Ervin, Richard W.

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Comment on Sales Tax

University of Miami School of Law

University of Miami Law SchoolInstitutional RepositoryUniversity of Miami Law Review12-1-1949Comment on Sales TaxRichard W. ErvinFollow this and additional works at: http://repository.law.miami.edu/umlrThis Article is brought to you for free and open access by Institutional Repository. It has been accepted for inclusion in University of Miami LawReview by an authorized administrator of Institutional Repository. For more information, please contact library@law.miami.edu.Recommended CitationRichard W. Ervin, Comment on Sales Tax, 4 U. Miami L. Rev. 32 (1949)Available at: http://repository.law.miami.edu/umlr/vol4/iss1/7COMMENT ON SALES TAX*RICHARD W. ERVIN **The legislature of this state, at its extraordinary session in 1949, enactedchapter 26319, laws of Florida, acts of 1949, therein designated as the "FloridaRevenue Act of 1949" and now referred to generally as the "Florida Sales TaxAct." As used in the enactment the term "sale" means any transfer of title orpossession or both, exchange, barter, lease or rental (conditional or otherwise),in any manner or by any means whatsoever of tangible personal property for aconsideration (Section 2(b) of the act). The said term includes the rental ofliving quarters, sleeping or housekeeping accommodations in hotels, apartmenthouses or rooming houses, tourist or trailer camps, for less than six months.From these observations it is noted that the enactment includes not only salesof tangible personal property but also the use thereof as well as certain trans-actions in connection therewith; in other words, we have a limited sales, use andtransaction tax. A review of the authorities shows that courts have designatedsales taxes as license taxes, privilege taxes, occupational taxes and excise taxes(47 Am. Jur. 196, section 2 and authorities there cited). The legislature ofFlorida seems to have intended said chapter as an excise tar when it recited(see sections 3, 4 and 5 of said act) "that it is hereby declared to be the leg-islative intent that every person is exercising a taxable privilege who engagesin" (the businesses described in said sections 3, 4 and 5). Although the amountof the tax is measured by the quantity of the merchandise or services handled,and the rate is based upon the compensati6n to be paid for the merchandise orservices, these are administrative features which do not take the tax out ofthe category of an excise tax on business engaged in within the state (seeSmith v. City of Miami, 160 Fla. 306, 34 So. 2d 544, text 548 and 549). Theview seems to be almost uniform that taxes of the nature of those imposed bysaid chapter 26319 are not property taxes but excise taxes (47 Am. Jur. 197,section 2). Such taxes have usually been upheld against the contention thatthey violate constitutional provisions (47 Am. Jur. 199, section 4 and authoritiesthere cited) for which reason we shall presume that said chapter 26319 isconstitutional in most if not all of its provisions and impositions of taxes.The said Florida Revenue Act of 1949 levies excise taxes against those en-* This short commentary is presented in answer to requests that some information bepresented to the bar concerning the Florida Sales Tax Act. Though not intended as acomplete article, the staff felt that it would serve as an aid in familiarizing the membersof the bar with the phraseology of the act as well as a few of the problems which mayarise under this act,** Attorney General, State of Florida.COMMENT OAT SALES TAXgaging in the business (1) of operating hotels, apartment houses, roominghouses and tourist and trailer camps where living quarters or sleeping or house-keeping accommodations are rented, leased or let to persons residing therein forperiods of less than six months (section 3 of act) ; (2) of selling admissions toplaces of amusement, including admissions to theatres, outdoor theatres, shows,exhibitions, games, races and similar places of amusement, where the price ofadmission is forty-one cents or more exclusive of federal taxes (section 4 ofthe act) ; (3) of selling tangible personal property at retail in this state, orrenting, leasing or otherwise furnishing such personal property for a considera-tion to others (section 5 of the act). Reference is made to said sections 3, 4, and5, for more particulars as to what is taxed by the act.The rate of taxation in all three of the above classes is three per cent of thecompensation received; however the act provides that notwithstanding suchrate of taxes, in order to avoid fractions of pennies, the following brackets areapplicable to such taxable transactions:(1) On single sales of less than 9e no amount shall be added for taxes.(2) On single sales in amounts from 9# to 40t, both inclusive, 1 shallbe added for taxes.(3) On sales in amounts from 41t to 70#, both inclusive, 2t shall beadded for taxes.(4) On sales in amounts from 71 to $1.00, both inclusive, 3t shall beadded for taxes.(5) On sales in amounts of more than $1.00, 3% shall be charged uponeach dollar or price, plus the above bracket charges upon any fractionalpart of a dollar in excess of even dollars.Single sales are to be considered as the total sales of tangible personalproperty, admissions or rentals made to a customer or combination ofcustomers at any one time, inclusive of total sales made on any one visit toa place of sale.The statute requires that the dealer or other person paying the sales taxpass it on to the purchaser, user or lessee of the property or services (section7 of the act) and the use of tokens in connection with the payment and collectionof the tax is expressly prohibited by the statute (section 18 of the act). Whereproperty is purchased by tradeins, exchanges and the like the difference betweenthe value of the property acquired and that given as a tradein or in exchangeis subject to the sales tax (section 9 of the act). Passes granting free admissionto places of amusement are subject to the sales tax on the basis of the pricecharged for like or similar admissions to the place of amusement. Municipalitiesare prohibited by section 4 of the act from levying an excise tax on amusementadmissions.The following properties, services and things appear, from the act, to beMIAMI LAW QUARTERLYexempt from taxation, such exemptions except where otherwise expressly in-dicated being allowed under section 8 of the act:Admissions to places of amusement operating under the supervision of thestate racing commission (this does not extend to other admissions) ; admis-sions to other places of amusement where the price of the admission is less thanforty-one cents, exclusive of federal taxes (Sec. 4); advertising (see radiostations) ; agricultural motor propelled equipment (see motor vehicles);alcoholic beverages, including beer; artificial eyes; artificial limbs; beer (seealcoholic beverages; books, school; bread (see general groceries) ; butter (seegeneral groceries) ; canned foods (see general groceries) ; (carbonated wateris not exempt, see waterl ; caskets, when the sales price is less than five hundreddollars; cereals and cereal products (see general groceries) ; charitable institu-tions (see churches) ; cheesecloth, when used for shading tobacco; churches,or other religious, educational or charitable institutions, articles sold or leasedto or by, in the course of their customary religious, educational or charitableactivities. No tax is levied by the act upon shows, pageants and plays wherethe entire proceeds are to be used solely by a religious, educational or charitableinstitution (Sees. 4 and 6) ; cigarettes; clothing, including shoes, hats and un-derwear, where the price at which the same is sold is ten dollars or less, on anysingle item thereof; provided, that sales of articles of clothing ordinarily soldor offered for sale in a pair, or as a suit or ensemble, shall be considered assingle items under this exemption, provided fabrics by the yard classified aswearing apparel fabrics shall be included in the term articles of clothing; coal;cocoa (see general groceries) ; coffee and coffee substitutes (see generalgroceries) ; coffins, when the sale price is less than five hundred dollars;coke (see fuels) ; common household remedies (see medicines) ; com-tunication services; containers used for processing farm products; cord-wood (see fuels) ; crude oil (see fuels) ; crutches; cultivating machinery (seemachines and equipment) ; dentures; diesel oil (see fuels) ; detergents (seesoap) ; educational institutions (see churches) ; eggs (see general groceries) ;electric power and energy; eyes, artificial; eye glasses; farmers, produce andlivestock raised and sold by section 7; fabrics for clothing (see clothing) ; feeds;fertilizers; field seeds; film rentals; fish and fish products (see general gro-ceries) ; fish nets and other equipment (see ships, nets, etc.) ; flour (see generalgroceries) ; foods and food products (see general groceries) ; fruit and fruitproducts, including fruit juices (see general groceries) ; fuels, including crudeoil, fuel oil, gasoline, kerosene, naphtha, lubricating oil, diesel oil, coal, coke andcordwood; fuel oil (see fuels) ; fungicides; garden seeds; gas (natural, lique-fied and artificial) ; gasoline (see fuels) ; general groceries, including particu-larly, food and food products; food products as used herein shall mean andinclude cereal and cereal products, milk and milk products, oleomargarine,meat and meat products, fish and fish products, fruit and fruit products, spices,COMMENT ON SALES TAXsalt, sugar, coffee and coffee substitutes, teas and cocoa, but shall not includemeals served on or off the premises of the dealer, or drinks or foods furnished,prepared or served for consumption at tables,chairs, or counters,or from trays,glasses, dishes or other table ware, provided by the dealer, or served in restau-rants, drug stores, cafeterias, hotels or like places of business, milk, butter,eggs, meat (fresh, cured and salt), flour, meal, cereals, bread, vegetables andvegetable juices, fruit and fruit juices and canned foods. (General groceriesdoes not include gum and soft drinks, or articles that are not edible) ; glasses,eye; governmental units (state and federal) all sales made to or by, and allsales made to or by the United States Government, the State of Florida, or anycounty or municipality within the State, including sales made to contractors oftangible personal property going into and becoming a part of public works andprojects owned by any such government or governmental unit; (gum is not ex-empt, see general groceries); harvesting machinery (see machines andequipment) ; hats (see clothing) ; hearing devices; ice; insecticides; insuranceservice transactions (see service transactions) ; kerosene (see fuels) ; limbs,artificial; lubricating oils (see fuels) ; lunches, school; medicines, compoundedin a retail establishment by a pharmacist licensed by the State of Florida accord-ing to an individual prescription or prescriptions written by a practitioner ofthe healing arts licensed by the State of Florida, and common household medic-inal remedies recommended and generally sold for the relief of pain, ailment,distress and disorders of the human body according to a list prescribed andapproved by the State Board of Health which said list shall be certified to thecomptroller and from time to time be included in the rules and regulations pre-scribed by the comptroller; (mineral water is not exempt, see water) ; motionpicture film, rental of the established businesses (sec. 5) ; motor vehicles, andmotor propelled agricultural equipment, but not including parts thereof whensold as separate transactions; naphtha (see fuels) ; nets used for fishing (seeships, nets, etc.) ; newspapers; oleomargarine (see general groceries) ; ortho-pedic appliances; personal service transactions (see service transactions);prosthetic appliances; planting machinery and equipment (see machinery andequipment); plowing machinery and equipment (see machinery and equip-ment) ; professional service transactions (see service transactions) ; radiostations, all charges for services rendered by, including advertising, line charges,talent fees or charges, and charges for all services of every kind, character anddescription made by radio stations doing business in the State of Florida; re-ligious institutions (see churches) ; salt (see general groceries) ; school booksand school lunches; service transactions, professional, insurance and personal,which involve sales as inconsequential elements for which no separate chargesare made; ships, nets and other equipment used directly in and by licensedcommercial fisheries and fishermen; shoes (see clothing) ; (soft drinks are not36 MIAMI LAW QUARTERLYexempt, see general groceries) ; soap and soap powders and detergents; spices(see general groceries) ; sugar (see general groceries) ; suits (see clothing) ;teas (see general groceries) ; underwear (see clothing) water, not exemptingmineral water and carbonated water, or any water put up in bottles, jugs orother containers ; wearing apparel (see clothing).The above list of articles entitled to exemption tinder the Florida RevenueAct of 1949 is not intended as exhaustive but is only intended to embrace amajority of such articles.

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