Could Florida hotels include communications services tax in one combined pay-per-view charge instead of separately stating the tax?

Plain-English summary

A programming provider delivered movies, video games, interactive services, and other content by satellite to Florida hotels. Hotels collected the provider's pay-per-view and pay-per-day charges from guests and forwarded the money—less any commission—to the provider, which remitted communications services tax.

Communications dealers generally had to list state, gross-receipts, and local communications services taxes separately from other charges. Florida law gave licensed public lodging establishments an alternative: they could show guests a single combined communications-service-and-tax charge if they posted the required notice in each guest room.

The Department allowed the provider to combine the tax with its pay-per-view charge when billing a participating hotel if both conditions were met:

1. The hotel was licensed as a public lodging establishment under Chapter 509; and
2. A plainly visible notice at least three inches by five inches in the guest room told guests that the communications-service charge included applicable communications services tax.

The ruling concerned on-demand programming that guests elected to purchase. It separately noted that hotels bought some subscription programming without charging guests and that the provider collected tax on those hotel purchases.

What this means for you

The hotel exception changes display, not taxability

The provider agreed that pay-per-view programming was a taxable communications service. The notice procedure merely allowed a combined price instead of separate tax lines.

Licensing and notice are both required

A property cannot use the single-charge method simply because it rents rooms. It must qualify and be licensed under Chapter 509 and must post the statutory notice in the guest room.

The notice has specific visibility and size rules

The notice must be plainly visible and no smaller than three by five inches. It must say that the communications-service charge includes the applicable tax.

Billing responsibilities should follow the collection chain

Hotels collected the guest charges for the provider, while the provider remitted the tax. Contracts and billing systems should consistently pass both service revenue and tax through that arrangement.

Common questions

Q: Could the hotel show one pay-per-view amount including tax?
A: Yes, if it was a licensed public lodging establishment and posted the required guest-room notice.

Q: Was pay-per-view programming exempt?
A: No. The ruling treats it as a taxable communications service; only the presentation of the tax could be combined.

Q: How large did the notice need to be?
A: At least three inches by five inches and plainly visible in the guest room.

Q: Who remitted the tax?
A: Under the stated arrangement, the hotels collected the guest charges on the provider's behalf and forwarded them to the provider, which remitted the communications services tax.

Citations and references

• Fla. Stat. § 202.16(1)(b) (tax collection and lodging-establishment notice alternative)
• Fla. Stat. § 202.35(4) (general separate-statement requirement)
• Fla. Stat. § 509.013(4)(a) (public lodging establishment)
• Fla. Stat. § 509.2015 (guest-room notice)
• Fla. Stat. § 509.242 (public lodging classifications)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A19-001

Original ruling text

Question: Taxpayer asks whether the charge that it remits to hotels for sales of its PPV to hotel
guests can include Communications Services Tax, as a single charge provided that the hotel is
licensed under Chapter 509, F.S., and that it posts the appropriate notice in the guest rooms to
comply with the requirements of s. 509.2015, F.S.
Answer: For purposes of Taxpayer billing its customers, the hotel guests, for revenue and tax, to
the extent that (1) the lodging establishments are licensed under Chapter 509, F.S., and (2) that
the lodging establishments post the appropriate notice in the guest rooms pursuant to s.
509.2015, F.S., Taxpayer may combine Communications Services Tax with the Taxpayer’s
charge for pay-per-view type services and state it as a single charge in its billing of the lodging
establishment

January 8, 2009

XXX

Re:

Technical Assistance Advisement 09A19-001
Communications Services Tax – Tax on Pay-Per-View Sales
XXX
FEI #: XXX
Section 202.16(1), Florida Statutes (“F.S.”)

XXX:
This response is in reply to your letter dated July 25, 2008, requesting the Department’s issuance
of a Technical Assistance Advisement (“TAA”) pursuant to Section 213.22, F.S., and Rule
Chapter 12-11, F.A.C., regarding the Department’s position on the retail sales of pay-per-view
programming to lodging establishments. 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 issuance of a TAA.
Stated Facts

Technical Assistance Advisement
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Taxpayer through its equipment, provides access to movies, video games, interactive services,
and other types of programming and content to lodging establishments and their guests on a payper-view, pay-per-day, subscription or other basis in Florida. The programming is transmitted via
satellite to each hotel and displayed in guest rooms on televisions.
Lodging establishments purchase some programming on a subscription basis (“Subscription
Programming”), and guests are not charged for this service. The Taxpayer charges and collects
Communications Services Tax (CST) on its sales of the Subscription Programming to lodging
establishments.
Lodging establishment guests may elect to purchase on-demand programming, such as movies or

video games. These are Pay-Per-View and Pay-Per-Day (“PPV”) Programming services.
Taxpayer’s charges for PPV are collected by the hotels from their guests on the Taxpayer’s
behalf at rates set by the Taxpayer. Monies collected by the lodging establishment are then
forwarded to the Taxpayer.
Prior to January 2008, Taxpayer relied on each individual hotel to correctly charge guests and
remit Communications Services Tax to the Department on PPV services. However, beginning
January 1, 2008, the Taxpayer began separately stating and adding the Communications Services
Tax to its rates for PPV. The lodging establishments are expected, by Taxpayer, to charge and
collect both the PPV charges and the separately stated Communications Services Tax from the
guests and forward both the PPV charges (less any commission) and the CST to Taxpayer.
Taxpayer then remits the Communications Services Tax to the Department.
Requested Advisement
Taxpayer asks whether the charge that it remits to hotels for sales of its PPV to hotel guests can
include Communications Services Tax, as a single charge provided that the hotel is licensed
under Chapter 509, F.S., and that it posts the appropriate notice in the guest rooms to comply
with the requirements of s. 509.2015, F.S.
Applicable Authority
Section 202.16(1)(b), F.S., addresses the statement of Communications Services Tax on guest
billings made by lodging establishments and provides the following:
Each dealer of communications services selling communications services in this
state shall collect the taxes imposed under this chapter and chapter 203 from the
purchaser of such services, and such taxes must be stated separately from all other

Technical Assistance Advisement
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charges on the bill or invoice. Notwithstanding the requirement in this paragraph
and in s. 202.35 to separately state such taxes, a public lodging establishment
licensed under chapter 509 may notify purchasers of the taxes imposed under this
chapter on a notice in a guest room posted in a manner consistent with the
requirements of s. 509.2015, rather than separately stating the taxes on the guest
bill or invoice. (Emphasis supplied).
Discussion
Taxpayer agrees that sales of its PPV programming is a taxable communications service.
Generally, dealers of communications services are required to separately itemize the Florida
communications services tax (which includes the gross receipts portion) and the local
communications services tax on a customer's bill. See s. 202.16(1)(b) and s. 202.35(4), F.S.
However, in 2002, s. 202.16(1)(b), F.S., was amended to allow an alternative means for public
lodging establishments to notify guests of the imposition of state and local communications
services taxes. Instead of separately stating the taxes on the customer's bill, the business may use
the notification procedure provided under s. 509.2015, F.S. This provision allows for a single
charge on the guest bill for the communications service(s) purchased AND the applicable
communications services tax.
A public lodging establishment is defined in s. 509.013(4)(a), F.S., as “any unit, group of units,
dwelling, building, or group of buildings within a single complex of buildings, which is rented to
guests more than three times in a calendar year for periods of less than 30 days or 1 calendar
month, whichever is less, or which is advertised or held out to the public as a place regularly
rented to guests….” Specific classifications of public lodging establishments are qualified under
s. 509.242, F.S.
Under s. 509.2015, F.S., to qualify for the single charge billing procedure, the lodging
establishment must first be licensed as a public lodging establishment. Second, it must notify the
guest by means of a notice that is plainly visible in the guest room and no smaller than three by
five inches in size, that the charge for the communications service, PPV programming in the
instant case, includes applicable communications services tax.
Lodging establishments are the entities invoicing and billing the guest for the Taxpayer’s PPV
sales. Taxpayer’s revenues, including the purchase price and the CST, are collected by each
lodging establishment from the guest and forwarded to Taxpayer.
Therefore, for purposes of Taxpayer billing its customers, the hotel guests, for revenue and tax,
to the extent that (1) the lodging establishments are licensed under Chapter 509, F.S., and (2) that
the lodging establishments post the appropriate notice in the guest rooms pursuant to s.

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509.2015, F.S., Taxpayer may combine Communications Services Tax with the Taxpayer’s
charge for PPV and state it as a single charge in its billing of the lodging establishment.
Conclusion
The Taxpayer may combine Communications Services Tax with the Taxpayer’s charge for PPV
and state it as a single charge in its billing of the lodging establishment(s), provided that the
notice requirements contained in s. 202.16(1)(b), F.S., are met.
Closing Statement
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 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,

Carla M. Bruce
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 922-4839
Record ID: 48568

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