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Florida Association of Attorney-CPAs Files Amicus Curiae Brief in Florida Supreme Court Sales Tax Case

from AAA-CPA

The Florida Association of Attorney-CPAs has filed an amicus curiae brief in Florida Department of Revenue v. American Business USA Corp Florida. James Sutton, CPA, Esq., of Moffa, Gainor & Sutton, P.A. is the lead counsel. The taxpayer in this case is an online florist with no inventory of flowers. The company merely takes orders online and relays the flower orders to florists all over the world for them to fill and deliver.

The taxpayer collected sales tax on flowers delivered in Florida, but not for sales delivered by florists outside of Florida. Upon audit, the Florida Department of Revenue assessed more than $100,000 of sales tax under the theory that the taxpayer was a florist and should have collected tax on all out-of-state sales.

Under Florida law, all sales made by a Florida florist are subject to Florida sales tax, regardless of where the flowers are being delivered. This is commonly known as the origin method of sales tax sourcing, and 36 other states have similar sourcing laws for florists. However, this method is very different from the method used by virtually all other industries, where the destination state taxes the transaction. This is called the destination method.

The fourth DCA held that Florida's special sourcing rule on florists is unconstitutional under the Commerce Clause of the U.S. Constitution because it taxes transactions that are completed entirely by out-of-state florists. The Department of Revenue appealed. The Florida Association of Attorney-CPAs, together with the AAA-CPAs, filed the amicus curiae brief in support of the taxpayer, upholding the fourth DCA opinion. The amicus brief states that Florida's law violates the Commerce Clause because the regulation of interstate commerce is squarely within the domain of the federal government. Alternatively, the brief hinted that perhaps the court should consider the taxpayer as something other than a florist since the taxpayer never owns flowers. Such holding would cause the taxpayer to fall under the normal destination sourcing rules. A destination sourcing resolution would make the constitutional challenge moot as to the appellee, and the sales tax would not apply.

Nick Lioce, past chair of the tax section, is current president of the Florida Association of Attorney-CPAs. All members of the Florida Association of Attorney-CPAs are members of the AAA-CPA. Regular members must currently be, or have previously been, both attorneys and CPAs. Affiliates of these organizations may be either attorneys or CPAs who have one other credential from a specified list of credentials. For information about membership or Affiliate status, telephone Kimmy Livingston at 1-888-ATTY-CPA. For information on the amicus curiae brief, contact James Sutton, CPA, Esq., of Moffa, Gainor & Sutton, P.A. at or Sydney S. Traum, Esq., of Law Offices of Sydney S. Traum P.A. at more

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