Was a railroad crossing license taxable when a cable television provider's wires crossed the tracks within a public road right-of-way?

Plain-English summary

Florida exempted the railroad crossing license because the cable television provider used real property within a public road right-of-way for communications purposes.

Section 212.031(1)(a)5., as quoted in the ruling, excluded a public or private street or right-of-way—and related poles, conduits, fixtures, and improvements—when occupied by a utility or communications provider for utility, communications, or television purposes.

The decisive facts were the licensee's status as a communications provider and the cable's location in the public right-of-way where the railroad intersected it.

What this means for you

Communications providers reviewing historical real-property license charges should document the precise location of the facilities and the statutory status of the user. The ruling did not address a crossing outside a qualifying right-of-way.

Common questions

Q: Was the railroad company itself the communications provider?
A: No. The cable television licensee was the provider.

Q: Why was the license exempt?
A: The cable occupied a public road right-of-way for communications or television purposes.

Q: Did the ruling cover private railroad property outside the right-of-way?
A: No. Its conclusion depended on the licensed property being on the public road right-of-way.

Citations and references

• Fla. Stat. § 202.11 — communications-services definition
• Fla. Stat. § 212.031(1)(a)5. — historical right-of-way exemption
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 03A-037

Original ruling text

SUMMARY

QUESTION: Is a license to use real property subject to
Florida sales tax where the licensee is a provider of
communication services and the licensor is operating a
railroad that intersects with a public road right of way,
upon which the licensee's cable runs?

ANSWER-Based on the Facts Below: No. Pursuant to Section
212.031(1)(a)5., F.S., a license granted to a taxpayer by a
licensor is exempt from Florida sales tax when the taxpayer
is a provider of communication services and the real
property being licensed is on a public road right-of-way.

Jul 17, 2003

Subject: Technical Assistance Advisement 03A-037
License to Use Real Property; Communications Cable on
a Public Way
Sales and Use Tax
Sections 202.11 and 212.031, F.S. ("Florida Statutes")
XXX ("Taxpayer")

Dear :

This response is in reply to your letter dated May 15, 2003,
requesting this Department's issuance of a Technical Assistance
Advisement ("TAA") pursuant to Section 213.22, F.S., and Chapter
12-11, F.A.C., regarding the referenced matter and party. An
examination of your letter has established that you have
complied with the statutory and regulatory requirements for
issuance of a TAA. Therefore, the Department is hereby granting
your request for issuance of a TAA.

ISSUE

Is a license to use real property subject to Florida sales tax
where the licensee is a provider of communication services and

the licensor is operating a railroad that intersects with the
public right of way upon which the licensee's wire runs?

FACTS

You previously had requested a Letter of Technical Advice on the
above issue, by way of a letter dated October 17, 2002. Under
cover of a letter dated February 12, 2003, you transmitted a
copy of the "XXX" ("the Agreement") and "XXX" ("the
Application") to the Department.

Your letter of October 17, 2002 provides in part:

[The Taxpayer] is a cable [television] company currently
serving many counties in Florida. We have wireline
crossings with [Railroad Company]. We cross railroad
tracks owned by [Railroad Company] within a public right of
way....

The Agreement provides in part:

WHEREAS, the Licensee [the Taxpayer] desires to construct,
use and maintain a wire or cable, broadband communications
services, including but not limited to the retransmission
of video programming, and other related communications
services that licensee provides, through or on metal strand
wire(s), hereinafter called "Wireline," over or across the
track(s) and property owned or controlled by Licensor at or
near [City], County of..., State of Florida....

A drawing attached to the Agreement shows that the Railroad
Right-of-Way runs (generally) in a north to south direction and
intersects County Road 270 (which appears to generally run west
to east). The Wireline appears to run parallel to County Road
270, in the public road right-of-way, and crosses 100 feet of
the Railroad Company's Right-of-Way at a height of 29 feet, 2
inches.

The Application provides that the Wireline is located in a
public road right-of-way. The "DOT/AAR Crossing" number
provided is: 625737A.

THE TAXPAYER'S POSITION

Your letter dated October 17, 2002 provides in part:

... Upon review of relevant Florida statutes, we found that
the statutes do not cover the licenses we have with
[Railroad Company]....

Your letter dated February 12, 2003 provides in part:

... We paid the one-time fee and we have also paid the
sales tax requested by [Railroad Company]. [Railroad
Company] has agreed to reimburse those fees to us if your
finding is that we do not have to pay sales tax.

APPLICABLE STATUTES AND RULES

Section 202.11, F.S., provides in part:

(3) "Communications services" means the transmission,
conveyance, or routing of voice, data, audio, video, or any
other information or signals, including cable services, to
a point, or between or among points, by or through any
electronic, radio, satellite, cable, optical, microwave, or
other medium or method now in existence or hereafter
devised, regardless of the protocol used for such
transmission or conveyance....

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

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:

5. A public or private street or right-of-way and poles,
   conduits, fixtures, and similar improvements located on
   such streets or rights-of-way, occupied or used by a
   utility or provider of communications services, as defined
   by s. 202.11, for utility or communications or television
   purposes....

RESPONSE

The license granted to the Taxpayer by the Railroad Company is
exempt from Florida sales tax because the Taxpayer is providing
communication services and the real property licensed is on a
public road right-of-way.

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 advise 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 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.

Sincerely,

Eric R. Peate
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922-4714

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