Under Florida's former commercial-rent tax, was a city's voluntary license of city-owned beach space to an equipment-rental concessionaire taxable?

Plain-English summary

For the 2004 ruling period, Florida treated the city's beach-equipment concession agreement as a taxable license to use real property. The city owned the beach parcel in fee simple and voluntarily granted exclusive use through a formal proposal process.

The agreement required twelve equal installments of $2,650 plus sales tax. It was later assigned to another beach-equipment rental company, which argued that its payments were not taxable.

The city acted as property owner, not regulator

The Department distinguished two cases involving government concession agreements:

• In Lloyd Enterprises, Volusia County acted under a beach-regulation ordinance on state-owned property, so the arrangement was not treated as the county's real-property rental business.
• In IPC Sports, Miami-Dade County voluntarily licensed county-owned land and was treated as engaging in the business of licensing real property.

The city here matched IPC Sports. It owned the property, used an RFP and voluntary contract, granted other real-property licenses, and had no ordinance or municipal mandate requiring this concession or its fees.

Under the then-effective section 212.031, the concession payments were therefore taxable rent or license fees.

Current-law note

Florida TAA 25A-010 states that the Legislature repealed the general commercial-real-property rent tax effective October 1, 2025. No state sales tax or discretionary sales surtax applies to rent or license fees for rental or occupancy periods beginning on or after that date.

TAA 04A-008 remains useful as historical analysis of government ownership and regulatory versus voluntary agreements, but not as a current basis for collecting the repealed general rent tax.

What this means for you

Municipalities

For the former tax, fee-simple ownership and a voluntary revenue-producing concession made the city a licensor rather than a regulator. Current contracts require current-law analysis after the repeal.

Beach concessionaires

The 2004 result depended on the legal right to occupy city-owned space, not merely the concessionaire's separate rental of chairs or other equipment to beach customers.

Accountants and tax professionals

Separate historical commercial-rent liabilities from periods beginning October 1, 2025 or later.

Common questions

Q: Why was the concession agreement taxable in 2004?
A: The city voluntarily licensed property it owned in fee simple and was not merely enforcing a regulatory ordinance.

Q: Did the city grant only this one license?
A: No. The ruling stated that it granted other real-property licenses as well.

Q: Does the general commercial-rent tax still apply?
A: Not for rental or occupancy periods beginning on or after October 1, 2025, according to Florida TAA 25A-010.

Citations and references

• Fla. Stat. § 212.02(2), (10), (12) — business, real-property license, and person definitions
• Fla. Stat. § 212.031(1)(a); Fla. Admin. Code r. 12A-1.070 — former commercial-rent tax and real-property licenses
• IPC Sports, Inc. v. Department of Revenue, 829 So. 2d 330 (Fla. 3d DCA 2002) — voluntary license of government-owned property
• Lloyd Enterprises, Inc. v. Department of Revenue, 651 So. 2d 735 (Fla. 5th DCA 1995) — regulatory beach concession distinguished by the ruling
• Section 37, Chapter 2025-208, Laws of Florida — repeal cited by Florida TAA 25A-010
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 04A-008
• Current-law source: TAA 25A-010

Original ruling text

SUMMARY

QUESTION: Whether the lease of or license to use real
property, owned by a city in fee simple, for the purpose of
providing a beach concession that rents tangible personal
property, is subject to sales tax pursuant to Section
212.031, F.S.

ANSWER - Based on Facts Below: Yes. The Agreement between
the City and the Concessionaire is a taxable license to use
real property. As defined in Section 212.02(2), (10), and
(12), F.S., the City is a person engaged in the business of
granting a license for the use of real property.
Specifically, the City and the Concessionaire voluntarily
entered into the Agreement via a formal proposal process
for the license of the real property, which the City owned
in fee simple. There was no city ordinance or other
municipal mandate requiring the Agreement or the license
fees. Thus, like Dade County in IPC Sports, Inc. v.
Department of Revenue, 829 So.2d 330 (Fla. 3rd DCA 2002)
and unlike Volusia County in Lloyd Enterprises, Inc. v.
Department of Revenue, 651 So.2d 735 (Fla. 5th DCA 1995),
the City can legally enter into leases or licenses for the
use of real property it owns for the purpose of providing a
beach concession of tangible personal property.

Feb 03, 2004

Subject: Technical Assistance Advisement 04A-008
Lease or License for the Use of Real Property
Sales and Use Tax
Section 212.031, Florida Statutes (F.S.)
Rule 12A-1.070, Florida Administrative Code (F.A.C.)
XXX

Dear :

This is in response to your letter dated December 15, 2003,

requesting a written technical assistance advisement regarding
the taxability of payments made to the Taxpayer by its beach
equipment rental concessionaire.

FACTS

Your letter provided the following facts:

On August 8, 2000, the [Taxpayer] issued a Request for
Proposals for Beach Equipment Rental Concession (the
"RFP"). On September 8, 200[1], [First Concessionaire]
submitted a proposal in response to the RFP (the
"Proposal"). On January 4, 2001, the [Taxpayer] and [First
Concessionaire] entered into an agreement pursuant to which
[First Concessionaire] was to operate a beach equipment
rental concession [on the beach]. The RFP and the Proposal
are attached as an exhibit to the Agreement. A copy of the
Agreement, with the RFP and Proposal attached, is enclosed.
The second "WHEREAS" paragraph of the Agreement provides
for a term of one year, with two potential renewals of one
year each, and the last "WHEREAS" paragraph of the
Agreement provides for 12 equal installments of $2,650,
plus applicable sales tax.(FN 1)

The land on which Concessionaire operates is specifically
described on Page 1 of the RFP. The [Taxpayer] has fee
simple title to this land. The [Taxpayer] grants other
licenses of real property to other persons or entities.

On December 21, 2001, the Agreement was assigned to
[another beach equipment rental company]
("Concessionaire").... Concessionaire contends that its
payments are not subject to sales tax. A copy of the
Renewal and Assignment of Agreement is enclosed.

TAXPAYER POSITION

Your letter provides your position as follows:

***
Lloyd Enterprises, Inc. v. Department of Revenue, 651 So.2d
735 (Fla. 5th DCA 1995) is a case involving similar, but
distinguishable facts that held the fees paid by a beach
concessionaire were not taxable. In Lloyd, Volusia County
received a concession fee from Lloyd Enterprises, Inc. and
other concessionaires. The court held that such payments
were not subject to sales tax, based on the findings that
(i) the County's "business" was to regulate the use of the
beach under the Unified Beach Code and (ii) the contracts
between the concessionaires and the County were more in the
nature of acknowledgements of the County's regulation than
voluntary contracts.

In our situation, there is no code that in any way affects
the beach equipment rental concession. In other words, the
concession is not a function of the [Taxpayer's] regulatory
authority over the beach. The relationship between the
[Taxpayer] and the Concessionaire was established solely as
a result of the RFP process and is embodied solely in the
concession agreement

In IPC Sports, Inc. v. Department of Revenue, 829 So.2d 330
(Fla. 3d DCA 2002), IPC and Miami-Dade County entered into
an agreement for IPC to conduct a professional tennis
tournament during a two-week period each year on property
owned by the County. IPC paid a license fee to the county
for the right to conduct the tennis tournament. There was
no County ordinance that required a tennis tournament to be
held on the County-owned property.

The IPC court, in a decision primarily quoting a decision
of an administrative hearing officer upon which the
Department of Revenue based its final order, determined
that the agreement between IPC and Miami-Dade County did
not involve the police or regulatory power of the County at
all and was a voluntary agreement not required by law.
Similarly, the agreement between Concessionaire and the
[Taxpayer] does not involve the police or regulatory power
of the [Taxpayer] and is a voluntary agreement not required

by law. Lastly, the Court noted that Miami-Dade County had
fee simple title to the land that was subject to its
agreement with IPC, while in Lloyd, Volusia County did not
have any ownership interest in the property on which the
concessionaires operated. As stated previously, the
[Taxpayer] owns the property on which Concessionaire
operates

IPC also discussed the "engages in the business of"
language of Section 212.031(1)(a), Florida Statutes. First
it cited Regal Kitchens, Inc. v. Department of Revenue, 641
So.2d 158 (Fla. 1st DCA 1994) for the principle that said
language can refer to even a single transaction. Later in
the opinion, IPC states that the agreement between IPC and
the County "is not an isolated event, since the County also
grants other licenses or leases of real property to
others...." While it is curious that the opinion first
says that one transaction can constitute a business and
later mentions that the IPC license was not the only one
granted by the County, the fact that the [Taxpayer] grants
multiple licenses appears to make this a non-issue.

Although Lloyd held that certain concession payments were
not taxable, its facts are distinguishable from the facts
of IPC and from the current facts regarding Concessionaire
and the [Taxpayer.] Therefore, Concessionaire's payments
to the [Taxpayer] appear to be taxable.(FN 2)

APPLICABLE STATUTES AND RULES

Section 212.02, F.S., provides in pertinent part:

The following terms and phrases when used in this chapter
have the meanings ascribed to them in this section, except
where the context clearly indicates a different meaning:

(2) "Business" means any activity engaged in by any person,
or caused to be engaged in by him or her, with the object
of private or public gain, benefit, or advantage, either
direct or indirect. Except for the sales of any aircraft,
boat, mobile home, or motor vehicle, the term "business"

shall not be construed in this chapter to include
occasional or isolated sales or transactions involving
tangible personal property or services by a person who does
not hold himself or herself out as engaged in business, but
includes other charges for the sale or rental of tangible
personal property, sales of services taxable under this
chapter, sales of or charges of admission, communication
services, all rentals and leases of living quarters, other
than low-rent housing operated under chapter 421, sleeping
or housekeeping accommodations in hotels, apartment houses,
roominghouses, tourist or trailer camps, and all rentals of
or licenses in real property, other than low-rent housing
operated under chapter 421, all leases or rentals of or
licenses in parking lots or garages for motor vehicles,
docking or storage spaces for boats in boat docks or
marinas as defined in this chapter and made subject to a
tax imposed by this chapter

(10) "Lease," "let," or "rental" means leasing or renting
of living quarters or sleeping or housekeeping
accommodations in hotels, apartment houses, roominghouses,
tourist or trailer camps and real property, the same being
defined as follows:

(i) "License," as used in this chapter with reference to
the use of real property, means the granting of a privilege
to use or occupy a building or a parcel of real property
for any purpose.

(12) "Person" includes any individual, firm, copartnership,
joint adventure, association, corporation, estate, trust,
business trust, receiver, syndicate, or other group or
combination acting as a unit and also includes any
political subdivision, municipality, state agency, bureau,
or department and includes the plural as well as the
singular number....

Section 212.031, F.S., provides in pertinent 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....

RESPONSE

Section 212.031(1)(a), F.S. states 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
real property..." unless such property is specifically within an
exemption. Section 212.02(12), F.S., defines "person" to
include political subdivisions and municipalities. Section
212.02(2), F.S., defines "business" as "any activity engaged in
by any person, or caused to be engaged in by him or her, with
the object of private or public gain, benefit, or advantage,
whether direct or indirect...." Therefore, a municipality, as a
person, may engage in the business of licensing any property it
owns, which is a taxable privilege.

As stated in your letter, there are two relevant cases. In
Lloyd Enterprises, Inc. v. Department of Revenue, 651 So.2d 735
(Fla. 5th DCA 1995), the Fifth District Court of Appeal found
that a "license agreement" for conducting business on New Smyrna
Beach between Volusia County and a Concessionaire was not
taxable. The Lloyd Court specifically held that Volusia County
did not enter into the business of renting, leasing, or
licensing real property because Volusia was acting in accordance
with an ordinance regulating the County's duties in maintaining
the beach and the County was merely the public trustee of the
beach, which was owned by the State of Florida.

Based on these two key facts, the holding in Lloyd was
distinguished by the Third District Court of Appeal in IPC
Sports, Inc. v. Department of Revenue, 829 So.2d 330 (Fla. 3rd
DCA 2002). First, Dade County and IPC had voluntarily entered
into a license agreement allowing IPC for the exclusive use of
the property, whereas the Lloyd "license agreement" was mandated
by a county ordinance. Second, Dade County owned the subject
real property in fee simple. Thus, the IPC Court held Dade
County was engaging in the business of granting a license to use
real property to IPC and tax was due pursuant to Section
212.031(1)(a), F.S.

Applying these holdings to the facts of your letter, the
Agreement between the Taxpayer and the Concessionaire is a
taxable license to use real property. Pursuant to Section
212.031, F.S., the Taxpayer is a person engaged in the business
of granting a license for the use of real property.
Specifically, the Taxpayer and the Concessionaire voluntarily
entered into the Agreement via a formal proposal process for the
license of the real property. There was no city ordinance or
other municipal mandate requiring the Agreement. Furthermore,
the Taxpayer, like Dade County in IPC and unlike Volusia County
in Lloyd, owns the subject real property in fee simple and can
legally enter into leases or licenses as the owner thereof.

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,

Sebrina L. Wiggins
Attorney

Technical Assistance and Dispute Resolution
(850) 488-6386

Ctrl# 58038
Enclosure

FOOTNOTE 1. On Page 8 of the Proposal, the amount proposed is
$2,500. While not significant to the issues raised in this
letter, the correct amount as negotiated by the parties
subsequent to submittal of the Proposal but prior to execution
of the agreement is $2.650, plus applicable sales tax.

FOOTNOTE 2. Concessionaire is responsible for any tax that is
due on payments made by Concessionaire to the (Taxpayer). As a
result, the (Taxpayer) is urging no particular determination
with regard to the taxability of such payments. The
(Taxpayer's) primary purpose in sending this request is to
resolve this issue.