Finally, items that were purchased for resale do not qualify for the exemption. The rule also states that sales at auction, or through a broker, agent or dealer are taxable. Salvage or scrap disposed of through the merger or liquidation of a business, or in exchange for stock, would be exempt. However, there is an exception to the latter exception. In addition, the rules also provides that inventory does not qualify for the exemption and neither does the sale of salvage or scrap. Specifically, for transfers in exchange for stock, the stock value must equate to 80% of the fair market value of the asset transferred. This is where the status of the parties comes into consideration. Gifts, transfers from partnerships to the partners, or inter-family transfers all fall outside the scope of the requirement that businesses collect and remit tax on transfers of titled tangible personal property. This means aircraft, boats, mobile homes, and motor vehicles required to be registered, licensed, titled, or documented in this state or by the US Government, are not exempt under the occasional or isolated sale rule.Īs one may expect, there are exceptions to this exception. The largest restriction on the isolated or occasional sales exemption from sales tax is any type of property required to be registered. This means all types of property qualify except those specifically enumerated in the rule. The type of property, or service, that qualifies for this exemption is defined in the negative. Types of Property That Do Not Qualify for the Exemption Also, it is worth nothing that the sales of property must be completed within 60 days of the date of the first distribution. Any sales that occur after March 2, which is 30 days from January 31, will then be subject to tax. The business has met the limit for sales for the year. Even though one period has 30 days and the other has 16 days, these are two separate 30 day periods. January 1 to 30 is one sale, while January 31 through February 15 is a second. The furniture sales occur between January 1 and February 15. In fact, one “time” can mean a series of sales occurring during a period of up to 30 days.įor example, an office undergoing renovation sells its furniture. However, two times does not necessarily mean two individual transactions. A third sale in a twelve month period result in the Department considering that taxpayer as “engaged in business” and therefore required to collect and remit sales and use tax. The frequency of occasional or isolated sales is limited to two times during any 12-month period. In other words, if you are selling a 1960’s record player at your garage sale, you don’t have to find evidence that sales tax was paid in 1960 before you sell it tax exempt. The statute of limitations for the department to determine and assess tax is generally three years. The seller must have paid sales tax when the tangible personal property was purchased, however, this provision is waived if the property has been held for longer than the statute of limitations to assess the tax under 95.091, Florida Statutes. Moreover, the sale cannot be made through a broker, agent, or auctioneer. However, the property sold cannot be an aircraft, boat, mobile home, or motor vehicle, and cannot include the distribution of assets held in inventory. If the intent of the parties is the transfer of property in exchange for shares of stock, or as part of a merger or a liquidation, the transaction is not taxable under the occasional or isolated sales rule. Specifically, the rule considers: 1) the intent of the parties 2) the frequency and duration of the sales 3) the type of tangible personal property or services offered for sale 4) the location where the sales take place and 5) the status of the parties, as it relates to the tangible personal property or taxable services being sold. These transactions are exempt, provided the sales or series of sales meet certain requirements. Occasional or isolated sales or transactions can involve sales of tangible personal property or taxable services. What Qualifies as an Occasional or Isolated Sale However, there are other provisions to the occasional or isolated sale rule that affect businesses as well. This exception is most commonly utilized by individuals who are selling items they no longer use, such as a garage sale. Like many states, Florida has this so-called “garage sale” exception which allows the sale of property to be tax exempt where the sale is not made in the normal course of business. While, most people are familiar with the principle that sales of tangible personal property at retail are subject to sales tax, they may not be familiar with the common exception to this rule for occasional or isolated sales. Florida exempts both occasional sales and isolated sales from sales and use tax.
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