Were portions of leased airport property used by an airline excluded from Florida commercial-rent tax?

Plain-English summary

The Department conditionally excluded specific portions of leased airport property from Florida's commercial-rent tax. The exclusion applied only where a certified airline actually used the area, the lessee's payment to the airport authority was made on the airline's behalf, and the area was used exclusively to load or unload passengers or property or to fuel aircraft.

The related airline held an FAA Air Carrier Certificate, so it qualified as an airline for this analysis. The property lessee and its parent did not. The Department directed the taxpayer to the rule identifying qualifying airline areas and emphasized exclusive use.

What this means for you

The exclusion is portion-specific, user-specific, and use-specific. A broader airport or fixed-base-operator function did not automatically exempt the full lease; the certified airline's actual exclusive use had to be established for each area.

Common questions

Was the entire airport lease excluded? No. Only specific qualifying portions could be excluded.

Did a related fixed-base operator count as an airline? Not on these facts. The certified airline qualified; the lessee and parent did not.

What uses qualified? Exclusive airline use for loading or unloading passengers or property, or fueling aircraft, subject to the payment condition described in the TAA.

Citations and references

• Fla. Stat. § 212.031(1)(a)6., (c) and Fla. Admin. Code r. 12A-1.070(1)(a)6., as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-046

Original ruling text

SUMMARY
QUESTION:
Is the portion of the leased premises used by Airline exclusively for the purpose of loading or
unloading passengers or property onto or from aircraft or for fueling aircraft excluded from the
commercial rental sales tax?
ANSWER:
If Airline uses specific portions of the property located at the Airport, and payments by Taxpayer
to Authority for the lease of the real property are being made on behalf of Airline, and the
specific portions of the property are used exclusively for loading or unloading passengers or
property onto or from aircraft or for fueling aircraft, then those specific portions would not be
subject to sales tax.
September 24, 2009
XXX
Re:

Technical Assistance Advisement 09A-046
Airport Lease
Sales and Use Tax
Section 212.031, Florida Statutes (F.S.)
Rule 12A-1.070, Florida Administrative Code (F.A.C.)
XXX (“Taxpayer”)
FEIN: XXX
XXX (“Airline”)
FEIN: XXX

Dear XXX:
This is in response to your letter dated July 23, 2009, requesting this Department’s issuance of a
Technical Assistance Advisement (TAA) pursuant to Section 213.22, F.S., and Rule Chapter 1211, F.A.C., regarding the above referenced matter and parties. An examination of your letter has
established that you have complied with the statutory and regulatory requirements for issuance
of a TAA. Therefore, the Department is hereby granting your request for a TAA.
FACTS
Your letter provides in part:
. . . [Taxpayer], along with XXX XXX XXX and [Airline] are wholly owned entities
of XXX XXX XXX XXX (“Commercial”). . . .
[Taxpayer] has developed approximately XXX acres of airport property leased from,

Technical Assistance Advisement
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and contained with the boundaries of the XXX XXX XXX (“Airport”). These parcels
are conveyed via a long term lease agreement with XXX XXX XXX XXX
(“Authority”) for the express purposes of operating an aviation services company
known as a Fixed Base Operator (FBO) . . . .

The leased parcels accommodate aircraft taxiways, aircraft ramp areas, aircraft
hangars, and a Private Air Terminal facility all designed and constructed by
[Taxpayer] for the purpose of delivering aircraft services in conjunction with the
operation of the FBO. Aviation services provided include the operation and
movement of aircraft, parking, fueling, servicing, maintaining and unloading of
persons and cargo to and from aircraft.
On or about XXX, [Commercial] purchased [Airline] which is classified as an "air
carrier" by the FAA (see attached certificate.) As part of the [Commercial] family,
[Airline] uses the property at the [Airport leased] by [Taxpayer] to load and unload
passengers and freight and to re-fuel its aircraft. Services are also provided to third
party aircraft which are both transient visitors to the airport or domiciled at [Florida
City].

ISSUE
Is the portion of the leased premises used by Airline exclusively for the purpose of loading or
unloading passengers or property onto or from aircraft or for fueling aircraft excluded from the
commercial rental sales tax?
ADVISEMENT REQUESTED
Your letter provides in part:
[T]he payments made by [Taxpayer] to [Authority] should further qualify for the
exclusion from taxable rent based on the provision of Section 212.031(1)(a)7., Florida
Statutes. The areas of [Taxpayer’s] leased property which are used [by Airline] for
"[. . .] the purpose of loading or unloading passengers or property onto or from
aircraft or for fueling aircraft," including "office areas used to process tickets, baggage
processing areas, operations areas used for the purpose of the operational control of an
airline's aircraft, and air cargo areas" can be excluded per the statute and the tax paid
to [Authority should be] adjusted accordingly.
APPLICABLE AUTHORITY
Section 212.031, F.S., provides in part:

Technical Assistance Advisement
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(1)(a) It is declared to be the legislative intent that every person is exercising a
taxable privilege who engages in the business of renting, leasing, letting, or granting
a license for the use of any real property unless such property is:

7. Property used at an airport exclusively for the purpose of aircraft landing or
   aircraft taxiing or property used by an airline for the purpose of loading or unloading
   passengers or property onto or from aircraft or for fueling aircraft.
   Rule 12A-1070(1)(a)6., F.A.C., provides in part:
   (1)(a) Every person who rents or leases any real property or who grants a license to
   use, occupy, or enter upon any real property is exercising a taxable privilege unless
   such real property is:

6.a. Property used at an airport exclusively for the purpose of aircraft landing or
aircraft taxiing or property used by an airline for the purpose of loading or unloading
passengers or property onto or from aircraft or for fueling aircraft. See subsection
(3).
b. Property which is used by an airline for loading or unloading passengers onto or
from an aircraft is exempt. This property includes: common walkways inside a
terminal building used by passengers for boarding or departing from an aircraft,
ticket counters, baggage claim areas, ramp and apron areas, and departure lounges
(the rooms which are used by passengers as a sitting or gathering area immediately
before surrendering their tickets to board the aircraft). Departure lounges commonly
known as VIP lounges, or airport clubs which are affiliated with an airline or a club
which requires a membership or charge or for which membership or usage is
determined by ticket status are not included as property exempt from tax. The lease
or license to use passenger loading bridges (jetways) and baggage conveyor systems
comes under this exemption, provided that the jetways and baggage conveyor
systems are deemed real property.
(I) In order for the jetways and baggage conveyors to be deemed real property, the
owner of these items must also be the owner of the land to which they are attached,
and must have had the intention that such property become a permanent accession to
the realty from the moment of installation. The items shall not be considered real
property if the owner, when the owner is not the airport, retains title to the items after
the purchase/installation indebtedness has been paid in full.
(II) Any operator of an airport, such as an airport authority, which is the lessee of the
land on which the airport has its situs is, for the purpose of this sub-subparagraph,
deemed the owner of such land.
c. Real property used by an airline for purposes of loading or unloading passengers
or property onto or from an aircraft which is exempt from tax includes: office areas

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used to process tickets, baggage processing areas, operations areas used for the
purpose of the operational control of an airline's aircraft, and air cargo areas.
(I) If any portion of the above property is used for any other purpose, it is taxed on a
pro-rata basis, which shall be determined by the square footage of the portion of the
areas in the airport that are used by an airline exclusively for the purpose of loading
or unloading passengers or property onto or from aircraft (which areas shall be the
numerator) compared to the total square footage of such areas used by the airline
(which areas shall be the denominator).
(II) Example: An airline leases a total of 3,000 square feet from an airport authority.
The airline uses the space as follows: 1,000 square feet are used to process tickets
and check in the passengers' luggage; 1,000 square feet are used for the passengers'
departure lounge; and 1,000 square feet are used for the management office and the
employees' lounge. The 1,000 square feet used to process tickets and check in the
passengers' luggage is exempt; the 1,000 square feet used as the passengers'
departure lounge is also exempt; and the 1,000 square feet used as the management
office and employees' lounge is taxable. Therefore, a total of 2,000 square feet is
exempt because that portion of the total space leased by the airline is used
exclusively for the purposes of loading or unloading passengers or property onto or
from an aircraft. However, the total amount used as office space and the employees'
lounge (i.e., 1,000 square feet) is taxable, because that portion of the space leased by
the airline is not used exclusively for the purposes of loading or unloading
passengers or property onto or from an aircraft.

RESPONSE
Section 212.031(1)(a), F.S., imposes sales tax on the privilege of engaging in the leasing of, or the
granting of a license to use, real property. Section 212.031(1)(c), F.S., imposes the tax on the total
rent or license fee charged for such real property by the person charging or collecting the rental or
license fee. However, Section 212.031(1)(a)6., F.S., excludes real property when such property is
“used at an airport exclusively for the purpose of aircraft landing or aircraft taxiing or property used
by an airline for the purpose of loading or unloading passengers or property onto or from aircraft or
for fueling aircraft.” (emphasis supplied.)
The emphasized portion of this exclusion first requires that an airline use the property in question.
Here, Taxpayer has shown that Airline does currently hold an F.A.A. Air Carrier Certificate.
Therefore, Airline will be deemed to be an airline for purposes of the exclusion. However, Taxpayer
and Commercial are not certified airlines.
The second requirement of the emphasized portion of the exclusion provides that the property must
be used exclusively for the purpose of loading or unloading passengers or property onto or from
aircraft, or for fueling aircraft.

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Therefore, provided:
1) that Airline actually uses the portion of the property located at Airport,
2) that the payments by Taxpayer to Authority for the lease of real property are being made on
behalf of Airline, and
3) that the portion of the property is being used exclusively for the purpose of loading or
unloading passengers or property onto or from aircraft or for fueling aircraft,
then that portion of the property would not be subject to sales tax. See Rule 12A-1.070(1)(a)6.,
F.A.C., for guidance on the areas used by Airline that would be excluded from sales tax.
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 15 days of the date of this letter.
Sincerely,

H. French Brown, IV
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922-4708
Record ID: 68468