By Madison Barnett and Prentiss Willson

The Florida Department of Revenue, adopting a recommended order of the Division of Administrative Hearings, ruled that a Georgia-based heavy equipment dealer had substantial nexus in Florida based on its delivery of equipment in company-owned trucks and its advertising in a Florida trade publication. The company’s contacts with Florida were limited to 116 sales over a three-year period (with only one sale in 2002), delivery of the equipment using company-owned trucks operated by company employees, its occasional pick-up of trade-in equipment, and its placement of advertisements in a Florida trade publication. The Department ruled that such physical presence was sufficient to create substantial nexus because it was “regular and substantial,” and “perhaps most significantly,” the company “deliberately and systematically targeted Florida customers in its advertising.” While the result may not be too surprising for the years where a large number of deliveries were made, one may question whether the ruling’s reliance on activities in later tax years (e.g., 2004) to create nexus for prior tax years (e.g., 2002, where a single delivery was made) is supportable. Rhinehart Equipment Co. v. Dep’t of Revenue, Dep’t of Rev. Final Order (Mar. 25, 2013).