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FL Taxpayer Wins! Reservation & Cleaning Fees NOT Taxable!


Florida’s hotel reservation industry claimed another victory this week against the county Tourist Development Tax and Florida Sales Tax. This time we were dealing with Sarasota County trying to impose the local Tourist Development Tax in Sarasota Surf & Racquet Club Condominium Association, Inc. v Sarasota County, Florida and Florida Department of Revenue, Case No. 2015 CA 002612 NC (Fla. 12th Cir, July 11, 2016) based on reservation and cleaning fees charged to guested during the reservation process. The case closely followed the recent precedent set by Alachua County v. Expedia, Inc., 175 So.3d 730, 733 (Fla. 2015), creating a very steep uphill battle for Sarasota County.

The facts of this case were substantially similar to the Expedia case, but on a much more local scale. In Expedia, 13 counties attempted to force Expedia, Orbitz, and similar situated online hotel reservation companies to collect and remit sales tax based on the full price guests paid for a room, despite the fact that each individual hotel only received a fraction of the fees paid by the guest when booking hotels through the online reservation system. The remaining portion of the price paid by the guest went to the reservation company. Of course, the 13 counties wanted to maximize tax revenue by requiring the tax to be imposed on every penny paid by the guest. The online reservation companies argued, successfully, that the law imposing tax on sleeping accommodations applied to the amount received by the hotel for occupancy of the room and not for all the ancillary fees charged by the reservation company. Thus, the local taxes (and state sales tax) could only be imposed on the net amount paid to the hotel for sleeping accommodations and not the other fees charged by the online reservation companies.

Sarasota Surf & Racquet Club Condominium Association, Inc. (“Taxpayer”) similarly took reservations for condominiums owned by others. The Taxpayer charged a flat fee for reservations and a flat fee for cleaning services, neither of which was applied to or reduced the amount of charge for the occupancy of the condominium unit. Sarasota County audited the Taxpayer for Tourist Development Taxes and assessed over $50,000 in taxes, penalties, and interest claiming the reservation fee and cleaning fees were subject to the local tax. The Taxpayer challenged the assessment in the 12th Judicial Circuit Court and the parties filed cross motions for summary judgement. Oral arguments took place on July 7, 2016 in Sarasota County before the Honorable Judge Rochell T Curley. The opinion issued on July 11, 2016, (but signed on July 8th), granted the Taxpayer’s motion for summary judgement and denying the County/State’s motion for summary judgement. You can download pdf copies of the motion for summary judgement and the opinion at the end of this article.

Probably the most interesting part of this case relates to the cleaning fees. While the Expedia case did hold that only the amount received by the hotel for occupancy was subject to tax, “cleaning fees” were not specifically addressed by the Florida Supreme Court’s holding. Following the logic of both the Florida Supreme Court in Expedia and the 12th Circuit in Sarasota Surf and Racquet Club Condominium Association, fees charged by a separate reservation company for anything except occupancy of the room would be outside the scope of both Florida sales tax and the county local “bed taxes.”

I should point out that this case was argued and won by our law firm. Our partner, Joe Moffa, and associate attorney, Jonathan Taylor, argued the case on behalf of Sarasota Surf & Racquet Club Condominium Association. Please give them a congratulatory email or social media blast for their hard efforts! Our law firm is focused almost entirely on fighting the state of Florida on behalf of taxpayers being wrongly assessed taxes, whether it be sales tax, local taxes, or other Florida state taxes. While other law firms focus on the IRS, our firm remains in our little niche of Florida tax controversy. If you or your client have any questions or concerns regarding Florida taxes, then please don’t hesitate to take advantage of our free initial consultation policy.

Florida sales tax attorney; Florida sales tax auditAbout the author: Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm Moffa, Sutton, & Donnini, PA. Mr. Sutton’s primary practice is Florida tax controversy, with an almost exclusive focus on Florida sales and use tax. Mr. Sutton worked for in the State and Local Tax department of one of the Big Five accounting firms for a number of years and has been an adjunct professor of law at Stetson University College of Law since 2002 teaching State and Local Tax and at Boston University College of Law since 2014 teaching Sales and Use Tax. Mr. Sutton is a frequent speaker on Florida sales and use taxes for the FICPA, Lorman Education, NBI, AAA-CPA, and the Florida Society of Accountants. Mr. Sutton is also co-author of CCH's Sales and Use Tax Treatise. You can contact Mr. Sutton at 813-775-2131 or or his firm bio.


Sarasota Surf & Racquet Club Condominium Association Inc v Sarasota County, Florida and Florida Department of Revenue, Case No. 2015 CA 002612 NC (Fla. 12th Cir, July 11, 2016)( Order granting plaintiff’s motion for summary judgement and denying defendant’s motion for summary judgement)

Alachua County v. Expedia, Inc., 175 So.3d 730, 733 (Fla. 2015)

Rule 12A-1.091(b), F.A.C. (charges for cleaning residential facilities are not subject to tax)


FL TAX – ONLINE TRAVEL COMPANIES WIN AT FLORIDA SUPREME COURT, published June 17, 2015, by Jerry Donnini, Esq.


WHEN SALES TAX AUDITORS MAY NOT PICK AND CHOOSE RECORDS TO USE, published April 19, 2015, by Joseph C Moffa, CPA, Esq.

FL TAX AUDITS – TAXPAYER BILL OF RIGHTS PROTECTS NO RIGHTS, published May 5, 2015, by Matthew Parker, Esq.

FL DBPT ABT LOSES BLUNT WRAPS TAXABILITY CASE, published March 15, 2015, by Jerry Donnini, Esq.

FLORIDA HOMESTEAD TAX EXEMPTION CASE – MARY JANE, published March 15, 2015, by Amanda Levine, Esq.

FL DOR SMELLING THE WRONG KIND OF FLOWERS, published November 19, 2014, by Jerry Donnini, Esq.