TAXATION RULING NO. ST 2180

ST 2180

SALES TAX : FLORAL TRIBUTES

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FOI status:

May be releasedFOI number: I 1199649

PREAMBLE

Sub-item 21(3) in the First Schedule to the Sales Tax (Exemptions and Classifications) Act exempts from sales tax flora which has not been subject to any process or treatment resulting in an alteration in its form, nature or condition. Exemption under sub-item 21(3) applies only to Australian flora.

2. Imported flora is taxable at the general rate of 20%. Sub-item 137(2) in the First Schedule exempts floral tributes (including bouquets, posies, floral baskets and sheaves) containing natural flowers. Sub-item 137(2) does not distinguish between Australian and imported floral tributes.

3. Although imported flowers are taxable the sales tax law allows otherwise taxable goods to be purchased or imported free of tax by a manufacturer, where they are to be used in, wrought into, or attached to so as to form part of exempt goods to be manufactured by that person. A floral tribute involves manufacture for sales tax purposes. Imported flowers which are to form part of a floral tribute exempted by sub-item 137(2) may be acquired free of sales tax by a registered manufacturer by the quotation of a certificate of registration or by an unregistered manufacturer through the operation of item 113 in the First Schedule which exempts from sales tax materials imported by an unregistered manufacturer for use in the manufacture of goods covered by an item in the First Schedule other than items 100 and 103.

4. The exemption for floral tributes is not limited to the kinds of arrangements named in the brackets in sub-item 137(2). It extends to other arrangements that meet the description of floral tributes.

FACTS

5. Flowers are sold in a variety of ways. They may be sold singly or in bunches. Single flowers are commonly sold in a clear plastic cylinder or box. Bunches of flowers are available wrapped in tissue paper or cellophane, in a box or in a vase, oasis or o-bowl. The arrangement of flowers in a vase, oasis or o-bowl may involve fixing the flowers in a medium such as oasis foam, sand, plasticine or wire. Any flowers that have weak stems are wired. Flowers may also be placed in a vase of water for sale without any fixing. Dried or artificial flowers may also be included in any of these natural flower arrangements.

RULING

6. Sub-item 137(2) exempts floral tributes, not flora. In referring to floral tributes, sub-item 137(2) contemplates something other than mere flowers - i.e. it refers to something made out of flowers but which has a commercial identity of its own. That something would not be covered by sub-item 21(3) because it has lost its identity as flora.

7. The preparation of a floral arrangement in a vase, oasis or o-bowl where the flowers are fixed in a manner described in paragraph 5 is accepted as the manufacture of a floral tribute. Provided the floral tribute consists primarily and principally of fresh flowers it will be exempt from sales tax under sub-item 137(2). Imported flowers to be used in the manufacture of a floral tribute of this nature may be acquired free of sales tax either by quotation of certificate or under item 113.

8. The placing of flowers in a vase of water without any fixing, however, is not accepted as the manufacture of a floral tribute. Nor is the placing of a single flower in a specimen vase. Nor is the tying up and selling of bunches of flowers or selling individual flowers in cylinders or boxes. Imported flowers for sale in bunches or as individual flowers, however packaged, retain their identity as imported flowers and are taxable. Australian flowers sold in these circumstances remain exempt under sub-item 21(3).

9. Sub-item 137(2) is concerned with floral tributes containing natural flowers. Dried or artificial flower arrangements are not covered by sub-item 137(2) even where they contain some natural flowers. However, a floral tribute which consists primarily and principally of fresh flowers will remain exempt from tax notwithstanding that it also contains some artificial or dried flowers. Artificial or dried flowers for use in the manufacture of a fresh floral tribute covered by sub-item 137(2) may be purchased free of tax under item 113 where the manufacturer is not registered for sales tax. A registered person would acquire the artificial or dried flowers so used free of tax by quoting his sales tax certificate.

COMMISSIONER OF TAXATION
22 October 1985

References

ATO references:
NO 84/6046-9

Date of effect:
Immediate

Subject References:
FLORAL TRIBUTES
IMPORTED FLOWERS

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT 1935; ITEMS 21,
113
AND 137, FIRST SCHEDULE