FL 1st DCA - Ruehl Case Decided - Tenant Improvements NOT Subject to Sales Tax

The Ruehl case concerns whether the improvements made by a Tenant to a leased premises may be considered rent to the Landlord for purposes of Florida Sales and Use Tax. This is a very hot, contested topic in the Florida Tax arena. The First DCA Opinion came out today - December 30, 2011.

The appellate court held no fault with the trial court's opinion, upholding that the tenant improvements in this specific case were not intended to be "rent" for the purposes of Florida Sales and Use Tax and, therefore, would not be subject to Florida Sales Tax. This holding appears to be fact specific and may not necessarilly be relied upon for other taxpayers not very similiarly situated. Either way, we will all wait to see whether the FL DOR will conceed defeat on the issue entirely or merely substaintally back off unless the facts point to intentional avoidance of tax.

For those interested in reading the opinion, watching the oral arguments in front of the First DCA , or reading the trial court motions, please follow the links below.

Link to the 1st DCA Opinion: FL DOR v Ruehl, Case No 1D11-2174 - 12-30-2011

Link to the Ruehl 1st DCA Oral Arguements on the 1st DCA web site (VERY INTERESTING TO WATCH!)

Copy of the RUEHL CASE - AMENDED COMPLAINT

Copy of the RUEHL CASE - ORDER GRANTING SUMMARY JUDGEMENT

Copy of the RUEHL CASE - ANSWER BRIEF IN THE 1ST DCA

Copy of the RUEHL CASE - AMICI CURIAE BRIEF BY FLORIDA RESTAURANT & LODGING ASSOCIATION, INC.

If you have questions about the taxability of tenant improvement, then please contact our office for a free evaluation.