sales tax holds that renting a thing and selling it outright are equivalent actions and should be taxed identically. Well, Welcome to Florida, folks! In a fit of absurdity, The Sunshine State’s Department of Revenue accomplished a fine feat of fatuity earlier this year when it issued two Technical Assistance Advisements (Nos. 14A19-005 and 14A19-006), the content of which tosses that axiom into the chipper. In sequence:

First, the DoR supplied a series of interlocking definitions intended to provide context for advisory 14A19-005:

  • Communications services include “video services”
  • “Video services” include pay-per-view and digital video services
  • Information services are excluded from the definition of communications services
  • Information services do not include video services

Okay so far?

The Department had been asked to opine concerning whether a telco’s selling electronically transmitted home entertainment programming – that is, television shows, live sports broadcasts, movies, local and national news, and other material for home viewing, here called “digital video content” – was susceptible to either Florida’s Sales Tax or Communications Services Tax (“CST”). The inconsistency and illogicality of the official responses to these straightforward inquiries is hard to believe and impossible to understand.

The question of whether sales tax attaches to purchases of digital video content came down to a finding that runs counter to the laws of physics and of human nature, but which is nevertheless consonant with Florida Rule 12A-1.062(5), F.A.C., which insists that digital video content is not tangible personal property. “The charge for furnishing information by way of electronic images which appear on the subscriber’s video display screen does not constitute a sale of tangible personal property nor does it constitute the sale of a taxable information service.”

Question: How can something “appear” on-screen yet not be “tangible” to the human sense of sight? That’s an unanswerable conundrum of the DoR’s own fabrication. The TAA concludes, “The taxpayer does not furnish any tangible personal property for sale or rental to the customer.” [Sigh.] It’s extremely difficult to argue with such ill-founded and ill-informed conviction and certitude, such absolutist pronouncements from faulty premises.

Further into the Advisement, Departmental analysis of the reach of the CST gets, if anything, even wackier: “[R]ental of digital video content falls within the definition of a ‘video service’ as a pay-per-view or a digital video service for CST purposes. ‘Video services’ are ‘communications services’ and are subject to CST.” No problem. However (and the DOR says this with a straight face), “A customer’s purchase of digital video content, whether downloaded and/or stored on their online library, is the sale of an information service, pursuant to Florida law. It is not the sale of a communications service and is not subject to CST” (emphasis supplied). Thus, the very same commodity is considered to be two completely different things – and to be taxed contrarily – depending solely upon how it is transferred. This makes utterly no sense, and flies in the face of tax policy in every single state other than Florida.

Attempting to deal with related questions (and with similarly inscrutable results which are, furthermore, virtually impossible to reconcile with TAA 14A19-005), on the same date the DoR also published Technical Assistance Advisement No. 14A19-006 in reply to questions regarding the applicability of these taxes – Sales and CST – to charges to participate in a customer service that offers “Music Content” (which will “allow you to purchase and access digital versions of audio recordings, artwork and information relating to the audio recordings, and other content” by either streaming or downloading). Yet again, a strong bias against common sense permeates the Department’s response here: in its confounding the senses of sight and hearing, in its continuing misconstruction of the word “tangible,” and in its increasingly nonsensical definitions:

“The definition of ‘video service’ provides that ‘[the] term includes … music services.’ [Say WHAT?] The XXXX Music service benefit [“XXXX” being the DoR’s redacted expression of the requester’s real name] is a music service that falls within the definition of a ‘video service’ pursuant to Florida law. … The XXXX Video service benefit is ‘… electronic images which appear on [a] video display screen …’ The XXXX Music benefit is likewise not an information service for sales tax purposes. The Taxpayer does not furnish any tangible personal property for sale or rental to the customer for either service benefit. The XXXX Video and XXXX Music service benefits are not sales of tangible personal property, or other taxable services, and are not subject to sales tax under Florida law.” (Because neither audio nor video are perceptible to the human senses??)

Plugging onward: “The XXXX Video benefit provided to XXXX Members is a digital video service, which pursuant to Florida law, is a communications service and a ‘video service’ for CST purposes … the portion of the XXXX Membership charge attributable to the XXXX Video service is subject to CST when charged to a Florida service address.” Additionally, “XXXX Music service … is a music service and properly characterized as a ‘video service’ pursuant to Florida law. As such, the portion of the XXXX Membership charge attributable to the XXXX Music service, when charged to a Florida service address, is subject to CST.”

Thus, in Florida, video is a taxable communications service when you rent it, but it’s a tax-exempt information service when you buy it; and music is a type of video. All makes perfectly good sense – in Wonderland, maybe.

About the Author: Marc Palmer Kram is a Senior Tax Analyst at Wolters Kluwer Tax & Accounting US, where he performs quality control and troubleshooting on the vast taxability database supporting its best-in-class CCH tax-compliance software, and then sometimes writes about what he finds. Learn more about him by visiting his author bio page. Learn more about Wolters Kluwer at and

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