TRALA Seeks to Preserve Up-Front Sales Tax Payment Option in Florida

TRALA is seeking an amendment to Streamlined Sales and Use Tax Agreement (SSUTA) legislation in Florida that would ensure that the current option for lessors to elect to pay sales tax at the time of vehicle registration is retained.  Though the main purpose of the bill is to adopt SSUTA, some TRALA members have expressed concern that the bill, as currently written, would strike the existing provision in Florida law that allows leasing companies to pay sales tax at the time of registration.

Under Florida law, electing to pay sales tax up front reduces the tax burden on monthly lease payments. TRALA feels that it should be possible to effectively implement SSUTA while still allowing lessors to elect to pay sales tax upfront. TRALA sent a letter to the bill's sponsor to request an amendment that would preserve the ability for lessors to elect to pay sales tax upfront. As the letter explains, "Many TRALA members opt to pay sales tax upfront and then capitalize the entire cost to purchase the truck (including the sales tax), because this typically results in a lower lease rate for their small business customers."
TRALA's letter also asks that in addition to preserving the option for lessors to pay sales tax up front, the legislature consider making one further amendment. TRALA understands that because of the way the existing law is written, the Florida Department of Revenue (DOR) has interpreted the law to state that if a lessor elects to pay sales tax upfront, only the first lessee will have tax-free lease payments, and any subsequent lease will be subject to tax. This interpretation could be seen as double taxation that negatively impacts Florida small businesses operating leased trucks, since the same tax would be paid twice for the same truck.
TRALA believes that preserving the ability for lessors to elect to pay sales tax up front, and eliminating the situation of double taxation when such trucks are subsequently leased to a second business, will benefit Florida small businesses and have a positive effect on the State's economy.
To see a copy of TRALA's letter to the bill's sponsor, click here. To see a copy of HB 217, click here. For questions, please contact TRALA's Joe Sculley at or by calling (703) 299-9120.