Florida Regulations 12A-1.038: Consumer’s Certificate of Exemption; Exemption Certificates
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(1) It is the specific legislative intent that each and every sale, admission, use, storage, consumption, or rental is taxable, unless such sale, admission, use, storage, consumption, or rental is specifically exempt. The exempt nature of the transaction must be established by the selling dealer. Unless the selling dealer shall have taken from the purchaser the required documentation as provided in subsection (3), (4) or (5) of this rule, the sale shall be deemed to be taxable. Subsection (3) of this rule governs sales made to exempt entities (other than governmental units) that hold a Consumer’s Certificate of Exemption. Subsection (4) of this rule governs sales made directly to governmental units. Subsection (5) of this rule governs sales exempt based on the use of the property or services.
(2) How to obtain a consumer’s certificate of exemption.
(a)1. Any organization determined by the Internal Revenue Service to be currently exempt from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, any state, county, municipality, or other political subdivision of a state, qualifying for the exemption provided in Florida Statutes § 212.08(6), any state chartered credit union qualifying for exemption under Florida Statutes § 213.12(2), and any other organization qualifying for exemption under Florida Statutes § 212.08(7), desiring to qualify for these exemptions must obtain a Consumer’s Certificate of Exemption. Any limited liability company determined by the Internal Revenue Service to be currently exempt from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, must obtain a separate Consumer’s Certificate of Exemption, even though its parent corporation may currently hold a Consumer’s Certificate of Exemption. The United States Government or any of its federal agencies is not required to obtain a Consumer’s Certificate of Exemption.
2. To obtain a Consumer’s Certificate of Exemption, the organization must file an Application for a Consumer’s Certificate of Exemption (Form DR-5, incorporated by reference in Fl. Admin. Code R. 12A-1.097) and documentation sufficient to substantiate the applicant’s claim for exemption with the Department. The Department will issue a Consumer’s Certificate of Exemption (Form DR-14) to each applicant qualifying for exemption under Section 212.08(6) or (7) or 213.12(2), F.S.
(b) A Consumer’s Certificate of Exemption will be valid from its “”Issue Date”” through its “”Expiration Date,”” as indicated on the certificate (Form DR-14). Any dealer selling taxable property, services, or admissions to an exempt entity prior to the date of issue, or after the date of expiration, indicated on the exempt entity’s Consumer’s Certificate of Exemption, is required to collect tax. An entity whose Consumer’s Certificate of Exemption has been revoked by the Department is prohibited from extending a copy of its certificate to purchase taxable property, services, or admissions exempt from tax. However, a selling dealer who accepts in good faith a copy of a Consumer’s Certificate of Exemption that appears valid and current on its face will not be liable for any applicable tax due on sales to the entity or subject to other punitive actions.
(3) Sales made to exempt entities other than governmental units.
(a) An entity that holds a valid Consumer’s Certificate of Exemption (Form DR-14) issued by the Florida Department of Revenue may extend a copy of its certificate to the selling dealer to purchase or rent taxable property, admissions, or services used for its authorized tax-exempt purpose in lieu of paying sales tax. Purchases of property, admissions, or services used for the entity’s authorized tax-exempt purposes must be made with the purchasing entity’s funds and may not be made with personal funds of the purchasing entity’s authorized representative. When the payment for taxable property, admissions, or services is made with an authorized representative’s personal funds, the purchase is subject to tax, even if the representative is subsequently reimbursed with the entity’s funds.
(b) To make purchases or rentals for the purposes of resale, the entity must be registered as a sales tax dealer and issue the selling dealer an Annual Resale Certificate (Form DR-13), as provided in Fl. Admin. Code R. 12A-1.039
(c) It is the exempt entity’s responsibility to determine whether the purchase or rental will be used for its authorized tax-exempt purpose or for the purposes of resale and to provide the proper documentation to the selling dealer. In lieu of obtaining a copy of the entity’s valid Consumer’s Certificate of Exemption, the selling dealer may obtain a Transaction Authorization Number or a Vendor Authorization Number from the Department when making a tax-exempt sale to the entity. A selling dealer who accepts in good faith a copy of an entity’s valid Consumer’s Certificate of Exemption, or a Transaction Authorization Number or Vendor Authorization Number issued by the Department will not be held liable for any tax due on sales made to the entity during the effective dates indicated on the certificate or the effective dates of the authorization number. The selling dealer must maintain the required authorization numbers and certificates in its books and records for the time period provided in subsection (6) of this rule.
(d) An exemption certificate granted by any other state, District of Columbia, or territory of the United States to the selling dealer is not sufficient to make tax-exempt purchases or rentals in Florida. The fact that an entity holds an exemption from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, is not sufficient to make tax exempt purchases or rentals in Florida.
(e) An entity holding a valid Consumer’s Certificate of Exemption may not extend a copy of its certificate to a contractor to be applied to contracts for the construction or improvement of real property. See Fl. Admin. Code R. 12A-1.094, for guidance on direct purchases by governmental entities of construction materials in real property projects.
(f) The validity of a Florida Consumer’s Certificate of Exemption may be verified by using the Department’s online Certificate Verification System at www.floridarevenue.com/taxes/certificates, by using the Department’s FL Tax mobile application, or by calling the Department’s automated nationwide toll-free verification system at 1(877)357-3725. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).
(g)1. Transaction authorization number issued prior to or at the point-of-sale – valid for a single transaction only. In lieu of obtaining a copy of the exempt entity’s valid Consumer’s Certificate of Exemption for each sale, the selling dealer may obtain a Transaction Authorization Number or a Vendor Authorization Number from the Department when making a tax-exempt sale to the exempt entity or its authorized representative.
2. The selling dealer may obtain a transaction authorization number prior to or at the point-of-sale by using the Department’s online Certificate Verification System at www.floridarevenue.com/taxes/certificates, by using the Department’s FL Tax mobile application, or by calling the Department’s automated nationwide toll-free verification system at 1(877)357-3725. When using the Department’s online Certificate Verification System, the dealer may key up to five Florida Consumer’s Certificate of Exemption numbers into the system. When using the Department’s FL Tax mobile application or the Department’s automated nationwide toll-free verification system, the selling dealer is prompted to key in a single Florida Consumer’s Certificate of Exemption number. Each verification system will issue a transaction authorization number or alert the selling dealer that the purchaser does not have a valid Florida Consumer’s Certificate of Exemption. Selling dealers using the automated telephone verification system who do not have a touch-tone telephone will be connected to a live operator Monday through Friday (excluding holidays) 8:00 a.m. to 5:00 p.m. (Eastern Time). Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).
3. The selling dealer must document the transaction authorization number on the sales invoice, purchase order, or other document that is prepared by the purchaser or the selling dealer to document the tax exempt purchase by the exempt entity.
4. A transaction authorization number is valid for a single sales transaction and is not valid to properly document subsequent sales made to the same entity. The selling dealer must obtain a new vendor authorization number for subsequent tax exempt transactions.
(h)1. Vendor authorization number for regular customers – valid for calendar year issue. In lieu of obtaining a copy of the exempt entity’s valid Florida Consumer’s Certificate of Exemption or a Transaction Authorization Number from the Department for each sale to the entity, the selling dealer may obtain a Vendor Authorization Number for that entity. This option is available to selling dealers throughout the calendar year without limitation.
2. The “”vendor authorization number”” is a customer-specific authorization number that will be valid for all sales made to an exempt entity during the calendar year.
3. To obtain vendor authorization numbers, the selling dealer may use the Department’s online Certificate Verification System at www.floridarevenue.com/taxes/certificates or send a written request to the Department. Dealers obtaining authorization numbers by submitting a written request to the Department may obtain the electronic format for sending the customer data from the Department’s web site at www.floridarevenue.com or call the Department at (850)488-3516 to obtain the electronic format.
a. The written request should be forwarded to the Florida Department of Revenue, Account Management MS #1-5730, Florida Department of Revenue, 5050 W Tennessee Street, Tallahassee, Florida 32399-0160, along with an electronic file containing a list of the dealer’s regular customers for which the dealer has a Florida Consumer’s Certificate of Exemption number on file. In response to the request, the Department will issue to the selling dealer, using the same electronic medium, a list containing a unique vendor authorization number for each exempt entity who is a holder of a valid Florida Consumer’s Certificate of Exemption.
b. The Department’s online Certificate Verification System allows the user to verify up to five Florida Consumer’s Certificate numbers and to obtain a transaction authorization number for single sales made to each exempt entity at once. The system also allows the user to upload a batch file of up to 50,000 accounts for verification of a Florida Consumer’s Certificate of Exemption and, 24 hours later, retrieve the file containing the vendor authorization numbers for all sales made to an exempt entity during the calendar year.
4. The selling dealer may make tax-exempt sales to the exempt entity during the period in which the vendor authorization number for that entity is valid. Vendor authorization numbers are valid for the remainder of the calendar year during which they are issued. However, vendor authorization numbers issued by the Department in November or December are valid for the remainder of that calendar year and the next calendar year.
(4) Sales made directly to governmental units.
(a) Any state, or any county, municipality, or political subdivision of a state that holds a valid Consumer’s Certificate of Exemption (Form DR-14) issued by the Florida Department of Revenue may issue a copy of its certificate to the selling dealer to purchase or rent taxable items or services tax-exempt in lieu of paying sales tax. The United States Government is not required to hold a Consumer’s Certificate of Exemption to make tax-exempt purchases and rentals.
(b) Payment for tax-exempt purchases or rentals of property or services must be made directly to the selling dealer by the governmental unit of a state, or any county, municipality, or political subdivision of a state. Payments made with an authorized P-Card are considered to be made directly by the governmental unit. When the payment for taxable property or services is made with the personal funds of an authorized representative of the governmental unit, the purchase is subject to tax, even if the representative is subsequently reimbursed with the governmental unit’s funds. The authorized representative of any state, county, municipality, or political subdivision of a state, must choose one of the following methods to make tax-exempt purchases or rentals:
1. Use an authorized Purchasing or Procurement Card (“”P-Card””) which indicates on its face that it is a Florida government purchasing card for official business only. Information printed on the front of the card will include the agency’s name, the agency’s Consumer’s Certificate of Exemption number, the account number, the name of the cardholder (employee), and the expiration date. The selling dealer who accepts the “”P-Card”” should retain a copy of the face of the “”P-Card”” to note the Consumer’s Certificate of Exemption number, account number, and cardholder name for its books and records to properly document the exempt sale. When the selling dealer cannot copy the “”P-Card,”” the dealer must retain the Consumer’s Certificate of Exemption number, the account number, cardholder’s name, and the expiration date of the “”P-Card.””
2. Issue a certificate containing the governmental unit’s name, address, the Consumer’s Certificate of Exemption number, the effective date and expiration date of the Consumer’s Certificate of Exemption, and the signature of an authorized representative of the governmental unit. The following is a suggested format of the certificate:
EMPLOYER’S AUTHORIZATION TO MAKE
PURCHASES ON BEHALF OF AN EXEMPT GOVERNMENTAL UNIT
_____________________________
DATE
Terms Used In Florida Regulations 12A-1.038
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
(a)1. Any organization determined by the Internal Revenue Service to be currently exempt from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, any state, county, municipality, or other political subdivision of a state, qualifying for the exemption provided in Florida Statutes § 212.08(6), any state chartered credit union qualifying for exemption under Florida Statutes § 213.12(2), and any other organization qualifying for exemption under Florida Statutes § 212.08(7), desiring to qualify for these exemptions must obtain a Consumer’s Certificate of Exemption. Any limited liability company determined by the Internal Revenue Service to be currently exempt from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, must obtain a separate Consumer’s Certificate of Exemption, even though its parent corporation may currently hold a Consumer’s Certificate of Exemption. The United States Government or any of its federal agencies is not required to obtain a Consumer’s Certificate of Exemption.
2. To obtain a Consumer’s Certificate of Exemption, the organization must file an Application for a Consumer’s Certificate of Exemption (Form DR-5, incorporated by reference in Fl. Admin. Code R. 12A-1.097) and documentation sufficient to substantiate the applicant’s claim for exemption with the Department. The Department will issue a Consumer’s Certificate of Exemption (Form DR-14) to each applicant qualifying for exemption under Section 212.08(6) or (7) or 213.12(2), F.S.
(b) A Consumer’s Certificate of Exemption will be valid from its “”Issue Date”” through its “”Expiration Date,”” as indicated on the certificate (Form DR-14). Any dealer selling taxable property, services, or admissions to an exempt entity prior to the date of issue, or after the date of expiration, indicated on the exempt entity’s Consumer’s Certificate of Exemption, is required to collect tax. An entity whose Consumer’s Certificate of Exemption has been revoked by the Department is prohibited from extending a copy of its certificate to purchase taxable property, services, or admissions exempt from tax. However, a selling dealer who accepts in good faith a copy of a Consumer’s Certificate of Exemption that appears valid and current on its face will not be liable for any applicable tax due on sales to the entity or subject to other punitive actions.
(3) Sales made to exempt entities other than governmental units.
(a) An entity that holds a valid Consumer’s Certificate of Exemption (Form DR-14) issued by the Florida Department of Revenue may extend a copy of its certificate to the selling dealer to purchase or rent taxable property, admissions, or services used for its authorized tax-exempt purpose in lieu of paying sales tax. Purchases of property, admissions, or services used for the entity’s authorized tax-exempt purposes must be made with the purchasing entity’s funds and may not be made with personal funds of the purchasing entity’s authorized representative. When the payment for taxable property, admissions, or services is made with an authorized representative’s personal funds, the purchase is subject to tax, even if the representative is subsequently reimbursed with the entity’s funds.
(b) To make purchases or rentals for the purposes of resale, the entity must be registered as a sales tax dealer and issue the selling dealer an Annual Resale Certificate (Form DR-13), as provided in Fl. Admin. Code R. 12A-1.039
(c) It is the exempt entity’s responsibility to determine whether the purchase or rental will be used for its authorized tax-exempt purpose or for the purposes of resale and to provide the proper documentation to the selling dealer. In lieu of obtaining a copy of the entity’s valid Consumer’s Certificate of Exemption, the selling dealer may obtain a Transaction Authorization Number or a Vendor Authorization Number from the Department when making a tax-exempt sale to the entity. A selling dealer who accepts in good faith a copy of an entity’s valid Consumer’s Certificate of Exemption, or a Transaction Authorization Number or Vendor Authorization Number issued by the Department will not be held liable for any tax due on sales made to the entity during the effective dates indicated on the certificate or the effective dates of the authorization number. The selling dealer must maintain the required authorization numbers and certificates in its books and records for the time period provided in subsection (6) of this rule.
(d) An exemption certificate granted by any other state, District of Columbia, or territory of the United States to the selling dealer is not sufficient to make tax-exempt purchases or rentals in Florida. The fact that an entity holds an exemption from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, is not sufficient to make tax exempt purchases or rentals in Florida.
(e) An entity holding a valid Consumer’s Certificate of Exemption may not extend a copy of its certificate to a contractor to be applied to contracts for the construction or improvement of real property. See Fl. Admin. Code R. 12A-1.094, for guidance on direct purchases by governmental entities of construction materials in real property projects.
(f) The validity of a Florida Consumer’s Certificate of Exemption may be verified by using the Department’s online Certificate Verification System at www.floridarevenue.com/taxes/certificates, by using the Department’s FL Tax mobile application, or by calling the Department’s automated nationwide toll-free verification system at 1(877)357-3725. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).
(g)1. Transaction authorization number issued prior to or at the point-of-sale – valid for a single transaction only. In lieu of obtaining a copy of the exempt entity’s valid Consumer’s Certificate of Exemption for each sale, the selling dealer may obtain a Transaction Authorization Number or a Vendor Authorization Number from the Department when making a tax-exempt sale to the exempt entity or its authorized representative.
2. The selling dealer may obtain a transaction authorization number prior to or at the point-of-sale by using the Department’s online Certificate Verification System at www.floridarevenue.com/taxes/certificates, by using the Department’s FL Tax mobile application, or by calling the Department’s automated nationwide toll-free verification system at 1(877)357-3725. When using the Department’s online Certificate Verification System, the dealer may key up to five Florida Consumer’s Certificate of Exemption numbers into the system. When using the Department’s FL Tax mobile application or the Department’s automated nationwide toll-free verification system, the selling dealer is prompted to key in a single Florida Consumer’s Certificate of Exemption number. Each verification system will issue a transaction authorization number or alert the selling dealer that the purchaser does not have a valid Florida Consumer’s Certificate of Exemption. Selling dealers using the automated telephone verification system who do not have a touch-tone telephone will be connected to a live operator Monday through Friday (excluding holidays) 8:00 a.m. to 5:00 p.m. (Eastern Time). Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY).
3. The selling dealer must document the transaction authorization number on the sales invoice, purchase order, or other document that is prepared by the purchaser or the selling dealer to document the tax exempt purchase by the exempt entity.
4. A transaction authorization number is valid for a single sales transaction and is not valid to properly document subsequent sales made to the same entity. The selling dealer must obtain a new vendor authorization number for subsequent tax exempt transactions.
(h)1. Vendor authorization number for regular customers – valid for calendar year issue. In lieu of obtaining a copy of the exempt entity’s valid Florida Consumer’s Certificate of Exemption or a Transaction Authorization Number from the Department for each sale to the entity, the selling dealer may obtain a Vendor Authorization Number for that entity. This option is available to selling dealers throughout the calendar year without limitation.
2. The “”vendor authorization number”” is a customer-specific authorization number that will be valid for all sales made to an exempt entity during the calendar year.
3. To obtain vendor authorization numbers, the selling dealer may use the Department’s online Certificate Verification System at www.floridarevenue.com/taxes/certificates or send a written request to the Department. Dealers obtaining authorization numbers by submitting a written request to the Department may obtain the electronic format for sending the customer data from the Department’s web site at www.floridarevenue.com or call the Department at (850)488-3516 to obtain the electronic format.
a. The written request should be forwarded to the Florida Department of Revenue, Account Management MS #1-5730, Florida Department of Revenue, 5050 W Tennessee Street, Tallahassee, Florida 32399-0160, along with an electronic file containing a list of the dealer’s regular customers for which the dealer has a Florida Consumer’s Certificate of Exemption number on file. In response to the request, the Department will issue to the selling dealer, using the same electronic medium, a list containing a unique vendor authorization number for each exempt entity who is a holder of a valid Florida Consumer’s Certificate of Exemption.
b. The Department’s online Certificate Verification System allows the user to verify up to five Florida Consumer’s Certificate numbers and to obtain a transaction authorization number for single sales made to each exempt entity at once. The system also allows the user to upload a batch file of up to 50,000 accounts for verification of a Florida Consumer’s Certificate of Exemption and, 24 hours later, retrieve the file containing the vendor authorization numbers for all sales made to an exempt entity during the calendar year.
4. The selling dealer may make tax-exempt sales to the exempt entity during the period in which the vendor authorization number for that entity is valid. Vendor authorization numbers are valid for the remainder of the calendar year during which they are issued. However, vendor authorization numbers issued by the Department in November or December are valid for the remainder of that calendar year and the next calendar year.
(4) Sales made directly to governmental units.
(a) Any state, or any county, municipality, or political subdivision of a state that holds a valid Consumer’s Certificate of Exemption (Form DR-14) issued by the Florida Department of Revenue may issue a copy of its certificate to the selling dealer to purchase or rent taxable items or services tax-exempt in lieu of paying sales tax. The United States Government is not required to hold a Consumer’s Certificate of Exemption to make tax-exempt purchases and rentals.
(b) Payment for tax-exempt purchases or rentals of property or services must be made directly to the selling dealer by the governmental unit of a state, or any county, municipality, or political subdivision of a state. Payments made with an authorized P-Card are considered to be made directly by the governmental unit. When the payment for taxable property or services is made with the personal funds of an authorized representative of the governmental unit, the purchase is subject to tax, even if the representative is subsequently reimbursed with the governmental unit’s funds. The authorized representative of any state, county, municipality, or political subdivision of a state, must choose one of the following methods to make tax-exempt purchases or rentals:
1. Use an authorized Purchasing or Procurement Card (“”P-Card””) which indicates on its face that it is a Florida government purchasing card for official business only. Information printed on the front of the card will include the agency’s name, the agency’s Consumer’s Certificate of Exemption number, the account number, the name of the cardholder (employee), and the expiration date. The selling dealer who accepts the “”P-Card”” should retain a copy of the face of the “”P-Card”” to note the Consumer’s Certificate of Exemption number, account number, and cardholder name for its books and records to properly document the exempt sale. When the selling dealer cannot copy the “”P-Card,”” the dealer must retain the Consumer’s Certificate of Exemption number, the account number, cardholder’s name, and the expiration date of the “”P-Card.””
2. Issue a certificate containing the governmental unit’s name, address, the Consumer’s Certificate of Exemption number, the effective date and expiration date of the Consumer’s Certificate of Exemption, and the signature of an authorized representative of the governmental unit. The following is a suggested format of the certificate:
EMPLOYER’S AUTHORIZATION TO MAKE
PURCHASES ON BEHALF OF AN EXEMPT GOVERNMENTAL UNIT
_____________________________
DATE
TO: