SALT Report 2235 – The Florida Department of Revenue issued a technical assistance advisement regarding the taxability of financial documents that are prepared by a Taxpayer and transferred to its Parent company.
The Taxpayer in this case is an indirect, wholly owned, subsidiary of the Parent. The Taxpayer is charged with providing support services to the Parent which includes the preparation of various financial documents, financial reports, tax returns, memoranda, and work papers. When the Taxpayer completes a report he sends it to the Parent either through email, overnight mail, or regular mail. The Taxpayer requested guidance as to whether its support services are subject to sales and use tax.
Based on the facts presented, the Department determined that the Taxpayer is providing professional services that are not subject to tax under section 212.08(7)(v) F.S. The statute provides that professional or personal services that do not involve the sale of tangible personal property, or only involve inconsequential elements of tangible personal property, even though they are not separately stated are not subject to tax. Likewise, section 212.08(7)(v) F.S. also provides that the provision of financial information services are not subject to tax when the information is of an individual nature and is not provided to other parties.
Accordingly, the Taxpayer’s preparation and transfer of financial documents to the Parent constitute “inconsequential elements” within the meaning of the statue and are not subject to tax.
For Further Information
Florida Department of Revenue – Technical Assistance Advisement #13A-001