The temporary sales tax exemption applies to qualifying items sold under a “buy one, get one free” or “buy one, get one for a reduced price” deal only if the total price of two items is under the sales tax holiday price cap.
Per the Florida Department of Revenue, “The total price of items advertised as ‘buy one, get one free’ or ‘buy one, get one for a reduced price’ cannot be averaged in order for both items to qualify for the exemption.”
Qualifying items purchased with a gift card during a sales tax holiday qualify for the temporary sales tax exemption regardless of when the gift card itself was purchased.
However, should a gift card purchased during a Florida sales tax holiday be used to buy qualifying items after the conclusion of a sales tax holiday, Florida sales tax would apply to the sale.
Gift cards themselves aren’t subject to Florida sales tax.
It depends.
Manufacturer’s coupons, discounts, and rebates don’t reduce the sales price of an item during a sales tax holiday because the retailer is reimbursed for the amount of the discount provided to the customer. So, if the item qualifies for a sales tax holiday before a manufacturer’s coupon, discount, or rebate is applied, it would qualify for the temporary sales tax exemption. If it doesn’t, it wouldn’t.
Store coupons, discounts, and rebates do reduce the amount received by the retailer. So, if a store coupon, discount, or rebate brings an otherwise eligible item under a sales tax holiday price cap for that item, the sale would qualify for the temporary sales tax exemption.
If all items sold as a bundled transaction or set are eligible for a Florida sales tax holiday and meet the price cap, items sold as a unit or bundled together would qualify for the temporary sales tax exemption.
But if just one item of a set or bundled transaction isn’t eligible for the sales tax holiday, the set or unit would be subject to sales tax. And if two qualifying items sold as a set exceed the price cap, they can’t be unbundled.
The Department of Revenue provides this example, apropos of the Freedom Month sales tax holiday: “A pair of water skis normally sells for $300. The pair of skis cannot be split in order to sell each ski for $150 to qualify for the exemption.”
When an eligible item purchased during a sales tax holiday is exchanged after the tax-free period, no sales tax is due so long as the exchange is for the same item in a different size or color.
Yet if the customer returns an eligible item purchased during a sales tax holiday and receives credit toward the purchase of a different item that didn’t qualify for the temporary exemption, the new item would be subject to Florida sales tax.
If a customer returns a qualifying item purchased during a sales tax holiday and requests a sales tax refund or credit:
- The customer must produce a receipt or invoice showing that sales tax was charged and paid, or
- The retailer must have documents proving tax was paid on the original purchase
Qualifying items purchased on layaway are eligible for the temporary sales tax exemption provided by a sales tax holiday so long as the customer either:
- Accepts delivery of the merchandise during the sales tax holiday period, or
- Puts an eligible item on layaway during the sales tax holiday, even if the final payment is made after the conclusion of the tax-free period
Under Rule 12A-1.045 of the Florida Administrative Code, shipping and delivery (i.e., transportation) charges that are included in the sales price of taxable goods are subject to sales tax, while shipping and delivery charges included in the sales price of exempt goods are sales tax exempt.
Separately stated transportation charges aren’t subject to Florida sales tax so long as the consumer has the ability to avoid the charges. Otherwise, if the shipping charges are separately stated, they must be proportionately allocated to each item. This can impact the sales price of each item, pushing it above a sales tax holiday price cap.
The amount of the shipping charge applicable to each item is calculated by multiplying the total shipping charge by the percentage of cost for each item.
If you’re registered for Florida sales tax and sell items that are eligible for a Florida sales tax holiday, you need to be ready to exempt qualifying sales. If you sell items qualifying for the disaster preparedness sales tax holiday that starts June 1, you don’t have much time.
Automating sales tax calculation, collection, and remittance can reduce the compliance burdens stemming from sales tax holidays. Learn more about sales tax automation.
