How did Florida tax annual and tournament fees charged by a junior golf tour, host-course charges, and player gifts?

Plain-English summary

The organizer charged annual tour membership fees and separate flat fees for junior golf tournaments. The tournament charge covered competitive play, greens fees, practice balls, lunch, shuttle service, trophies, gifts, and other services, while spectators paid no admission.

Florida treated the annual and tournament participation fees as taxable admissions. The organizer also had to pay tax on the host course's charges, including greens fees, but could claim a credit on its sales-tax return for admission tax previously paid to the host.

Trophies, gifts, meals, drivers, clubs, wedges, and other items bought for participants were separate taxable purchases. Tax paid on those tangible items could not be credited against the admissions tax.

What this means for you

Bundling play, meals, prizes, and services into one tournament fee did not remove the admissions tax. Credits were limited to tax paid on the resold admission component, not tax on supplies and awards consumed by the organizer.

Common questions

Were annual membership fees taxable? Yes.

Were tournament participation fees taxable? Yes, including when spectators were admitted free.

Could the organizer credit tax paid to the host course? Yes, for the admission tax associated with the greens fees.

Could it credit tax paid on trophies and gifts? No.

Citations and references

• Fla. Stat. §§ 212.02(1), 212.04(1), and 212.05 and Fla. Admin. Code r. 12A-1.005(3)(j), as discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-028

Original ruling text

SUMMARY
QUESTION: To what extent does sales and use tax apply with respect to the tournament fees
charged by Taxpayer to tour members and for admissions charges paid to the tournament host by
Taxpayer?
ANSWER: Taxpayer must collect the full tax on the tournament fees and annual fees collected
from tour members pay tax to the tournament host for the admission. The Taxpayer is entitled to
a credit on it’s monthly return for the admissions paid to the tournament host. Taxpayer must
pay tax on all of its purchases of all items including meals, trophies, gifts, drivers, clubs, wedges,
and other items received by tour members.

June 22, 2009
XXX
XXX
XXX
Subject: Technical Assistance Advisement 09A-028
Sales and Use Tax
Golf Tournaments
FEI#: XXX
XXX (Taxpayer)
Section 212.04(1), F.S.; Section 212.02(1), F.S.
Section 212.05, F.S.; Rule 12A-1.005(3)(j), F.A.C.
Dear :
This letter is a response to your petition dated February 20, 2009, 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, F.A.C. This response to your
request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.
ISSUE
To what extent is Taxpayer liable for Florida sales and use tax with respect to the fees charged
by Taxpayer to tour members and for charges paid to the tournament host by Taxpayer?
FACTS
Taxpayer operates a school and administers and offers junior amateur golf tournaments. In order
for an individual to participate in a tournament, such individual has to be a tour member. The
Taxpayer charges an annual fee to each tour member. The tour includes several tournaments that
are held at various locations throughout the year. A tour member can select to participate in any
of the tournaments for a flat fee from $250 to $500 per event. The fee is collected in advance of

the tournament and is received by the Taxpayer’s corporate office. The fee allows the
participants to experience playing in an organized, competitive tournament, and it also covers
incidentals such as green fees and awards. Participants also receive practice balls, lunch, shuttle,
and other tournament services. The awards include trophies and vendor-offered equipment,
clothing, and other items. Individual tour participants are required to arrange their own hotel
accommodations and transportation.
The tournament host requires that Taxpayer organize and staff the events that are held at various
locations. This includes planning the tournament, registration of participants, and arranging for
the use of the golf course. Other activities typically done locally near the golf course include
staffing, registration, and on-site support and coordination. A typical tournament lasts two to
three days and requires an additional one to three days for on-site staffing. There are no
admission charges to the spectators.
Taxpayer and participants do not enter into any agreements. Email confirmation with password
and user name is provided to participants so that they may register for events. A sample copy of
an email sent to participants was provided. The participants are entitled to 2 rounds of
tournament golf, range balls used prior to competition, trophies, and gifts provided by Taxpayer
or sponsors. In addition, there are random drawings for drivers, rescue clubs, and wedges.
A copy of one agreement between Taxpayer and a tournament host was furnished. If Taxpayer’s
total number of participants were 52 players or more, then Taxpayer would be entitled to a
shotgun start. The agreement provided for an estimated 90 participants. The agreement
provided for a 7:30 start time from certain holes on the course. The agreement provided a copy
of the estimated event costs. It included estimated billing for two rounds of golf and two lunches
for 90 participants. The billing was for $64 per round per person, plus twelve percent service
charge and sales tax. Meals were included as part of the billing per round. The Taxpayer was
also invoiced for rounds of golf based on the number of participants.
TAXPAYER POSITION
The charges to participants for tournament fees are subject to sales tax, and the charges paid to
the golf course host are a sale for resale.
APPLICABLE STATUTES AND RULES
Section 212.02(1), F.S., provides in part:
(1) The term "admissions" means and includes the net sum of money after
deduction of any federal taxes for admitting a person or vehicle or persons to any
place of amusement, sport, or recreation or for the privilege of entering or staying
in any place of amusement, sport, or recreation, including, but not limited to,
theaters, outdoor theaters, shows, exhibitions, games, races, or any place where
charge is made by way of sale of tickets, gate charges, seat charges, box charges,
season pass charges, cover charges, greens fees, participation fees, entrance fees,
or other fees or receipts of anything of value measured on an admission or
entrance or length of stay or seat box accommodations in any place where there is

any exhibition, amusement, sport, or recreation, and all dues and fees paid to
private clubs and membership clubs providing recreational or physical fitness
facilities, including, but not limited to, golf, tennis, swimming, yachting, boating,
athletic ….
Section 212.04(1)(a), (b), and (c), F.S., provide in part:
(1)(a) It is hereby declared to be the legislative intent that every person is
exercising a taxable privilege who sells or receives anything of value by way of
admissions.
(b) For the exercise of such privilege, a tax is levied at the rate of 6 percent of
sales price, or the actual value received from such admissions, which 6 percent
shall be added to and collected with all such admissions from the purchaser
thereof, and such tax shall be paid for the exercise of the privilege as defined in
the preceding paragraph….
(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.
Section 212.05(1)(a)1.a., F.S., provides:
It is hereby declared to be the legislative intent that every person is exercising a
taxable privilege who engages in the business of selling tangible personal
property at retail in this state, including the business of making mail order sales,
or who rents or furnishes any of the things or services taxable under this chapter,
or who stores for use or consumption in this state any item or article of tangible
personal property as defined herein and who leases or rents such property within
the state.
(1) For the exercise of such privilege, a tax is levied on each taxable transaction
or incident, which tax is due and payable as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of tangible
personal property when sold at retail in this state, computed on each taxable sale
for the purpose of remitting the amount of tax due the state, and including each
and every retail sale.
Rule 12A-1.005(3)(j), F.A.C., provides in part:

(j) Charges made for the privilege of entering or engaging in any kind of activity for
which no admission charge is made to spectators are subject to tax. When spectators are
charged a taxable admission to a game, race, or other sport or recreational event, the
participation or entrance fees are exempt. The purchase of taxable items used by the
sponsoring entity are subject to tax, even though receipts from charges for the
participation or entrance fees are used to make such purchases.

1. EXAMPLE: A private golf club hosts a local tournament and charges $100.00 entry
   fee from all participants with no admission charge made to spectators. The entry fee
   covers the greens fees, cart rental, and a meal for each participant, with the excess being
   used to purchase gifts, gift certificates, and trophies to be given to the winners. The entry
   fee is subject to tax, even if the charge for each item is separately itemized. The purchase
   of gifts, trophies, and other promotional items by the club is subject to tax. If the club is
   donating a gift that it has in its inventory for sale, the club is required to accrue and remit
   the tax on the cost of the gift at the time it is removed from inventory. When the winning
   participants are given gift certificates to be used to purchase merchandise from the club,
   the club is deemed to be selling the merchandise, and it shall collect the tax from the gift
   certificate holders at the time the merchandise is sold.
   RESPONSE
   Section 212.04(1)(a), F.S., provides that every person who sells or receives anything by way of
   an admission is exercising a taxable privilege. The term “admissions” is defined by section
   212.02(1), F.S. The definition specifically includes greens fees and dues and fees paid to clubs
   to play golf. Section 212.04(1)(b), F.S., requires Taxpayer to collect sales tax on charges for
   admissions, including fees paid to play golf. Section 212.04(1)(c), F.S., provides that there is no
   tax-exempt sale for resale of admissions. However, the statute permits a Taxpayer to take a
   credit on its return for tax paid on admissions.
   Taxpayer’s charges to participants are similar to those included in the example provided for Rule
   12A-1.005(3)(j), F.A.C. As provided by the example, Taxpayer is required to collect tax on the
   charges made to the participants, including the annual fee. Taxpayer is required to pay the tax to
   the host club for all charges, including green fees. The tax paid associated with the green fees
   may be credited on the sales tax return.
   When Taxpayer purchases trophies, gifts, drivers, clubs, wedges, and other items, tax is due, as
   required by section 212.05, F.S. No credit is permitted for tax paid regarding these purchases.
   This is because the taxes imposed by section 212.05, F.S., and section 212.04, F.S., are separate
   and discrete taxable privileges. See Florida Hotel and Motel Association, Inc. v. Department of
   Revenue, 635 So.2d, 1044 (Fla. 1st DCA 1994). In that case, the court determined that there was
   no double taxation when both the tax imposed on hotel room rentals provided for by section
   212.03, F.S., and the tax imposed by section 212.05, F.S., on purchases of tangible personal
   property such as furniture, towels, and other items by the hotel for use in room accommodations
   were charged and paid. The court determined the taxes imposed were based on separate and
   discrete taxable privileges.

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 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 Section 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 10 days of the date of this
letter.
Sincerely,

Charles Wallace
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922-4734
CW/
Ctrl# 60516