Were separately charged wireless internet access at a marina and wired in-room internet access for hotel guests subject to Florida communications services tax?

Plain-English summary

The Florida Department of Revenue ruled that the marina and hotel internet-access charges were not subject to communications services tax. Both the wireless dock service and wired in-room service fit the internet-access exclusion in the communications-tax statute.

The operator sold wireless internet access to marina customers who either owned or rented dock space. Customers paid by credit card at daily, weekly, monthly, or annual rates.

Hotel guests received wired internet access in their rooms. The daily charge appeared as a separate line item on the guest's folio, using rates similar to the marina service.

Florida excluded internet access from communications services

Section 202.11 broadly defined communications services as electronic transmission or routing of voice, data, audio, video, information, or signals. But subsection (3)(h) expressly excluded internet access, e-mail, electronic bulletin boards, and similar online computer services.

The ruling also quoted the federal Internet Tax Freedom Act definition. Internet access meant a service enabling users to reach internet content, information, e-mail, and other online services, including proprietary content packaged with that access. Telecommunications services were excluded from the federal definition except when bought, used, or sold by an internet-access provider to provide internet access.

The Department concluded that both customer-facing offerings were nontaxable internet access on the facts presented.

The ruling left provider status and input purchases unresolved

The Department expressly took no position on whether the operator qualified as an internet service provider. It also did not decide whether the operator's purchases of internet access or communications services were taxable.

What this means for you

Hotels and hospitality businesses

Separately charging guests for wired or wireless internet did not turn the charge into taxable communications service under this ruling. The service still had to be internet access as defined by the cited law.

Marinas and property operators

The result applied whether dock customers owned or rented their slips and whether access was sold by the day, week, month, or year.

Tax and procurement teams

Separate the tax analysis for customer revenue from the analysis of broadband, network, or communications inputs purchased from providers. This ruling decided only the customer charges.

Common questions

Q: Was marina Wi-Fi subject to communications services tax?
A: No, on the described facts.

Q: Was wired hotel-room internet subject to the tax?
A: No.

Q: Did billing internet as a separate hotel-folio line make it taxable?
A: No. The Department still treated it as excluded internet access.

Q: Did the ruling decide whether the operator was an ISP?
A: No.

Q: Did it decide tax on the operator's own internet-service purchases?
A: No. That issue was expressly left open.

Citations and references

• Fla. Stat. § 202.11(3)(h) — internet access and similar online services excluded from communications services
• Internet Tax Freedom Act § 1101(d)(3)(D), 47 U.S.C. § 151 note — federal internet-access definition quoted in the ruling
• Internet Tax Non-Discrimination Act, Pub. L. No. 108-435 — amendments referenced by the Department

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 05A19-001

Original ruling text

SUMMARY
QUESTION: Taxpayer has asked whether charges for wireless Internet access to customers at a marina and wired inroom Internet access are subject to tax.
ANSWER: Charges to customers for the described wireless or wired Internet access are not subject to
communications services tax.

March 17, 2005

Re: Technical Assistance Advisement (TAA) 05A19-001
XXX [hereinafter "Taxpayer"]
Communications Services Tax - Taxability of Sales of Internet access
Section: 202.11, Florida Statutes (F.S.)
Dear:
This is a response to your letter of December 6, 2004, requesting a Technical Assistance Advisement (TAA) regarding
the above-referenced matter. This response to your request constitutes a TAA under Chapter 12-11, Florida
Administrative Code (F.A.C.), and is issued to you under the authority of Section 213.22, Florida Statutes (F.S.).
FACTS
In your letter, you stated that:
Taxpayer provides Internet access to customers located at its dock marina and its hotel guests. Customers at the
dock marina may own the dock space or rent the dock space from the owners. These customers typically pay for the
wireless Internet access using a credit card. The Internet access is sold at daily, weekly, monthly, and annual rates.
Hotel guests are provided wired in-room Internet access that is billed daily to the customer's folio as a line item using
rates similar to those charged for the marina Internet access.
REQUESTED ADVISEMENT
You have asked whether charges for wireless Internet Access to customers at the marina and wired in-room Internet
Access to hotel guests by the Taxpayer are subject to tax in Florida.
APPLICABLE LAW
The following statutory and administrative provisions are relevant to the issues under advisement:

Section 202.11, F.S., provides the following definitions, in pertinent 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. The term does not include:

(h) Internet access service, electronic mail service, electronic bulletin board service, or similar on-line computer
services.
The Internet Tax Freedom Act and the amendments made by the Internet Tax Non-Discrimination Act (Public Law
108-435) are codified in 47 U.S.C.S. 151 note 1. Section 1101(d)(3)(D) of the Internet Tax Freedom Act, as amended
and codified in the note, provides the following definition of Internet access, in pertinent part:
Sec. 1101. Moratorium.
(d) Exception to the Moratorium.(3) Definitions.-In this subsection:
(D) Internet access. The term "Internet access" means a service that enables users to access content, information,
electronic mail, or other services offered over the Internet, and may also include access to proprietary content,
information, and other services as part of a package of services offered to users. The term "Internet access" does not
include telecommunications services, except to the extent such services are purchased, used, or sold by a provider of
Internet access to provide Internet access.
DETERMINATION
Charges to customers for wireless or wired Internet access, as described in your documentation, are not subject to
communications services tax.
Please be aware that this Technical Assistance Advisement does not take any position regarding whether Taxpayer is
considered to be an Internet Service Provider and, if so, whether any of Taxpayer's purchases of Internet access
services or communications services are subject to tax in Florida.
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 requests 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 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 you have any questions or concerns regarding the requested information, please feel free to contact me at (850)
922-4727.
Sincerely,
Jennifer J. Silvey
Senior Attorney
Technical Assistance and Dispute Resolution
Ctrl No: 62316
Enclosure
/hardcopy to follow