Sales and Use Tax on Vending Machines

What owners and operators of coin-operated vending machines need to know.

Definitions

Dealer

Anyone registered to collect and remit sales tax to the State of Florida.

License

The privilege to use real property or tangible personal property for any lawful purpose.

Operator

Anyone who possesses a coin-operated vending machine for the purpose of generating sales through that machine, maintains the inventory in that machine, and is responsible for removing the receipts from that machine.

Owner/Lessor

The owner of the real property or owner of the vending machine who leases to an operator.

Real Property

The surface land, improvements thereto, and fixtures; also called "realty" and "real estate."

Tangible personal property

Property that may be seen, weighed, measured, touched, or is in any manner perceptible to the senses. Tangible personal property should not be confused with "real property."

Vending machine

A machine operated by coin, currency, credit card, slug, token, coupon or similar device, which dispenses food, beverages, or other items of tangible personal property.

What is Taxable?

Sales

Sales of food, beverages, and other tangible items are taxable when made through vending machines or devices dispensing taxable merchandise having a sales price of 10 cents or more. The rate is 6 percent plus any locally imposed taxes (discretionary sales surtaxes).

"Food and beverages" include milk, natural juice, food, gum, candy, hot chocolate, coffee, soft drinks, and tea. "Other tangible items" include, but are not limited to, tobacco, toys, baseball cards, prepaid telephone calling cards, laundry supplies, and sundries.

Machine Rental

The lease or license to use a vending machine is taxable. The tax is collected by the machine owner (lessor) from the operator (lessee) and is based on the lease amount.

Real Property Rental

If the machine owner is also the operator and places the machine at another person’s location, the arrangement between the operator and the location owner is a taxable lease or license to use real property. The tax is collected by the location owner (lessor) from the machine operator (lessee) and is based on the commission payment to the location owner (lessor).

What is Exempt?

Churches

Receipts from vending machines operated by churches are not taxable.

Schools

Food and beverages sold or dispensed through vending machines located in a student lunchroom, student dining room, or other area designated for student dining in schools offering grades K through 12 are exempt. Food and beverages sold through vending machines in a gymnasium, shop, teacher’s lounge, corridor, or other area accessible to the general public and not specifically designated for student dining are subject to tax. PTAs and PTOs (in schools offering grades K through 12 only) that sell food or beverages through vending machines must choose to pay tax to their suppliers or remit tax on the sales.

Charitable Organizations

Food and drinks sold for 25 cents or less through a coin-operated vending machine sponsored by a charitable organization qualified under sections 501(c)(3) or 501(c)(4), Internal Revenue Code, are exempt.

How is Tax Calculated?

1. Dividing the gross receipts from the machine by a divisor (see table) to compute taxable sales.
2. Subtracting taxable sales from gross receipts to arrive at the amount of tax due.

Who Must Register to Collect Tax?

The machine operator is responsible for remitting tax on the gross receipts from the machine. Owners leasing a machine to an operator are required to register and collect sales tax from the operator on the lease payments they receive. A location owner who is not already registered for some other purpose is required to register and collect sales tax on the commission or fee received from the operator.

However, a machine operator who has a direct pay permit from the Department of Revenue can self-accrue and remit the tax due on the commission, license fee, or rent paid to the location owner for the lease or license to use real property. This relieves the location owner of the obligation to collect tax. To apply for a permit, submit Form DR-16A, Application for Self-Accrual Authority/Direct Pay Permit - Sales and Use Tax. See "For Information and Forms" on the back panel to obtain this form.

How Do I Register?

You can register to collect and/or report tax via the Department’s Internet site. Go to www.myflorida.com/dor and click on e-Services. If you do not have Internet access, you can complete a paper Application to Collect and/or Report Tax in Florida (Form DR-1). To obtain this form, see "For Information and Forms" on the back panel.

Owners or operators with machines in several counties need a separate registration for each county in which their machines are located. If all the machines are located in one county, one registration is sufficient.

When is Tax Due?

Returns and payments are due on the 1st and late after the 20th day of the month following the month the receipts are removed from the machine. For example, if the receipts are removed on the 1st of one month, then tax is not due until the 1st of the next month.

Returns and payments postmarked after the 20th are late. However, if the 20th falls on a Saturday, Sunday, or federal or state holiday, returns will not be considered late if they are postmarked on the first business day following the 20th.

Notice Requirements

A notice must be displayed on the upper front, or where it is easily readable by the public, of food or beverage vending machine.

A penalty of $250 per machine, plus interest, will be charged for failure to display the required notice.

The notice must state the operator’s name, address, and federal employer identification (FEI) number. If the federal government does not require the operator to have an FEI number, the sales tax registration number is required.

The wording on the notice must be the same as provided in the example below. The type must not be smaller than 14 point bold face, and the words "cash reward" must not be smaller than 30 point. Churches are exempt from this requirement.

Reference Material

Tax Laws

Call Taxpayer Services to request a copy of Rule 12A-1.044, Florida Administrative Code, Vending Machines. Tax laws are also available on the Department's Internet site. Look for the Florida Tax Law Library.

Brochures

The following brochures are available from your local DOR service center, the DOR Distribution Center, or Taxpayer Services:

• Tangible Personal Property Rentals
• Commercial Real Property Rentals
• Amusement Machines
• Concession Stands
• Discretionary Sales Surtax

For Information and Forms

Persons with hearing or speech impairments may call the TDD at 800-367-8331 or 850-922-1115.

• Order multiple copies of forms from our Internet site, or
• Mail form requests to:
  Distribution Center
  Florida Department of Revenue
  168A Blountstown Hwy
  Tallahassee FL 32304-3761