TAA 25A-004 Admissions

QUESTION: Club requests to obtain advisement as to the Department's position on whether the assessments ("Assessments") payable by Owners would be subject to sales and use tax after the contemplated merger of Club into Association, where the surviving entity is Association. More specifically, whether Assessments, used for Association's costs for Club common areas and club facilities' maintenance, which are payable by property owners, would be subject to Florida sales and use tax after the merger. 

ANSWER: Assessments would not be subject to tax due to the following assertions made by Club regarding Assessments: 1) Assessments addressed in this advisement are mandatory; 2) Assessments addressed in this advisement are paid to Association, which is a homeowner's association under s. 720.301(9), F.S¹.; 3) Assessments addressed in this advisement are required to be paid as a condition of ownership of real property where the common areas are located; and 4) Assessments addressed in this advisement are used for Association's costs for common area maintenance and are not for the entitlement to use Club Community Property. 

July 31, 2025

Technical Assistance Advisement - TAA #: 25A-004 

________________ ("Club") 

BP#: ________________ 

FEI#: ________________ 

FEI#: ________________ ("Association")  

Sales and Use Tax - Admissions 

Sections 212.02(1) and 212.04(1), Florida Statutes - ("F.S.") 

Rule 12A-1.005(4)(d)3., Florida Administrative Code - ("F.A.C.")

Dear ________________ 

This is in response to your letter dated ________________ , requesting this Department's issuance of a Technical Assistance Advisement ("TAA") pursuant to Section(s.) 213.22, F.S., and Rule Chapter 12-11 F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request has been carefully examined, and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued toto you under the authority of s. 213.22, F.S.

REQUESTED ADVISMENT

Club requests to obtain advisement as to the Department's position on whether the assessments ("Assessments") payable by Owners in the Community would be subject to sales and use tax after the contemplated merger of Club into Association, where the surviving entity is Association. More specifically, whether Assessments, used for Association's costs for Club common areas and club facilities' maintenance, which are payable by property owners, would be subject to Florida sales and use tax after the merger.

FACTS

In email correspondence date, ________________ , Club asserted the following: 

• The Assessments addressed in this advisement are mandatory. 
• The Assessments addressed in this advisement are paid to Association, which is a homeowner's association under s. 720.301(9), F.S. 
• The Assessments addressed in this advisement are required to be paid as a condition of ownership of real property where the common areas are located. 
• The Assessments addressed in this advisement are used for Association's costs for common area maintenance and aren't for the entitlement to use the common areas.

Club is a member-owned not-for-profit Florida corporation governed by Chapter 617, F.S., and by Club's Articles of Incorporation and By-Laws. Club currently owns, operates, and maintains the "Club Community Property," which includes but is not limited to an ________________ golf course, a golf studio with ________________ four “________________ ” available for ________________________________________________

________________.  

Association is a homeowners' association which is incorporated as a not-for-profit corporation located in ________________ and consists of ________________________________. Association is governed by Chapters 617 and 720, F.S., and by recorded restrictive covenants including, but not limited to, its Declaration of Covenants, Conditions and Restrictions for ________________ ("Declaration"), its Articles of Incorporation, and its Bylaws as each was originally recorded and as each have been amended and restated from time to time.

Each "Owner" is an Association member by virtue of ownership of real property in the Community. The "Community" is the cumulative real property as described in Exhibits 1 through 4 of Declaration (which includes the Club Community Property).² 

Club is currently owned by ________________ equity members, including ________________ Owner equity members, who are also members of Association, and ________________ non-Owner equity members who do not own homes in the Community and are not eligible for Association membership.

There is a contemplated merger of Club into Association whereby Association will be the surviving entity. Membership in the Association has been and shall continue to be separate and distinct from Club membership. The process of obtaining a Club membership is set forth in the By-Laws and other recorded governing documents for the Community. 

Following the effective date of the merger ("Effective Date"), the ________________ non-Owner equity memberships will be exchanged for a license agreement to authorize use of the Club Community Property but shall not confer an Association membership. These non-Owners (the "Licensees") shall be permitted to have access to the Club Community Property but will not be members of Club or members of Association.

In addition, Club previously entered into use agreements ("Club Use Agreements") with the owners of ________________ residential cottages("________________  "). The ________________ are members of Association but are not required to be members of Club. The Club Use Agreements grant ________________ non-exclusive licenses to use Club Community Property. Each ________________ may choose up to ________________ delegates annually who will be entitled to use Club Community Property but are not equity members of Club. Currently, ________________ of the ________________  ________________ have exercised their right to name one or more delegates to use the Club Community Property. 

Following the Effective Date, ________________ will continue to be Association members and will still have the ability to name delegates pursuant to the existing Club Use Agreements between Association and ________________ , subject to payment of the applicable dues, assessments and fees to the Foundation, but will not be required to be Club members.

Following the Effective Date, the Club Community Property will be part of the Community Property. Further, every Owner will continue to be an Association member, and every Owner shall also be a Club member, other than the "Grandfathered Owners." A Grandfathered Owner is an owner who is not required to be a Club member because such Owner (i) acquired Owner's lot prior the Effective Date, and at the time of acquisition of such lot, was not subject to mandatory membership in the Club; (ii) was not a member of the Club on the Effective Date; and (iii) has not become a Club member on or after the Effective Date. For clarity, Grandfathered Owners shall not have any access to the Club Community Property whatsoever (including as a guest of a Club member), except as expressly provided otherwise in the applicable Club Use Agreement.

Following the Effective Date, all new Owners will be required to be both Association members and Club members. In other words, no new Grandfathered Owners will be created after the Effective Date. There are currently ________________ Grandfathered Owners. 

In summary, following the Effective Date, Association and Club will be comprised of substantially the same members as follows:

(a) ________________ Owners who are members of both Association and Club. 

(b) ________________ Grandfathered Owners who are Association members but are not required to be Club members. 

(c) ________________ non-Owner Licensees who have rights and privileges to use the Club Community Property but are not members of Association or Club. 

(d) ________________ who are Association members but not Club members, who have the authority to assign rights to use the Club Community Property to up to ________________ designated individuals.

It is important to note that from and after the Effective Date, all Owners must maintain one Association membership for each lot owned in the Community and, other than Grandfathered Owners, must also acquire and maintain a Club membership in good standing as a condition of ownership of such lot. Ownership of a lot shall be the sole qualification for Association membership. Neither Association memberships nor Club memberships are assignable or transferrable, except to the successor-in-interest of the Owner's lot and every Association membership and Club membership shall be appurtenant to and inseparable from ownership of such Owner's lot. Membership shall continue until the member transfers or conveys record title to the lot or until record title to the Owner's lot is transferred by operation of law, at which time, the transferee shall become an Association member and a Club member. 

It is contemplated that the merger will be consummated substantially in accordance with a Plan of Merger pursuant to which: (i) Club will be merged with and into the Association as authorized by §617.0302(16), F.S.; (ii) the proposed effective date of the merger is ________________, and Association, as the surviving corporation, will continue to be a Florida not-for-profit corporation and a homeowners' association pursuant to §720.301(9),F.S.; (iii) all other matters pertaining to the terms and conditions of the merger, including the manner and basis of converting the memberships of each merging corporation into memberships of the surviving corporation; recitation of the approval of the Plan of Merger by the Board of Directors of the Association and by the Board of Governors of Club respectively, and recitation of the voting approvals required by both Association members and Club members will be incorporated into the finalized merger documents.

As stated above, each Owner shall become an Association member upon title to the lot being conveyed by deed and upon recording of said deed in the Public Records of ________________ Florida. The record owners of lots shall be Association members and no other persons or entities shall be Association members. An Association member shall have one vote for each lot owned. Following the merger, it is anticipated that expenses related to the Community Property shall be categorized so that each Owner pays a pro rata portion of expenses related to the Community Property based on the number of lots owned by such owner and each Club member shall pay a pro rata portion of expenses related to the Club Community Property based on the number of Club memberships held. Club members will be required to pay mandatory dues and fees to the Association as a condition of ownership or occupancy of their lots in the Community and the Club Community Property will be part of the Community Property.

TAXPAYER POSITION

Club believes, based on the relevant Florida Statutes and Administrative Code, that the required Assessments to be paid to Association, as the surviving entity of the merger in connection with membership, will represent nontaxable admissions pursuant to Rule 12A-1.005(4)(d)3., F.A.C. because, such amounts are: (i) mandatory fees payable by property owners in the Community; (ii) paid to a homeowners association; (iii) required to be paid as a condition of ownership; and (iv) the Club Community Property will be part of the common elements or common areas of the real property constituting the Community. 

Grandfathered Owners are not permitted to use the Club Community Property and will be replaced when the lot is sold to a new Owner with full rights and privileges to use the Club Community Property and who will pay full assessments and dues. Therefore, it is appropriate to disregard Grandfathered Owners in determining that the assessments are exempt from sales tax. 

Former Club members who are not residents of the Community (and therefore not members of Association) will become Licensees that may continue to use the Club Community Property if they pay the applicable fees. The appropriate sales tax will continue to be charged on these fees.

Club believes that the amount paid to join the merged entity should be exempt pursuant to Rule 12A-1.005(4)(a)1.a., F.A.C. as the initial capital contribution would be paid to join or obtain an equitable ownership interest in the organization and may not be used for any operational purposes. Finally, it is Club’s understanding that should Association establish capital assessments that would be paid by members of the merged entity, then these assessments should be exempt pursuant to Rule 12A-1.005(4)(a)2., F.A.C. because any such capital assessments will (i) be separately accounted for and not recorded in an operating revenue account; (ii) not be paid for the right to use the organization’s recreational, physical fitness, or other facilities without subsequent periodic payments; (iii) not be used to decrease user fees or periodic membership dues; and (iv) not be used to pay for the operating expenses of the organization. 

** Please note that this TAA will only opine on Assessments used for Association’s costs for Club common areas and Club facilities’ maintenance, which are payable by property owners, as was discussed in our telephone conference on ________________.

LAW AND APPLICABLE RULE

Section 212.04(1) and (2), F.S., provide that it is the legislative intent that every person is exercising a taxable privilege who sells or receives anything of value by way of admissions and such person must add 6% sales tax to each admission sold, unless a specific exemption applies.

Section 212.02(1), F.S., defines the term, “admissions,” as “. . . the net sum of money after deduction of any federal taxes for admitting a person or vehicle or persons to any place of amusement, sport, or recreation . . . and all dues and fees paid to private clubs and membership clubs providing recreational or physical facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, exercise, and fitness facilities, . . .” 

Rule 12A-1.005(4)(d), F.A.C., provides in part as follows: 

Fees paid to private clubs or membership clubs that do not entitle the payor to the use of the club’s recreational or physical facilities are not subject to tax. Examples of such fees are:

*** 

3. Mandatory dues and fees paid to a condominium association, homeowners’ association, or cooperative association when they are required to be paid as a condition of ownership or occupancy of real property and the club facilities are part of the common elements or common areas of the real property. 

Accordingly, pursuant to the Rule non-taxable dues and fees must be:

• mandatory; 
• paid to a condominium, homeowners, or cooperative association; 
• required to be paid as a condition of ownership or occupancy of real property; and 
• do not entitle the payor to use of the club’s recreational or physical facilities.

CONCLUSION

Assessments would not be subject to tax due to the following assertions made by Club regarding Assessments: 1) Assessments addressed in this advisement are mandatory; 2) Assessments addressed in this advisement are paid to Association, which is a homeowner’s association under s. 720.301(9), F.S.; 3) Assessments addressed in this advisement are required to be paid as a condition of ownership of real property where the common areas are located; and 4) Assessments addressed in this advisement are used for Association’s costs for common area maintenance and are not for the entitlement to use Club Community Property. 

This response constitutes a TAA under s. 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 s. 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 s. 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 TAA, 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 ten (10) days of the date of this letter.

Leigh L. Ceci, MAcc 

Tax Law Specialist 

Office of Technical Assistance

^{1) Section 720.301(9), F.S., provides, "Homeowners' associations" or "association" means a Florida corporation responsible for the operation of a community or mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. The term "homeowners' association" does not include a community development district or other similar taxing district created pursuant to statute.}

^{2) "Community Property" refers generally to all real and personal property including improvements, amenities, easements, fixtures and facilities owned, leased, or controlled by Association or to which Association accepts maintenance responsibilities or to which Association has use rights.}