Were movable floating docks tangible personal property, and could a marina buy them exempt as property held exclusively for lease?

Plain-English summary

A marina used floating docks that could move vertically and horizontally and could be detached or relocated. Chains connected them to removable concrete blocks resting on the waterway floor, while utility systems used flexible, disconnectable wiring and plumbing.

Florida classified the docks as tangible personal property rather than real-property fixtures because they were not permanently attached. Even so, the marina could not buy them tax-free as property held exclusively for lease.

Customers paid for licenses to use docking or storage space, not leases of the floating docks themselves. Florida treated the marina's dock purchase and its rental of boat space as two distinct taxable privileges: the dock purchase was taxable under section 212.05, and the slip or storage charge was taxable under section 212.03(6).

What this means for you

Classifying an asset as tangible personal property does not automatically make a lease-purchase exemption available. The business must actually lease that property; providing a separately taxed space or storage service is different.

Common questions

Why were the docks tangible personal property? They were movable, used removable anchors, and had soft-wired and soft-plumbed connections rather than permanent attachment.

Could the marina purchase the docks exempt for leasing? No. Customers licensed docking and storage space rather than leasing the docks.

Were customer slip charges taxable? Yes. Section 212.03(6) separately taxed boat docking and storage space.

Was taxing both transactions duplicate tax? The ruling said no, because the dock purchase and the licensing of docking space were separate taxable privileges.

Citations and references

• Fla. Stat. § 212.06(14) (real property and fixtures)
• Fla. Stat. § 212.05 (purchase of tangible personal property)
• Fla. Admin. Code r. 12A-1.071(2)(a) (property purchased exclusively for leasing)
• Fla. Stat. § 212.03(6) (boat docking and storage spaces)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06A-036

Original ruling text

SUMMARY
QUESTION: Are the floating docks described classed as tangible personal property, and if so, whether they can be
purchased exempt from tax as exclusively for leasing purposes.
ANSWER - Based on Facts Below: The floating docks described are classed and tangible personal property. The
floating dock is not permanently attached or anchored to the realty. The docks are anchored to cement blocks resting
of the floor of the waterway; they are not attached to pilings sunk into the floor of the waterway. The wiring and
plumbing is described as soft-wired and soft-plumbed rather than hard-wired and hard-plumbed. The docks cannot be
purchased exempt from tax as exclusively for leasing purposes. When Taxpayer provides docking or storage space
for boats at its marina, it is not leasing tangible personal property. Taxpayer's agreement is for the license of dock
space, and in the agreement Taxpayer agrees to store the customer's boat. Section 212.03(6), Florida Statutes,
imposes tax on the lease of docking or storage space for boats as a separate privilege from the lease of tangible
personal property.

November 15, 2006

Re: Technical Assistance Advisement 06A-036
Sales and Use Tax - Floating Docks
Sections: 212.03, 212.031, 212.05, 212.06, F.S.Rules: 12A-1.071, F.A.C.
Petitioner: xxx, LP (herein "Taxpayer")
FEI: xx
Dear :
This letter is a response to your petition dated July 17, 2006, for the Department's issuance of a Technical Assistance
Advisement ("TAA") concerning the above referenced party and matter. Your petition has been carefully examined
and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, Florida
Administrative Code. This response to your request constitutes a TAA and is issued to you under the authority of s.
213.22, Florida Statutes.
FACTS
The petition sets forth the following facts:
[Taxpayer] is a foreign limited partnership qualified to conduct business in the state. [Taxpayer] owns and operates a
xxx in... Florida, where it xxx space on a daily, monthly, or annual basis for xxx ranging from xx' to xxx' feet [sic].
[Taxpayer] enters into xxx agreements with its customers for all xx upon check-in at the xxx facility.... [Taxpayer] is a
registered Florida sales tax dealer and collects and remits sales tax on its leases of xx slips.

[Taxpayer] uses a floating xxx system for purposes of leasing the xxx slips to its customers. The floating xxx are not
permanently attached to the adjacent realty and can be adjusted, detached, removed, and relocated. The xxx are held
in place by anchor chains attached to cement blocks resting on the watercourse bed which can be removed and
relocated. In addition, the xxx are attached to the adjacent realty by trailer hitch. Each floating xxx consists of xxx
structure and xxx, high density xxx, anchor xxx, xxx, xxx, and float xxx filed with xxx foam. Although the floating xxx
are attached together by xxx screws, the docks are able to move vertically and horizontally. Thus, the floating xxx may
be moved by boats putting pressure on them or from rising storm surge. The xxx do contain electric, telephone, fire
protection, fresh water, sewer, or cable television or wiring systems. However, such wirings or systems are flexible
soft connections and can be disconnected for purposes of moving the floating xxx....
REQUESTED ADVISEMENT
Taxpayer requests advice whether the floating xxx described are classed as tangible personal property, and if so,
whether they can be purchased exempt from tax as exclusively for leasing purposes.
LAW AND DISCUSSION
I. Tangible Personal Property vs. Real Property
Section 212.06(14), Florida Statutes, provides guidance in determining whether something is properly classed as an
improvement to real property, and it includes the following pertinent definitions:
(a) "Real property" means the land and improvements thereto and fixtures and is synonymous with the terms "realty"
and "real estate."
(b) "Fixtures" means items that are an accessory to a building, other structure, or land and that do not lose their
identity as accessories when installed but that do become permanently attached to realty.... (Emphasis Supplied)
The facts and information of the floating dock at issue do not describe an improvement to real property. The floating
dock is not permanently attached or anchored to the realty. The docks are anchored to cement blocks resting of the
floor of the waterway; they are not attached to pilings sunk into the floor of the waterway. The wiring and plumbing is
described as soft-wired and soft-plumbed rather than hard-wired and hard-plumbed. The attachment(s) of the floating
dock to the realty does not appear to be a permanent attachment as required for an item to be classed as an
improvement to real property. The floating docks at issue are properly classed as tangible personal property.
II. Lease of Docking Space and Taxability of the Purchase of the Floating Dock
Section 212.05, Florida Statutes, generally imposes tax on the sale or lease of tangible personal property. Rule 12A1.071(2)(a), Florida Administrative Code, allows dealers to purchase tangible personal property exempt from tax when
that tangible personal property is purchased exclusively for leasing purposes.
Section 212.03(6), Florida Statutes, imposes tax on the "lease[] or rent[al of] docking or storage spaces for boats in
boat docks or marinas."

When Taxpayer provides docking or storage space for boats at its marina, it is not leasing tangible personal property.
Taxpayer's agreement is for the license of dock space, and in the agreement Taxpayer agrees to store the customer's
boat. Section 212.03(6), Florida Statutes, imposes tax on the lease of docking or storage space for boats as a
separate privilege from the lease of tangible personal property. The taxability of the lease of docking space is not
within the purview of the taxability of the lease of tangible personal property. By imposing tax on the lease of docking
space in a separate statutory section from the taxation of leases of tangible personal property (and taxation of the
lease of real property, which is found in section 212.031, Florida Statutes), it is clear that the legislative intent was to
tax the lease of docking space at marinas regardless of the taxability of the purchase of tangible personal property in
section 212.05, Florida Statutes (the dock itself), or the lease of the real property in section 212.031, Florida Statutes
(again, the dock itself).
The case law provides clearly that when tax is imposed on two separate taxable privileges, such as the purchase of
tangible personal property in section 212.05, Florida Statutes, and the lease of docking space in section 212.03,
Florida Statutes, no duplication of tax occurs. See Florida Hotel and Motel Association, Inc. v. Department of Revenue
, 635 So.2d 1044 (Fla. 1DCA 1994) (holding that no duplication of tax occurs because the taxes at issue are levied on
two separate taxable privileges). See also Ryder Truck Rental, Inc. v. Bryant, 170 So.2d 822 (Fla. 1964), (holding that
it is equally well-settled that no duplicate taxation occurs as long as the sales or use tax is imposed upon separate
taxable privileges.)
CONCLUSION
Since Taxpayer's purchase of the floating dock is a separate and distinct taxable privilege from Taxpayer's lease of
docking and storage space, Taxpayer cannot purchase the floating dock exempt from tax as purchased exclusively for
lease. Taxpayer's purchase of the floating dock is subject to tax pursuant to section 212.05, Florida Statutes, and
Taxpayer's lease of docking and storage space at its marina is subject to tax pursuant to section 212.03, Florida
Statutes.
This response constitutes a Technical Assistance Advisement under Section 213.22, Florida Statutes, 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, Florida Statutes. Our response is predicated upon 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, Florida Statutes, and are subject to disclosure to the public under the conditions of s. 213.22, Florida
Statutes. 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,
Sara D. Faulkenberry
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Control #22510