Are drop-shipments subject to sales tax?

No sales tax will be due when the sale meets the following conditions:
  • both the buyer and the seller are located outside Florida; and
  • the property, at the time of sale, is outside Florida; and
  • the seller ships the goods from a point outside Florida by common carrier to the buyer's customer.
The only tax applicable would be the Florida use tax, which may be imposed on the buyer's customer in Florida, provided the Florida customer is not a reseller of the goods, or otherwise exempt.

Sales tax will be due when:
  • the goods are drop-shipped to the dealer's Florida customer from the seller's facility in Florida;
  • the goods are drop-shipped to the Florida customer from the seller's facility outside Florida, but the seller uses its own transportation;
  • the goods are drop-shipped from the seller's facility outside Florida, but the terms of the delivery require the drop-shipper to collect the sales price from the Florida customer; or
  • the seller is a Florida Manufacturer. The seller is required by rule to collect tax from the buyer, because the buyer is an unregistered out-of-state dealer that is unable to furnish a Florida Annual Resale Certificate for Sales Tax.
To learn more about Florida Sales and Use Tax, visit the Department’s Florida Sales and Use Tax webpage.

References: Sections 212.02(14)(a), 212.05, 212.06(1)(a), (3)(a), and 212.07(1)(b), Florida Statutes
Category: General Tax
Sub-Category: Sales & Use Tax
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