Sales and Use Tax TAA 16A-020 Real Property Rentals
QUESTION: IS THE CONSIDERATION PAID TO COUNTY BY CONCESSIONAIRE PROVIDING
FOOD AND DRINK CONCESSIONAIRE SERVICES WITHIN THE PREMISES OF PUBLICLY
OWNED LIBRARY EXEMPT FROM FLORIDA SALES TAX BY SECTION 212.031(1)(A)10., F.S.?
ANSWER: THE LIBRARY IS A PUBLICLY OWNED RECREATIONAL FACILITY. THE CONSIDERATION
PAID BY THE CONCESSIONAIRE TO COUNTY FOR USE OF THE COUNTY-OWNED LIBRARY
IS NOT SUBJECT TO FLORIDA SALES TAX (OTHERWISE IMPOSED BY SECTION 212.031,
F.S.) BECAUSE THE “CONCESSION AGREEMENT” FALLS WITHIN THE
SCOPE OF THE EXEMPTION FOUND AT SECTION 212.031(1)(A)10., F.S.
December 12, 2016
Subject: Technical Assistance Advisement (“TAA”) 16A-020
Sales and Use Tax-Real Property Rentals
Concessionaires at Publicly Owned Recreational Facilities
Section(s) 212.031(1)(a)10., Florida Statutes (“F.S.”)
XXXX (“Petitioner”) XXXX (“County”) XXXX (“City”)
XXXX (“LLC”)
Dear XXXX:
This letter is a response to your petition dated October 12, 2016, for
the Department’s issuance of a Technical Assistance Advisement (“TAA”)
to Petitioner, regarding whether a library is a publicly owned recreational
area exempt from sales tax on real property rental income. Your petition
has been carefully examined, and the Department finds it to be in compliance
with the requisite criteria set forth in Rule Chapter 12-11, F.A.C. This
response to your request constitutes a TAA and is issued to you under
the authority of section 213.22, F.S.
Facts
The XXXX is funded through a countywide municipal services taxing unit
assessment. County has assumed all administrative and operational functions
of the library system. This includes the operation of all library facilities
located within the corporate limits of the City. The downtown main library
facility (XXXX square feet) is owned by the City and leased to the County
pursuant to a separate lease agreement. As part of the countywide library
system, the main library facility is a community institution serving informational,
recreational, and educational needs of the citizens of County by providing
free access to reading and audio-visual materials, and offering public
computing, database, and Internet access technology. County issued a formal
solicitation seeking a concessionaire to provide food and beverage concession
services for XXXX to be located at the County’s downtown main library.
LLC submitted a proposal and was deemed the most qualified concessionaire
to provide such services.
County and LLC signed an agreement (“Agreement”). The Agreement
with LLC requires LLC to provide food and drink concessionaire services
within the library facility. Per the terms of the Agreement, LLC may use
a defined portion of the library facility (approximately XXXX square feet)
to provide these services. LLC is required to pay County a monthly fee
based on a percentage of net sales.
A copy of the proposal and Agreement is included with the request.
Requested Advisement
Question #1. Is the library a publicly owned recreational facility?
Question #2. Is the monthly fee paid to County for the exclusive license
to provide food and drink concessionaire services within the public library
subject to sales tax?
Taxpayer Position
Based on the analysis used by the Department in prior advisements, the
library is a publicly owned recreational facility. The fee is not subject
to tax, as provided by s. 212.031(1)(a)10., Florida Statutes (“F.S.”)
Applicable Law and Discussion
Section 212.031, F.S., provides in part:
(1)(a) It is declared to be the legislative intent that every person is
exercising a taxable privilege who engages in the business of renting,
leasing, letting, or granting a license for the use of any real property
unless such property is:
10. Leased, subleased, licensed, or rented to a person providing food and
drink concessionaire services within the premises of a convention hall,
exhibition hall, auditorium, stadium, theater, arena, civic center, performing
arts center, publicly owned recreational facility, or any business operated
under a permit issued pursuant to chapter 550. …
Persons engaging in the business of renting, leasing, letting, or granting
licenses for the use of any real property are exercising a taxable privilege.
See Section 212.031, F.S. An exemption from the tax otherwise imposed
for this privilege involves property that is leased, subleased, licensed,
or rented to persons providing food and drink concessionaire services
within the premises of a publicly owned recreational facility. See Section
212.031(1)(a)10., F.S. “Exemptions to taxing statutes are special
favors granted by the Legislature and are to be strictly construed against
the taxpayer.” State ex rel. Szabo Food Services, Inc. v. Dickinson,
286 So.2d 529, 530 (Fla. 1973).
Because no definition of "recreational facility" is provided
by statute, it is necessary to look to principles of statutory construction.
Words of common usage, when used in a statute, should be construed in
their plain and ordinary sense. Pederson v. Green, 105 So.2d 1 (Fla. 1958).
The word "recreation" is defined in Merriam-Webster’s Collegiate
Dictionary (Tenth Edition, 1999) as meaning:
… refreshment of strength and spirits after work; also: a means
of refreshment or diversion: HOBBY – recreational … adj
Merriam-Webster’s defines the word “facility” as meaning:
… something (as a hospital) that is built, installed, or established
to serve a particular purpose. Id.
We also note that no definition of the word “concessionaire”
is provided by statute. MerriamWebster’s Collegiate Dictionary (Tenth
Edition, 1999) defines “concessionaire” as meaning:
[T]he owner or operator of a concession; esp: one that operates a refreshment
stand at a recreational center.
County’s library is a place within the plain and ordinary meaning
of “recreational facility,” as it is a place built, installed,
or established to serve the purposes of refreshing strength and spirit,
and for providing diversion. The library is publicly owned (i.e., owned
by County). LLC, which is granted the right to provide food and drinks
at the library, is a concessionaire.
Questions and Response
Question #1. Is the library a publicly owned recreational facility?
Response: Yes.
Question #2. Is the monthly fee paid to County for the exclusive license
to provide food and drink concessionaire services within the public library
subject to sales tax?
Response: No. The exemption provided for by s. 212.031(1)(a)10., F.S., applies.
Concluding Statement
The monthly fee paid to County for space used at County’s library
is not subject to Florida sales tax, because Agreement is within the scope
of the exemption found at Section 212.031(1)(a)10., F.S.
This response constitutes a Technical Assistance Advisement under section
213.22, F.S., which is binding on the Department only under the facts
and circumstances described in the request for this advice, as specified
in section 213.22, F.S. Our response is predicated on those facts and
the specific situation summarized above. You are advised that subsequent
statutory or administrative rule changes, or judicial interpretations
of the statutes or rules, upon which this advice is based, may subject
similar future transactions to a different treatment than expressed in
this response.
You are further advised that this response, your request and related backup
documents are public records under Chapter 119, F.S., and are subject
to disclosure to the public under the conditions of section 213.22, F.S.
Confidential information must be deleted before public disclosure. In
an effort to protect confidentiality, we request you provide the undersigned
with an edited copy of your request for Technical Assistance Advisement,
the backup material and this response, deleting names, addresses and any
other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 10 days of the date
of this letter.
Respectfully,
Charles Wallace Technical Assistance & Dispute Resolution 850-717-7541
Record ID: 212046