Florida: Electronic provision of information not subject to sales or use tax

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The Florida Department of Revenue has released Technical Assistance Advisement 17A-002 addressing the taxability of a firm’s electronic provision of information and reports. Because the services that the Taxpayer provides are not considered to be sales of “tangible personal property,” they are not subject to Florida’s sales and use tax.


In its petition for an advisement from the department, the Taxpayer explained that it is a data analytics company that collects information that its customers’ web visitors provide by way of online consumer surveys. For example, a survey could ask a web visitor to rate how well the product images on the customer’s website showed the product details, or how well the site layout helped the online consumer find what he was looking for.

The Taxpayer customizes the survey and delivers it to the customer, which then puts the survey on its own website. Web visitors who click on the survey link are routed to the Taxpayer’s servers located outside of Florida; once there is enough data, the Taxpayer compiles it and publishes the resulting reports to the customer’s portal site, which the Taxpayer hosts. The Taxpayer’s customers have log-in access to the data compiled on their behalf, which becomes their property. The Taxpayer is contractually prohibited from providing this information to others.

Beyond this, the Taxpayer offers other information services that help its customers assess the effectiveness of their web presence, such as the following:

  • The ability to generate reports showing the amount of time a consumer spent on the customer’s site, the page names the customer visited, navigation through the pages viewed, information entered, scrolling, mouse clicks, and movements.
  • Expert analysis of the least usable features of the customer’s web or mobile site.
  • Benchmark analyses comparing the customer’s survey results to those of industry competitors, the data for which the Taxpayer obtains from a third party.


The department’s conclusion that the Taxpayer’s provision of services is not subject to the state’s sales and use tax is based on the definition of “tangible personal property.” Citing 1993 case law, the department acknowledged that the “furnishing [of] information by way of electronic images which appear on the subscriber’s video display screen does not constitute a sale of tangible personal property[,] nor does it constitute the sale of a taxable information service.”

Automation creating many questions, and novel solutions, throughout the country

Whether an electronically provided service constitutes a taxable event is just one question that faces stakeholders these days. Another issue, in relatively unexplored context, is the city of San Francisco’s consideration of an “automation tax,” also known as a “robot tax.” In a piece titled Can a ‘Robot Tax’ Solve Automation’s Job-Killing?, Dice, a talent recruitment site, described Microsoft founder Bill Gates’ idea to tax the robots that replace humans: “such a tariff would help society to smooth the harsher aspects of a broad transition to automation; humans could then focus on tasks that demand human creativity and empathy, such as caring for the elderly and children.”

In principle, the CEO of Tesla, Elon Musk, is on board, though he might even take it a step further. At the World Government Summit in Dubai, Musk said:

There will be fewer and fewer jobs that a robot cannot do better…And if my assessment is correct and they probably will happen, then we have to think about what are we going to do about it? I think some kind of universal basic income is going to be necessary…Almost everything will get very cheap. I think we’ll end up doing universal basic income. It’s going to be necessary. The much harder challenge is, how are people going to have meaning?

Referring to Bill Gates’ idea, San Francisco Board of Supervisors member Jane Kim called for a hearing on the topic at the March 14, 2017 meeting, reported the San Francisco Examiner. Her concern is the growing wealth and income gap, caused in part by the arrival of “the long predicted era of robots and automation replacing human workers…We are finding that robots have begun to destroy millions of American jobs…[and] we need to ensure that the massive new wealth created by automation is redirected to investing in education and training displaced workers for the jobs of the future.”

The hearing that Kim is calling for would examine “an ongoing tax on every machine that replaces a human.” 

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