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Florida sales tax due on sales sourced to Florida

  • May 31, 2016 | Gail Cole

 Online business owes Florida sales tax on sales to out-of-state consumers.

Update, 6.6.2017: The Supreme Court of the United States declined to take on the case on February 21, 2017.

Update, 10.31.2016: American Business USA Corp. has submitted a petition for a writ of certiorari to the United States Supreme Court. A response is due November 28, 2016. Learn more.

According to the Florida Supreme Court, a business located in Florida has nexus in Florida and is required to collect Florida sales tax on orders even when the customers are located in other states, the orders are filled by florists in other states, and deliveries are to locations in other states.

This is significant in the world of sales tax.


American Business USA Corp.  is an online business incorporated in Florida, with a physical location and principal address in Florida. It does not have a retail store or maintain inventory in Florida, and all of its sales are initiated through its website and filled by local florists throughout the United States and abroad. Since American Business began operations in Florida in 2001, it has collected Florida sales tax on orders filled and delivered in Florida but not on orders filled and delivered out-of-state.

The Florida Department of Revenue audited American Business USA and found it liable for “taxes and interest” on sales of tangible personal property occurring between April 1, 2008 and March 31, 2011. The business protested and the case ended up before an administrative law judge, who upheld the department’s assessment.

The department based its tax assessment on Florida Statutes 212.05(1)(l), which states:

Florists located in this state are liable for sales tax on sales to retail customers regardless of where or by whom the items sold are to be delivered. Florists located in this state are not liable for sales tax on payments received from other florists for items delivered to customers in this state.

American Business argued that the Florida law violates the Commerce Clause of the United States Constitution.

Although the administrative law judge found in favor of the Florida Department of Revenue, the Fourth District Court of Appeal found in favor of American Business. The case then went before the Florida Supreme Court because the lower court declared a state statute invalid.

Supreme Court decision

The Supreme Court ruled, “We quash the decision of the Fourth District and hold section 212.05(1)(l) constitutional.” It upheld the constitutionality of the statute based on the following:

  • American Business has substantial nexus with Florida
  • The tax is fairly apportioned
  • The tax does not discriminate against interstate commerce
  • The tax is fairly related to the services provided by the state

The Court also noted that since American Business is located in Wellington, Florida, “It benefits from the public safety agencies of the state, as well as other infrastructure and public amenities paid for by the state. It benefits from the orderly, civilized society that is afforded it by the State of Florida. American Business has by its presence and transactions in Florida availed itself of the opportunities and protections made possible in part by the taxes imposed on its sales transactions. Thus, there is a reasonable relationship between the company’s presence and activities in the state and the tax at issue.”

For additional details, see Florida Department of Revenue vs. American Business USA Corp. (No. SC14-2404).


In upholding tax liability on sales sourced to Florida, this case could greatly impact the national discussion of remote sales tax. States could adopt origin-sourcing laws, taxing sales based on the location of the seller rather than the location of the consumer (destination-sourcing), as is more common.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.