Florida's Communications Services Tax

The 2001 law establishing the communications services tax was designed to restructure taxes on telecommunications, cable, direct-to-home satellite, and related services. The law replaced and consolidated several different state and local taxes with a single tax comprised of two parts: the Florida communications services tax and the local communications services tax.

Communications services include telecommunications, cable, direct-to-home satellite, and related services. This definition includes voice, data, audio, video, or any other information or signals, including cable services, transmitted by any medium.

Some examples of services subject to the tax are:

• Local, long distance, and toll telephone
• Cable television
• Direct-to-home satellite
• Mobile communications, including detailed billing charges
• Private line services
• Pager and beeper
• Telephone charges made by a hotel or motel
• Facsimiles (FAX), when not provided in the course of professional or advertising service
• Telex, telegram, and teletype

Dealers should not collect taxes on exempt sales of communications services. Exempt sales include:

• sales for resale
• sales to Federal agencies, the state, any county or municipality, or other political subdivision;
• sales to religious and educational organizations with 501(c)(3), I.R.C. status;
• sales to homes for the aged with 501(c)(3), I.R.C. status and that meet certain provisions.

Dealers must document the exempt sale as follows:

Residential telephone service is exempt from the state portion of the communications services tax. This service is subject to the state gross receipts and local portions of the tax. Mobile telephone, cable, and direct-to-home satellite services are fully taxable, even if provided to a residence.

A business that sells communications services, cable services, direct-to-home satellite services, or other related services must register as a dealer for communications services tax. You can register online, or fill out a paper Application to Collect and/or Report Tax in Florida (Form DR-1).

One registration is required for each legal entity, regardless of the number of locations.

As part of the registration process, dealers who collect local communications services tax must notify the Florida Department of Revenue (DOR) of the method they will use to assign addresses to the correct taxing jurisdiction. To notify us of a change in the method you will use to assign addresses, complete DR-700020, Notification of Method Employed to Determine Taxing Jurisdiction.

Direct Pay Permits - Self-accrual authority may be allowed to qualifying entities for one of two purposes. We may grant a direct pay permit for interstate communications services when the majority of the communications services used are for communications that originate outside of Florida and terminate within the state. A direct pay permit for tax due upon determination of use may be granted when the taxable status of sales of communications services will only be known upon use. To apply for a direct pay permit, complete Form DR-700030, Application for Self-Accrual Authority/Direct Pay Permit - Communications Services Tax.

The tax includes a state rate of 6.8 percent plus a gross receipts tax rate of 2.37 percent, for a combined state communications services tax rate of 9.17 percent. Each local taxing jurisdiction may add its own local tax rate on communications services.

Direct-to-home satellite services are taxed at a total rate of 13.17 percent. Local tax does not apply to these satellite services.

The state and gross receipts tax rates stay fairly constant. However, local tax rates can change frequently. A list of all the current and past local jurisdictional rates is available online. For a list of current rates only, download the Jurisdiction Rate Table.

For example:
Local, long distance, or toll telephone; mobile communications; private line services; pager and beeper; telephone charges made by a hotel or motel; fax; and telex, telegram, and teletype are taxed at a state rate of 6.8 percent plus 2.37 percent gross receipts tax plus applicable local tax. Residential telephone services other than mobile services are exempt from the state rate, but not gross receipts tax or the local rates.

Cable service is taxed at a state rate of 6.8 percent plus 2.37 percent gross receipts tax plus applicable local tax. There is no residential exemption.

Direct-to-home satellite is taxed at 10.8 percent plus 2.37 percent gross receipts tax for a total of 13.17 percent. There is no local tax and no residential exemption.

Pay tax to DOR with the Communications Services Tax Return (Form DR-700016). Returns and payments are due on the 1st and late after the 20th day of the month following each collection period. Returns must be filed, even if no tax is due. We encourage you to file using an electronic method to ensure quick, efficient, and accurate processing.

Depending on the method selected to assign addresses to the appropriate taxing jurisdiction, two different collection allowances are available. A dealer using one or more of the following methods to ensure proper address-to-jurisdiction assignment for purposes of collecting local communications services tax will be granted an allowance of .75 percent (.0075) of the total tax due:

• Using an address database provided by us to verify the accurate assignment of customer addresses to tax jurisdictions.
• Using a database developed by the dealer that has been certified by us to verify the accurate assignment of customer addresses to tax jurisdictions.
• Using a DOR-certified database supplied by a vendor to verify the accurate assignment of customer addresses to tax jurisdictions.
• Using ZIP+4 and matching an address to its specific tax jurisdiction.

If none of these methods are used to ensure proper address-to-jurisdiction assignment, a collection allowance of .25 (.0025) percent will be granted.

Direct-to-home satellite service providers receive the .75 (.0075) percent collection allowance.

The DOR Address/Jurisdiction Database identifies the local taxing jurisdiction for addresses in Florida. The database is based on information provided by local taxing jurisdictions and is updated every six months.

Using the Address Lookup Page:

• The public can look up an address and verify the communications services tax rates and applicable taxing jurisdictions. (No user registration is required.)
• Communications services tax dealers can download the entire address database by state or county. (User registration is required.)
• Local governments can download the address database by state or county. Local governments can also request changes to the database. (User registration is required.)

Dealer or vendor databases can be certified by us for their accuracy of assignment of street addresses to the proper jurisdiction. An accuracy rate of 95 percent at a 95 percent level of confidence based on the geographic area within Florida covered by the database is required for certification. Dealers or database vendors can request database certification by filing an Application for Certification of Communications Services Database (DR-700012).

The communications services tax has an annual resale certificate separate from the one issued for sales and use tax. Once registered, dealers will be sent an Annual Resale Certificate for Communications Services Tax (Form DR-700015). This certificate is used for the tax-exempt purchases of communications services to be resold. Each active dealer will be sent a new annual resale certificate each year. An Annual Resale Certificate for Communications Services Tax cannot be used for sales tax purposes.

Selling dealers must document all exempt sales for resale. Selling dealers can document an exempt sale by obtaining a copy of the purchaser's annual resale certificate or using the telephone or online verification system. When a selling dealer obtains a signed resale certificate, additional sales during the year to the same purchaser do not require a new certificate. If the purchaser buys on account on a continual basis, the selling dealer needs to obtain a certificate valid at the time of purchase, but does not need to obtain a new certificate each year. If the purchaser knows their communications services tax certificate/business partner number, the selling dealer can obtain a Transaction Resale Authorization Number by telephone or online at the point of sale. Selling dealers can call the toll-free number at 877-FL-RESALE (877-357-3725) and select the option for communications services tax. Or, selling dealers may use the online verification system. Dealers can enter up to five certificate/business partner numbers. The Transaction Resale Authorization Number received by phone or online is valid for that transaction only. If a purchaser has already provided a copy of their resale certificate, selling dealers can obtain a unique Vendor Resale Authorization Number by using the online certificate verification system. Dealers may upload a batch file of up to 50,000 accounts and receive a Vendor Authorization Number for each the next day. Vendor Authorization Numbers are valid for sales to each purchaser during the calendar year. For more information, see TIP 07A19-05 available on our Internet site.

Dealers must itemize and separately state taxes on customer's bills. The taxes must be identified as Florida communications services tax and local communications services tax, respectively.

Consumers who purchase taxable communications services from a seller that does not collect tax must report and pay use tax. Complete Form DR-700019, Communications Services Use Tax Return.

Tax Laws - Call Taxpayer Services to request a copy of Chapter 202, Florida Statutes, Communications Services Tax Simplification Law and Rule Chapter 12A-19, Florida Administrative Code, Communications Services Tax. Tax laws are available online in the Florida Tax Law Library.