Could a travel agent sell lump-sum vacation packages without collecting additional tax on the package price?

Plain-English summary

A registered seller of travel planned lump-sum packages containing transportation, admissions, and other travel benefits. It bought every component from independent providers and paid the applicable sales tax to those providers.

Florida found the proposed package sales satisfied the travel-package rule. The package had at least two components, the travel agent provided none itself, taxable components were taxed when purchased, and no component price was separately itemized to the customer.

The taxpayer also had to maintain its agency arrangements, occupational licensing, seller-of-travel registration, bonding or security, and other statutory compliance. Each prearranged package had to continue including qualifying transportation.

What this means for you

The lump-sum package treatment is conditional. A travel seller must source all components from other providers, pay component-level tax, avoid price itemization, and maintain the required travel-industry status and compliance.

Common questions

Could the travel agent provide one package component itself? No. The ruling required all components to be purchased from third parties.

Could component prices be separately itemized? No. The customer had to receive a lump-sum package price.

Was tax ignored entirely? No. The travel agent had to pay tax to vendors on every taxable component.

Citations and references

• Fla. Stat. § 212.04(1)(c)-(d) (admissions and qualifying travel packages)
• Fla. Admin. Code r. 12A-1.005(6) (vacation packages sold by travel agents)
• Fla. Stat. § 559.927 (seller-of-travel definitions)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06A-006

Original ruling text

SUMMARY:
QUESTION: Whether the Taxpayer's amenities packages are subject to the sales tax when sold?
ANSWER - Based on Facts Below: All package benefits were used by travelers within the travel industry. The
Taxpayer's packages include the tax for all taxable components when purchased. The package component prices are
not separately itemized but charged as a lump sum. The packages include two or more components including at least
admissions and transportation in all components. Taxpayer's activities are as a travel agent and subject to penalties
imposed by Chapter 559, F.S.

April 18, 2006

Subject: Technical Assistance Advisement 06A-006
Sales and Use Tax
XXX (Parent)
FEI#: XX
XXX (Taxpayer)
FEI#: XX
Sections 212.04(1)(c) and (d), F.S.
Section 559.927, F.S.
Rule 12A-1.005(6), F.A.C.
Dear:
This response is in regard to your petition requesting the Department's issuance of a Technical Assistance
Advisement pursuant to s. 213.22, F.S., and Chapter 12-11, F.A.C., regarding the above referenced matter.
ISSUE
The issue is whether the tax must be collected on the taxpayer's package sales.
FACTS
The taxpayer will enter into agreements with XXX companies to sell packages which include transportation,
admissions, and XXX. The admissions include admissions to XXX The transportation consists of XXX that are
provided by independent vendors. XXX.
The taxpayer has been registered as a "Seller of Travel" with the Department of Agriculture and Consumer Services
("DACS"). The taxpayer purchases all components of the packages sold from independent providers. Your letter
provides that the agreements with the providers currently require that the taxpayer pay the tax to the provider on all

purchases of taxable components. XXX.
TAXPAYER POSITION
Taxpayer provides "tourist-related services" and, therefore, qualifies as a "seller of travel" under this definition.
Taxpayer has, as required under section 559.928(1), Florida Statutes, applied for registration as a seller of travel with
DACS.... A copy of the registration license is attached to this request.
Taxpayer provides transportation services with its XXX, separately states and pays sales tax on its taxable purchases
from vendors and is registered with DACS as a seller of travel. Therefore, all conditions for exemption under section
212.04(1)(d), F.A.C., are fully satisfied. A copy of Taxpayer's contract is attached to this request. Upon receipt of a
favorable response to this ruling request, Taxpayer intends to replace all of its existing contracts with this contract.
This request is limited to the provision of XXX by Taxpayer as set forth in this revised agreement.
APPLICABLE STATUTES AND RULES
Section 212.04(1)(c) and (d), F.S., provides:
(c) The provisions of this chapter that authorize a tax-exempt sale for resale do not apply to sales of admissions.
However, if a purchaser of an admission subsequently resells the admission for more than the amount paid, the
purchaser shall collect tax on the full sales price and may take credit for the amount of tax previously paid. If the
purchaser of the admission subsequently resells it for an amount equal to or less than the amount paid, the purchaser
shall not collect any additional tax, nor shall the purchaser be allowed to take credit for the amount of tax previously
paid.
(d) No additional tax is due on components incorporated as part of a package sold by a travel agent if the package
includes two or more components such as admissions, transient rentals, transportation, or meals; if all of the
components were purchased by the travel agent from other parties and any sales tax due on such purchases was
paid; and if there is no separate itemization of the admission, transient rental, transportation, meal, or other
components in the sales price of the package. This paragraph does not apply if the actual price charged for a
component by the dealer to a travel agent is less than the price charged to unrelated parties under normal industry
practices and the dealer and the travel agent are members of the same controlled group of corporations for federal
income tax purposes.
Section 559.927, F.S., provides in part the following:
(1) "Accommodations" means any hotel or motel room, condominium or cooperative unit, cabin, lodge, or apartment;
....
(2) "Contract" means any contract, certificate, reservation request or confirmation form, membership application or use
agreement, license, or reservation confirmation whereby the purchaser obtains the right to benefits and privileges of
the prearranged travel or tourist service, or to a vacation certificate, or any such other document, writing, or form

committing the seller of travel to provide travel services or privileges pertaining to reservations, tour or travel
arrangements, and accommodations....
(4) "Independent agent" means a person who represents a seller of travel by soliciting persons on its behalf, who has
a written contract with a seller of travel that is operating in compliance with this part and any rules promulgated
thereunder, who does not receive a fee, commission, or other valuable consideration directly from the purchaser for
the sale of travel, who does not at any time have any unissued ticket stock or travel documents in his or her
possession, and who does not have the ability to issue tickets, vacation certificates, or any other travel documents.
(5) "Offer for sale" means direct or indirect representation, claim, or statement or making an offer or undertaking, by
any means or method, to arrange for, provide, or acquire travel reservations or accommodations, tickets for domestic
or foreign travel by air, rail, ship, or other medium of transportation, or hotel and motel accommodations or sightseeing
tours by a seller of travel who maintains a business location in Florida or who offers to sell to persons in Florida.
(6) "Prearranged travel, tourist-related services, or tour-guide services" includes, but is not limited to, car rentals,
lodging, transfers, and sightseeing tours and all other such services which are reasonably related to air, sea, rail,
motor coach, or other medium of transportation, or accommodations for which a purchaser receives a premium or
contracts or pays prior to or after departure....
(7) "Purchaser" means the purchaser of, or person otherwise entitled to receive, prearranged travel, tourist-related
services, or tour-guide services, for a fee or commission, or who has acquired a vacation certificate for personal use....
(10) "Seller of travel" means any resident or nonresident person, firm, corporation, or business entity who offers for
sale, directly or indirectly, at wholesale or retail, prearranged travel, tourist-related services, or tour-guide services for
individuals or groups, including, but not limited to, vacation or tour packages, or vacation certificates in exchange for a
fee, commission, or other valuable consideration....
Section 559.928(4) and (5), F.S., provides:
(4) Any person applying for or renewing a local occupational license to engage in business as a seller of travel must
exhibit a current registration certificate from the department before the local occupational license may be issued or
reissued.
(5) Each contract of a seller of travel must include the phrase " (NAME OF FIRM) is registered with the State of
Florida as a Seller of Travel. Registration No."
Section 559.935(1)(d) and (e), F.S., provides:
(1) This part does not apply to: ....
(d) Hotels, motels, or other places of public accommodation selling public accommodations, or employees of such
hotels, motels, or other places of public accommodation, when engaged solely in making arrangements for lodging,
accommodations, or sightseeing tours within the state, or taking reservations for the traveler with times, dates,

locations, and accommodations certain at the time the reservations are made, provided that hotels and motels
registered with the Department of Business and Professional Regulation pursuant to chapter 509 are excluded from
the provisions of this chapter;
(e) Persons involved solely in the rental, leasing, or sale of residential property....
Section 559.8335, F.S., provides in part:
It is a violation of this part for any person:
(1) To conduct business as a seller of travel without registering annually with the department unless exempt pursuant
to s. 559.935.
(2) To conduct business as a seller of travel without an annual purchase of a performance bond or establishment of a
letter of credit or certificate of deposit in the amount set by the department unless exempt pursuant to s. 559.935.

(8) Knowingly to sell or market admissions tickets to theme or amusement parks, sporting events, concerts, theater
productions, or other entertainment events, in excess of $1 above the retail admission price charged by the original
seller of said tickets, unless said tickets are part of a prearranged travel package which includes transportation or
accommodations services, are being resold on behalf of the original seller of said tickets, and the seller of travel
provides either a Florida seller of travel registration number or an Airlines Reporting Corporation agency code number
in each advertisement that is placed in newspapers circulated primarily in Florida. When any original seller of tickets
provides a seller of travel with tickets in bulk, the seller of travel shall be deemed to be reselling the tickets on behalf
of the original seller.
Section 817.36, F.S., provides:
(1)(a) Whoever shall offer for sale or sell any ticket good for passage or accommodations on any common carrier in
this state and request or receive a price in excess of $1 above the retail price charged therefor by the original seller of
said ticket shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.
(b) The provisions of this subsection shall not apply to travel agencies that have an established place of business in
this state, which place of business is required to pay state, county, and city occupational license taxes.
(2)(a) Whoever shall offer for sale or sell any ticket good for admission to any sporting exhibition, athletic contest,
theater, or any exhibition where an admission price is charged and request or receive a price in excess of $1 above
the retail admission price charged therefore by the original seller of said ticket shall be guilty of a misdemeanor of the
second degree, punishable as provided in s. 775.082 or s. 775.083.
(b) The provisions of this subsection shall apply to travel agencies that have an established place of business in this
state, which place of business is required to pay state, county, and city occupational license taxes, unless such
agencies are registered sellers of travel pursuant to part XI of chapter 559 and adhere to the restriction of selling said

tickets as part of the travel packages specified in that part, and such travel agencies are reselling said tickets on
behalf of the original sellers of said tickets. When any original seller of tickets provides a travel agency with tickets in
bulk, the travel agent shall be deemed to be reselling the tickets on behalf of the original seller.
Section 205.1971, F.S., provides:
Sellers of travel; consumer protection.--No county or municipality shall issue or renew an occupational license to
engage in business as a seller of travel pursuant to part XI of chapter 559 unless such business exhibits a current
registration or letter of exemption from the Department of Agriculture and Consumer Services.
Rule 12A-1.005(6), F.A.C, provides:
(6) SALES OF VACATION PACKAGES.
(a) For purposes of this subsection, a "vacation package" means a bundle consisting of two or more components,
such as admissions, transient rentals, transportation, or meals. Coupon books, maps, or other incidental items, that
are provided free of charge as part of a vacation package are not considered "components" for purposes of this
subsection.
(b) Tax is due on the purchase of taxable components of a vacation package at the time of purchase. No additional
tax is due on the components that are incorporated into a vacation package and sold by a travel agent, when all of the
following conditions are met:

1. The vacation package sold by the travel agent includes two or more components;
2. There is no separate itemization of the sales price of the package for the admission, transient rental, transportation,
   meal, or any other component of the vacation package; and
3. All components of the vacation package were purchased by the travel agent from other parties and any sales tax
   due on such purchases was paid at the time of purchase.
   (c) A travel agent who itemizes the sales price of the taxable components of a vacation package must register with the
   Department as a dealer. (See Rule 12A-1.060, F.A.C., Registration). Travel agents who itemize the sales price of the
   taxable components of a vacation package are required to collect tax from the purchaser as follows:
4. When the itemized components are sold for the same amount or less than was paid for each of them, the travel
   agent is not required to collect any additional tax. No credit is allowed for tax paid on the purchase of the taxable
   components.
5. When the itemized components are sold for more than the purchase price of each component, the travel agent is
   required to collect tax on the sales price of the taxable components. The travel agent may take a credit of tax
   previously paid for the taxable components that are separately itemized at a sales price greater than the purchase
   price of the component.

(d) When the seller of components of a vacation package and the purchasing travel agent are members of the same
controlled group of corporations for federal income tax purposes and the amount charged for the component is an
amount less than the price charged to unrelated travel agents under normal industry practices, the related travel agent
is required to itemize the sales price of the components to the purchaser and collect tax on the itemized taxable
components. The travel agent may take a credit of tax previously paid for the taxable components.
Rule 12A-1.066(1)(c)1., FA.C., provides the following:
(c)1. "Agent" is a person appointed by a principal or authorized to act for a principal in a transaction involving the sale
of an item of tangible personal property.
ANALYSIS
In 1991, section 212.04(1), F.S., was amended to add paragraphs (c) and (d). Section 212.04(1)(c), F.S., provides
that there is no tax-free sale for resale of admissions. Section 212.04(1)(d), F.S., permits travel agents in certain
situations to be excluded from the requirement of collection of sales tax on certain sales of admission made by travel
agents when the admission was included in packages sold by the agent in lump sums. Section 212.04(1)(d), F.S.,
provides for a credit of taxes paid on the initial purchase of the admission, which may be offset with the tax collected
on the resale of the admission. Rule 12A-1.005(7), F.A.C. (added in November 1991 amendments; now subsection
(6)), addressed sales of vacation packages sold by travel agents in regard to section 212.04(1)(d), F.S. Section
212.04(1)(d), F.S., permits travel agents selling certain packages priced as a lump sum in certain situations to sell the
packages without the requirement that the tax be collected on the lump sum package. The travel agent may not
provide separate itemization of price for any component within the package. The travel agent must pay the tax to the
sellers of all components of the vacation package that are subject to the tax.
The 1998 amendment regarding section 212.04(1)(d), F.S., requires that the travel agent must purchase all
components from third party vendors. Therefore, the travel agent may not provide any of the components itself. The
components must include items such as admissions, transient rentals, transportation, and meals. All tax due on
taxable components must be paid to the vendors.
Although section 212.04(1)(d), F.S., addresses packages sold by travel agents, Rule 12A-1.005, F.A.C., addresses
what a "vacation package" includes. The term, "vacation package," is not included in the statute. The Rule provides
that a "vacation package" includes a bundle consisting of two or more components.
Chapter 212, F.S., does not provide a definition of "travel agent." Therefore the common meaning is applied. The
term, "travel agency," includes, "(1) A business that attends to the details of transportation, itinerary, and
accommodations for travelers; (2) An agency that arranges personal travel." The American Heritage® Dictionary of
the English Language, Fourth Edition Copyright © 2000 by Houghton Mifflin Company; WordNet ® 2.0, © 2003
Princeton University. The term "agent" means, "A person authorized by another to act for him, one entrusted with
another's business. One who represents and acts for another under the contract or relation of agency. One who
undertakes to transact some business, or to manage some affair, for another, by the authority and on account of the

latter, and to render an account of it." Black's Law Dictionary (5th edition). Rule 12A-1.066(1)(c)1., F.A.C., defines the
term "agent" to include, "a person appointed by a principal or authorized to act for a principal in a transaction involving
the sale of an item of tangible personal property."
Based on these common meanings, a "travel agent" for purposes of section 212.04(1)(d), F.S., includes a party who
arranges for a travel or vacation package on the behalf of the traveler. It could also include a person who sells travel
or related packages on the provider’s behalf. The parties creating the alleged agency must both intend to create such
an arrangement.
Chapter 88-363, L.O.F., created the term "seller of travel," which is currently provided for by section 559.927(10), F.S.
The law regulates "sellers of travel" by requiring registration, obtaining performance bonds, submission of certain
information, payment of fees, and by maintaining certain records. Section 6, Chapter 90-231, L.O.F., created
paragraph (8) to section 559.927, F.S. The current version is provided for by section 559.9335(8), F.S. Section 7 of
the law created section 817.36, F.S., of which the current version is referenced above. When section 817.36, F.S.,
and section 559.8335(8), F.S., are applied in light of each other, criminal penalties apply when admissions are resold
above the retail price, unless a travel agent sells the admissions as part of a prearranged travel package that includes
either transportation or accommodations. The travel agent must register as a seller of travel and comply with the
provisions of the Seller of Travel Act and must also obtain the appropriate occupational licenses as a seller of travel.
The occupational license cannot be issued until the registration requirements of section 559.928, F.S., regarding
sellers of travel are satisfied. These provisions are not inconsistent to the application of section 212.04(1)(d), F.S.,
which was enacted shortly after the enactment of Chapter 90-231, L.O.F. Although, there are no references to
Chapter 559, F.S., in the bill history when section 212.04(1)(d), F.S., was enacted, the bill history regarding section
212.04(1)(c), F.S., referred to the practice of discounting tickets to resellers.
Although the purpose of the creation of the seller of travel provisions was in response to complaints by the traveling
public, the definition does address more types of businesses than just travel agents. Also, as provided by section
559.8335(8), F.S., and section 817.36, F.S., it is illegal for travel agents selling packages to not register as a "seller of
travel." As such, licensure or registration pursuant to section 559.927(10), F.S., is not conclusive as to whether a
business is a travel agent for purposes of section 212.04(1)(d), F.S. However, if a person is registered as a "seller of
travel," the Department will consider this as a factor in light of all facts present including other evidence of the intent of
a particular business to be a travel agent. In addition, the Department will review the occupational licenses to
determine if the activities reported to the local authorities are consistent to a travel agent's. Based on the above
information and the common meaning of the terms "travel agent" and "travel agency," the Department will consider
whether a person is a travel agent on a case by case basis.
As provided by section 559.927(7), F.S., the term "purchaser" is typically limited to the person who is traveling. Prior to
1995, the term "traveler" was used with essentially the same definition. The term "purchaser" can include more parties
than the typical "traveler." For example, the purchaser conceivably might include the buyer of a "tourist-related
service" from a wholesaler who is a seller of travel. The person intended to receive the consumer protection is
ultimately the traveling public. Section 559.927(6), F.S., provides that the "tourist-related services" are considered to
be reasonably related to transportation. As such, the travel agent might typically be selling the packages so that the
end user is the traveler and the product sold reasonably relates to travel or otherwise is a product included by section

559.927(6), F.S., however the package might be sold to a purchaser in a wholesale transaction.
The packages sold by the travel agent must be the type provided for by section 212.04(1)(d), F.S., and Rule 12A1.005(6), F.A.C. The package must satisfy all requirements provided for by section 212.04(1)(d), F.S., and Rule 12A1.005(6), F.A.C. The package must consist of two or more components. The components must be purchased from
persons other than the travel agent. The travel agent must purchase all of the components and may not provide any of
the components. The tax must be paid to the provider of the taxable components. Incidental items are not considered
a component of a package. The prices of the components may not be separately itemized in the agreement or bills.
The package prices must be in a lump sum.
RESPONSE
Based on the specific facts in this instance, the taxpayer's sales as provided by the proposed agreement satisfy
section 212.04(1)(d), F.S. XXX and would be subject to the civil penalties and damages for failure to provide the XXX
on behalf of the traveling public as provided by the "Seller of Travel Act." The taxpayer must possess the appropriate
occupational license and remain in compliance with section 817.36, F.S. XXX. The taxpayer must continue to satisfy
all performance bonding, security, and other requirements for sellers of travel. The taxpayer must maintain the agency
relationship with the admission providers, as is provided in the current agreements. In addition, based on the
information provided, the taxpayer is primarily XXX 817.36, F.S., will not apply. The packages must continue to
provide for at least one of the previously referenced transportation services in each prearranged packages.
The taxpayer must continue to pay all sales taxes on purchases that are subject to the taxes. The taxpayer must
prove that the sales taxes are paid on all components to the component provider. This includes all admissions, XXX.
As required by section 212.04(1)(b), F.S., the tax on admissions must be separately stated on the invoices or bills.
XXX.
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 advisement 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,

Charles Wallace
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922-4734
CW/LP
Ctrl# 19869