Were booth rentals at hybrid public-and-trade art and antique shows exempt from Florida commercial-rent tax?

Plain-English summary

Florida ruled that three art and antique fairs qualified as "industry trade shows" under the commercial-rent exemption. The shows catered to the art and antique trades, displayed high-end works, attracted dealers and other industry participants, generated transactions among exhibitors, and fostered later business opportunities.

Their hybrid character did not disqualify them merely because members of the public attended or retail sales occurred. The statute's trade-show exemption did not restrict retail sales at the event.

Because the organizer leased convention or exhibition halls and paid tax on each prime lease, its booth-space subleases to exhibitors were exempt from sales tax under section 212.031(5).

What this means for you

For this exemption, the event's industry purpose, the type of venue, and tax payment on the prime lease all mattered. The ruling did not exempt taxable merchandise sold by exhibitors.

Common questions

Can a show open to the public still qualify? Yes, on these facts.

Were exhibitor booth rentals taxable? No, because the qualifying organizer paid tax on the prime lease.

Did the ruling exempt exhibitors' retail sales? No. It addressed the booth subleases, and the cited law separately required retail sellers to register and collect applicable tax.

Citations and references

• Fla. Stat. §§ 212.031(1)(a), (5) and 212.18(3)(e) and Fla. Admin. Code r. 12A-1.070(7)(b), as discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-037

Original ruling text

SUMMARY
QUESTIONS: Whether Taxpayer’s trade shows are “industry trade shows” within the meaning
of Section 212.031, F.S. If so, whether subleases of booth space to exhibitors at Taxpayer’s
trade shows are exempt from tax pursuant to Section 212.031(5), F.S., where Taxpayer pays tax
on the prime lease of space for these shows.
ANSWERS: Taxpayer’s shows are within the common meaning of “industry trade shows.”
The subleases by Taxpayer to exhibitors are not subject to the tax since the Taxpayer paid tax on
the prime lease, the Taxpayer’s shows are at venues required by section 212.031(5), F.S., and the
shows qualify as “industry trade shows.”
July 8, 2009
XXX
XXX
XXX
Subject: Technical Assistance Advisement 09A-037
Sales and Use Tax
Real Property Rental
FEI#: XXX
XXX (“Petitioner”) (“Taxpayer”)
XXX (“Company A”)
XXX (“Company B”)
XXX (“Trade Show I”)
XXX (“Trade Show II”)
XXX (“Trade Show III”)
Section 212.031(5), Florida Statutes (F.S.); Section 212.18(3)(e), F.S.
Rule 12A-1.070(7)(b), Florida Administrative Code (F.A.C.)
Dear
This letter is a response to your petition dated April 1, 2009, for the Department’s issuance of a
Technical Assistance Advisement (“TAA”) concerning the above referenced parties 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 section 213.22, F.S.
ISSUES

1. Whether Trade Show I, Trade Show II, and Trade Show III, respectively, are “industry trade
   shows” within the meaning of Section 212.031, F.S.
2. Whether subleases of booth space to exhibitors at Trade Show I, Trade Show II, and Trade
   Show III, respectively, are exempt from tax pursuant to Section 212.031(5), F.S., where
   Taxpayer pays tax on the prime lease of space for these shows.

FACTS
Taxpayer is the new owner and operator of certain art and antique shows (Trade Show I, Trade
Show II, and Trade Show III) that were considered by the Department in TAA 02(A)-006 (“2002
TAA”), and previously in an Internal Technical Advice (“2001 ITA”) memorandum issued in
2001. The shows have been renamed since 2002. Taxpayer is principally owned and operated
by the same individuals who formerly owned Company A. Company A was the business
addressed by the 2001 ITA. Company A sold the shows to Company B. Company B was the
business addressed by the 2002 TAA. Taxpayer purchased the shows from Company B.
The request provides that the material facts and law have remained unchanged since the 2001
ITA and 2002 TAA were issued by the Department. All of the shows at issue are operated in the
same manner. The material facts relating to such operation contained in the 2002 TAA, as well
as revealed in all correspondence related to the 2001 ITA, are equally applicable to the current
TAA request.
Taxpayer organizes and sponsors art and antique fairs and expositions in different cites within
Florida. Taxpayer solicits exhibitors and attendees from around the world for its shows.
Taxpayer advertises its shows extensively through a variety of means that include: trade direct
mail; trade publication advertising; electronic direct mail advertising to art dealers; and direct
mail to collectors, architects, decorators, art galleries, antique dealers, and interior designers, as
well as to high-income Florida residents.
Taxpayer solicits exhibitors to display their art and antiques at these shows. These shows cater
to produce trade both within the art and antiques industry and with the general public. These
shows feature high-end paintings, art, sculptures, antique furniture, jewelry, carpets, textiles, rare
books, manuscripts, and similar objects.
Taxpayer leases floor space to these exhibitors. The shows will be held at convention or
exhibition halls. Taxpayer will lease these facilities and pay commercial rental tax to the
landlord.
Taxpayer maintains an extensive Internet site where visitors may register as trade visitors,
professional (art) visitors, or collector visitors. As hybrid trade/public shows, Taxpayer's fairs
and expositions attract a significant number of trade buyers, as well as a large number of dealers,
decorators, and collectors. Taxpayer maintains admissions cards that identify each attendee as a
member of the trade or of the public.
Substantial trade occurs between exhibitors at these shows. At the contemporary art shows,
exhibitors tend to be galleries acting as the selling agent for particular artists. These exhibiting
galleries often exchange bodies of works and/or schedule shows in their galleries for other
galleries' artists in an effort to open up new geographic markets for their artists. At the fine
art/antique shows, exhibitors are marketing high-end works that sell infrequently. These
exhibitors buy and sell artwork among other exhibitors in order to change their respective
inventories so that they will have "fresh" inventory upon their return to their respective gallery
locations and/or bases of operations.

These shows also generate leads for exhibitors to make sales months later, as many of the
attendees are unable to walk into these shows and make purchases of art and antiques of such
high caliber, given the substantial prices.
TAXPAYER POSITION
Taxpayer makes several arguments regarding this issue. Taxpayer contends that the industry
trade show provision of section 212.031(5), F.S., applies to Trade Shows I, II, and III. Taxpayer
notes that the Florida statutes and regulations do not define the term "industry trade show" for
purposes of section 212.031(5), F.S., and further notes that there are no reported cases defining
the term. Taxpayer maintains that the definition of “trade show” provided by Rule 12A1.060(4)(a)2., F.A.C., is inapplicable to the provisions of section 212.031(5), F.S., regarding
“industry trade shows.” The Rule provides that a trade show is a meeting of limited duration of
individuals with organizational ties or similar interests, one of the purposes of which is the
displaying of, and sharing information on, products and services, without a major purpose of
making retail sales of tangible personal property.
Tax statutes must be interpreted in a manner that both avoids arbitrary and inequitable results
and attains the legislative purpose. Mills v. Corash, 249 So.2d 765, 769 (Fla.1st DCA 1971).
Where terms in a statute may be susceptible to different meanings, legislative intent is the guide
to resolving any dispute. E.g., Mikos v. Ringling Bros.-Barnum & Bailey Combined Shows,
Inc., 475 So.2d 292, @295 (Fla. 2d DCA 1985), affd., 497 So.2d 630 (Fla. 1986).
Taxpayer argues that the Legislature intended to apply the industry trade show provision to
hybrid trade/public shows such as boat shows. The industry trade show provision was enacted in
1978 as Senate Bill 269, sponsored by Senator Jack Gordon. Taxpayer notes that in the
legislative committee hearing (as documented in the transcript) for this Bill, Senator Gordon
expressly stated his intention that the measure apply to certain public shows. Furthermore, the
legislative committee reports for Senate Bill 269 support the Legislature's intent to apply this
provision to hybrid trade/public shows due to the tax revenues generated by the attendees, which
would far outweigh the tax not charged on the exhibitors' space.
The Taxpayer states that it is entitled to similar treatment of its hybrid shows. The Department
has a duty to treat similarly situated taxpayers equally. Regal Kitchens, Inc. v. Department of
Revenue, 641 So.2d 158, @ 164 (Fla. 1st DCA 1994). There is no material distinction, factual or
legal, between Taxpayer's art and antique shows and a hybrid trade/public boat show. It is the
very fact of the "industry trade show" provision that puts Florida on a level playing field with
other states that do not impose a commercial rentals tax and allows these shows to attract
vendors and generate substantial taxable sales and other taxable transactions.
Consistent with the legislative intent of section 212.031(5), F.S., Taxpayer's shows likewise
spawn substantial tax revenues for the state and for the respective counties through the taxable
hotel, restaurant, and entertainment business generated by the out-of-state exhibitors and
attendees.

The "industry trade show" provision has also not been limited in application to boat shows.
Taxpayer notes that leading automobile shows and computer shows, as well as boat shows,
conducted at five different locations across Florida, operate under the industry trade show
provision and do not charge tax on rentals of exhibitor space.
Taxpayer also notes that the Department has determined that two similar art shows qualify as
"industry trade shows" under section 212.031(5), F.S. Taxpayer cites TAA 01A-054 and TAA
01A-052. Taxpayer states that in TAA 01A-054, the Department applied the plain and ordinary
meaning of "industry trade show" as "a large display or exhibition that is arranged to arouse
interest or stimulate sales by a group of firms engaged in a business or industry."
The Department also noted that "[t]he exemption does not restrict the convention or trade show
from making retail sales." The plain meaning of "industry trade show" also applies to
Taxpayer’s shows. As determined in TAA 01A-054, these shows are exhibitions of art and
antiques designed to stimulate sales and interest within the industry. In TAA 01A-052, the
Department noted that the "trade show or convention" definition in Rule 12A-1.060, F.A.C.,
does not apply because that rule implements a distinct term used in a different statute that
accomplishes an entirely different legislative purpose.
These rulings show that the Department has applied the industry trade show provision to trade
shows open to the public at which retail sales are made. Taxpayer is entitled to the same
treatment, and it is entitled to application of the industry trade show provision.
REQUESTED ADVISEMENT
The Taxpayer’s subject shows are "industry trade shows" within the meaning of section
212.031(5), F.S., whereby Taxpayer pays tax on its prime lease with the convention center, and
the subleases with the exhibitors are exempt from the tax imposed pursuant to section 212.031,
F.S.
APPLICABLE STATUTES AND RULES
Section 212.031(5), F.S., provides:
(5) When space is subleased to a convention or industry trade show in a
convention hall, exhibition hall, or auditorium, whether publicly or privately
owned, the sponsor who holds the prime lease is subject to tax on the prime lease
and the sublease is exempt.
Section 212.18(3)(e), F.S., provides:
(e) As used in this paragraph, the term "exhibitor" means a person who enters
into an agreement authorizing the display of tangible personal property or services
at a convention or a trade show. The following provisions apply to the registration

of exhibitors as dealers under this chapter:

1. An exhibitor whose agreement prohibits the sale of tangible personal property
   or services subject to the tax imposed in this chapter is not required to register as a
   dealer.
2. An exhibitor whose agreement provides for the sale at wholesale only of
   tangible personal property or services subject to the tax imposed in this chapter
   must obtain a resale certificate from the purchasing dealer but is not required to
   register as a dealer.
3. An exhibitor whose agreement authorizes the retail sale of tangible personal
   property or services subject to the tax imposed in this chapter must register as a
   dealer and collect the tax imposed under this chapter on such sales.
4. Any exhibitor who makes a mail order sale pursuant to s. 212.0596 must
   register as a dealer.
   Any person who conducts a convention or a trade show must make their
   exhibitor's agreements available to the department for inspection and copying.
   Rule 12A-1.070(7)(b), F.A.C., provides:
   (7)(b) Notwithstanding the provisions of paragraph (a), when space is subleased
   to a convention or industry trade show in a convention hall, exhibition hall, or
   auditorium, whether publicly or privately owned, the sponsor who holds the prime
   lease is subject to tax on the prime lease and the sublease shall be exempt.
   ANALYSIS
   I. EVENTS THAT ARE “INDUSTRY TRADE SHOWS” FOR PURPOSES OF SECTION
   212.031(5), F.S.
   Section 212.031, F.S., and Rule 12A-1.070, F.A.C., are the controlling provisions of law for the
   lease, rental, or license to use commercial real property. Section 212.031(1)(a), F.S., provides
   that it is a taxable privilege to engage in the business of renting, leasing, letting, or granting a
   license to use commercial real property. In 1978, section 212.031, F.S., was amended to add
   what is currently subsection (5) to provide an exemption from sales tax on subleases of
   convention halls, exhibition halls, or auditoriums, whether publicly or privately owned, when
   used for a convention or industry trade show. The sponsor who holds the prime lease is subject
   to tax on the prime lease. Rule 12A-1.070(7)(b), F.A.C., also addresses this exemption. The
   exemption provided in section 212.031(5), F.S., does not restrict the trade show or convention
   from making retail sales.
   Although the Legislature did not define the terms "convention or industry trade show" for
   purposes of the exemption contained in section 212.031(5), F.S., words of common usage, when
   used in a statute, should be construed in their plain and ordinary sense. Pederson v. Green, 105

So.2d 1 (Fla. 1958). The Webster's Dictionary (Webster's II, New Riverside Dictionary, 1984)
has provided the following definitions:
"Industry" is defined as a branch of manufacture and trade: the electronics
industry.
"Trade" is defined as the people working in or associated with a specified industry
or business.
"Show" is defined as a public exhibition or theatrical presentation.
Here, based on the facts as presented, the subject shows qualify as industry trade shows within
the purview of section 212.031(5), F.S. The shows specifically cater to the art and antique trades
or industries, featuring certain high-end paintings, modern and contemporary art, sculptures, and
antique furniture, jewelry, carpets, textiles, rare books, and manuscripts. These items are
exhibited on display as with an exhibition. The individuals who are invited to attend these shows
are "working in or associated with" the art or antique business or industry. The Taxpayer
represents these shows as trade shows, advertising through a variety of means that include: trade
direct mail; trade publication advertising; electronic direct mail advertising to art dealers; and
direct mail to collectors, architects, decorators, art galleries, antique dealers, and interior
designers.
Additionally, these shows serve a purpose other than for retail sale transactions. New business
opportunities are fostered for exhibitors attending the shows. At the contemporary art shows,
exhibitors tend to be galleries acting as the selling agent for particular artists. These exhibiting
galleries often exchange bodies of works and/or schedule shows in their galleries for other
galleries' artists in an effort to open up new geographic markets for their artists. At the fine
art/antique shows, exhibitors are marketing high-end works that sell infrequently. These
exhibitors buy and sell among themselves in order to freshen their respective inventories.
Therefore, based on the analysis provided herein, Trade Show I, Trade Show II, and Trade Show
III, are “industry trade shows” within the common meaning of the terms “industry trade show.”
The definition of “trade show” provided by Rule 12A-1.060(4)(a)2., F.A.C., only applies to the
registration of exhibitors required by section 212.18(3), F.S., and is not applicable to the booth
rentals in this instance.

II. EXEMPTION FOR BOOTH RENTALS.
Section 212.031(5), F.S., exempts certain real property subleases at an industry trade show to an
exhibitor by an industry trade show sponsor. The sublease includes booth space rentals, as in
this instance. The sponsor subleasing the booth is liable for the tax on the prime lease of the
convention hall, exhibition hall, or auditorium.
In this instance, the Taxpayer is the sponsor of Trade Show I, Trade Show II, and Trade Show
III, which are held at either a convention hall or exhibition hall. Taxpayer will pay the tax on the
prime lease. Also, Trade Show I, Trade Show II, and Trade Show III are industry trade shows.

Therefore, the booth rentals charged by Taxpayer to exhibitors at Trade Show I, Trade Show II,
and Trade Show III are not subject to sales tax.
ISSUES AND RESPONSES
ISSUE #1: Whether Trade Show I, Trade Show II, and Trade Show III, respectively, are
“industry trade shows” within the meaning of Section 212.031, F.S.
RESPONSE: Yes. Based on the facts, law, and analysis as presented, a determination is made
that Trade Show I, Trade Show II, and Trade Show III, respectively, are “industry trade shows”
within the meaning of section 212.031, F.S.
ISSUE #2: Whether subleases of booth space to exhibitors at Trade Show I, Trade Show II, and
Trade Show III, respectively, are exempt from tax pursuant to Section 212.031(5), F.S., where
Taxpayer pays tax on the prime lease of space for these shows.
RESPONSE: Yes. The subleases of booth space to exhibitors of Trade Show I, Trade Show II,
and Trade Show III, respectively, are exempt from sales tax pursuant to section 212.031(5), F.S.
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/
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