Was leasing all or part of parcels assessed as agricultural property subject to Florida sales tax on real-property rentals?

Subject

Lease of Agricultural Property

Plain-English summary

Leasing the parcels, or portions of them, was not subject to Florida sales tax because the parcels had been assessed as agricultural property under section 193.461. The county property appraiser confirmed that assessment and the parcels' bona fide agricultural purpose.

The exclusion applied even though the taxpayer leased only portions of some facilities to other entities for the redacted product's production, packaging, and distribution.

What this means for you

For this ruling, the decisive fact was the parcels' agricultural assessment under section 193.461. The Department applied the real-property rental exclusion to leases of the whole parcels and to leases of portions.

Common questions

Q: Was the taxpayer's lease revenue subject to sales tax? No, under the confirmed agricultural-assessment facts.

Q: Did leasing only part of a parcel change the answer? No.

Q: What supported the agricultural status? A county property-appraiser letter confirming the parcels were assessed as agricultural property.

Citations and references

• Fla. Stat. § 212.031(1)(a)1. — agricultural-property lease exclusion
• Fla. Stat. § 193.461 — agricultural-property assessment
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01A-064

Original ruling text

SUMMARY

QUESTION: Is the lease of parcels of real property, or
portions thereof, assessed as agricultural property, in
accordance with section 193.461, F.S., subject to Florida

tax under section 212.031, F.S.?

ANSWER - Based on Facts Below: Section 212.031(1)(a)1.,

F.S., provides the lease of real property that, pursuant to
section 193.461, F.S., has been assessed as agricultural

property is not subject to Florida tax.

Oct 12, 2001

Re: Technical Assistance Advisement 01A-064
XXX ("Taxpayer")
Sales and Use Tax - Lease of Agricultural Property

Section: 212.031, F.S.

Dear:

This is a response to your request, dated September 17, 2001,
for the issuance of a Technical Assistance Advisement (TAA)
concerning the above-referenced parties and matter. Your letters
and supporting documents have been carefully examined, and the
Department finds your request 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 to you

under the authority of section 213.22, Florida Statutes.

FACTS

In your letter dated September 17, 2001, you state:

Taxpayer... is engaged in the production of XXX at its
location in XXX ("City"). The Taxpayer has leased portions
of the facilities to other entities to use for the purposes

of the production of XXX and the packaging and distribution

of such XXX. Additionally, the Taxpayer proposes to lease
all of the other facilities that it presently has under
construction to entities to engage in the production of
XXX.

The particular parcels, portions of which have been leased
or will be leased in total, are identified as Parcel

Numbers XXX and XXX ("the Parcels") in XXX ("County").

These Parcels have been assessed agricultural in accordance

with the provisions of Section 193.461, Florida Statutes,
with their primary use being [a] bona fide agricultural
purpose. Attached is a copy of a letter addressed to
[Taxpayer] from XXX, Office of the Property Appraiser, in
[County], dated August 29, 2001],] affirming this fact.

REQUESTED ADVISEMENT

Taxpayer seeks advice on whether the lease of parcels of real
property, or portions thereof, assessed as agricultural
property, in accordance with section 193.461, F.S., is subject

to Florida sales tax.

APPLICABLE LAW

Section 212.031(1)(a)1., F.S., provides:

(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:

1. Assessed as agricultural property under s. 193.461.

DISCUSSION AND DETERMINATION

Section 212.031(1)(a)1., F.S., provides that "[i]t is hereby
declared to be the legislative intent that every person is
exercising a taxable privilege who engages in the business of...
leasing... any real property unless such property is [a]Jssessed

as agricultural property under s. 193.461], F.S.]"

As indicated in a letter, dated August 29, 2001, from the
Property Appraiser of County, the Parcels in County have been
assessed as agricultural in accordance with the provisions of
Section 193.461, F.S. Accordingly, the lease of these Parcels,

or portions thereof, is not subject to Florida sales tax.

This response constitutes a Technical Assistance Advisement
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 from that

which is 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 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 15 days of the date of this letter.

If | can be of further assistance, please do not hesitate to

contact me at (850) 922-4710.
Sincerely,

Lisa Banks

Attorney

Technical Assistance and Dispute Resolution

/LMB
Control # 46789