Which city recreation-department user fees were taxable under Florida sales-tax rules?

Plain-English summary

Florida reviewed a city's recreation-department fee schedule and classified dozens of charges by what the customer actually received.

Taxable items included the mandatory attendant fee attached to every building rental; shelter, community-center, athletic-field, pool, and outdoor-court rentals; ordinary recreation cards, fitness memberships, open or lap swim, skate-park access, and tennis permits; monthly and transient marina slips, related utilities, the part of a wait-list fee applied to rent, and a water-taxi permit; fuel, retail goods, supplies, clothing, equipment, and a charge to hang a customer's banner on city property.

Nontaxable items included special-event processing and refund-application fees because they did not grant occupancy; separately identified lifeguard charges; structured athletic and recreational programs administered by the city, such as leagues, lessons, clinics, classes, camps, and department programs; mausoleum-construction permit charges tied to installed memorial property; and qualifying leases to food-and-drink concessionaires in public recreational facilities.

Pump-out charges were taxable unless city records proved that absolutely no parts or materials were supplied. These classifications show why a single schedule can contain sales, admissions, rent, service, and exempt government-program fees.

What this means for you

Municipal status does not make every recreation fee exempt. Analyze the transaction: access to recreation, a structured government-run program, use of real property, boat storage, goods, or a pure administrative service.

Common questions

Were city-run leagues and classes taxable? No, when the city sponsored, administered, planned, supervised, directed, and controlled the structured program.

Were monthly marina slips exempt as long-term accommodations? No. Both monthly and transient boat-slip fees were taxable marina rent.

Were food-vendor location charges taxable? Qualifying food-and-drink concession leases in the public recreational facility were exempt.

Citations and references

• Fla. Stat. §§ 212.02, 212.03, 212.031, 212.04, and 212.05, and Fla. Admin. Code rr. 12A-1.005 and 12A-1.035, as quoted and discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 10A-012

Original ruling text

SUMMARY
RESPONSE:
The Taxpayer provided a schedule of user fees relating to various programs and services offered
by its Recreation Department. The user fees have been categorized as Processing Fees,
Commercial Rental charges, Program Fees, Marina Fees, Cemetery Fees, and Miscellaneous
charges.
The Department has conducted a thorough review of the user fee schedule. Discussion regarding
the taxability of the user fees is detailed in the “response” section of this Advisement.
February 26, 2010
XXX
Re:

Subject: Technical Assistance Advisement (TAA) 10A-012
Sales and Use Tax – User Fees
Sections 212.02, 212.03, 212.031, 212.04, and 212.05, Florida Statutes (F.S.)
Rules 12A-1.005 and 12A-1.035, Florida Administrative Code (F.A.C.)
City of XXX and Recreation Department (“Recreation Department”)
FEI # XXX

Dear XXX:
This is in response to your letter dated September 28, 2009, requesting this Department’s
issuance of a Technical Assistance Advisement (“TAA”) pursuant to section 213.22, F.S., and
Rule Chapter 12-11, F.A.C., concerning the taxability of various user fees imposed by the
Recreation Department. An examination of your letter has established you have complied with
the statutory and regulatory requirements for issuance of a TAA. Therefore, the Department is
hereby granting your request of a TAA.
Facts
Your letter provides the City’s Parks and Recreation Department has enacted a schedule of user
fees relating to various programs and services offered by the Recreation Department. Along
with your request for advisement you provided a copy of the Recreation Department’s proposed
User Fee Schedule.
The User Fee Schedule provides the user fees are of the following categories:
Processing Fees, Commercial Rental Charges, Program Fees, Marina Rental Charges,
Cemetery Fees, and Miscellaneous Fees.
Requested Advisement
You request that the Department of Revenue (the Department) review the User Fee Schedule to

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verify that you are taxing the various programs and services correctly.
I will provide the applicable authority that will be used in providing a response. I will then
discuss the categories listed and provide a response regarding the taxability of the various
charges and fees associated with each category.
Applicable Authority
Section 212.02, F.S., provides the following 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, exercise, and fitness facilities, except physical fitness facilities owned or
operated by any hospital licensed under chapter 395.

(10)(c) Every house, boat, vehicle, motor court, trailer court, or other structure or any
place or location kept, used, maintained, or advertised as, or held out to the public to be, a
place where living quarters or sleeping or housekeeping accommodations are supplied for
pay to transient or permanent guests or tenants, whether in one or adjoining buildings,
shall for the purpose of this chapter be deemed a roominghouse.

Section 212.04, F.S., provides the following 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.

(2)(a) A participation fee or sponsorship fee imposed by a governmental entity as
described in s. 212.08(6) for an athletic or recreational program is exempt when the
governmental entity by itself, or in conjunction with an organization exempt under s.
501(c)(3) of the Internal Revenue Code of 1954, as amended, sponsors, administers,
plans, supervises, directs, and controls the athletic or recreational program.

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Section 212.05, F.S., provides in part:
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.

Section 212.03, F.S., provides the following in part:
(1) It is hereby 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 to use any living quarters or sleeping or housekeeping accommodations in, from,
or a part of, or in connection with any hotel, apartment house, roominghouse, tourist or
trailer camp, mobile home park, recreational vehicle park, condominium, or timeshare
resort. . . .

(4) The tax levied by this section shall not apply to, be imposed upon, or collected from
any person who shall have entered into a bona fide written lease for longer than 6 months
in duration for continuous residence at any one hotel, apartment house, roominghouse,
tourist or trailer camp, or condominium, or to any person who shall reside continuously
longer than 6 months at any one hotel, apartment house, roominghouse, tourist or trailer
camp, or condominium and shall have paid the tax levied by this section for 6 months of
residence in any one hotel, roominghouse, apartment house, tourist or trailer camp, or
condominium. . . .

(6) It is the legislative intent that every person is engaging in a taxable privilege who
leases or rents parking or storage spaces for motor vehicles in parking lots or garages,
who leases or rents docking or storage spaces for boats in boat docks or marinas, or who
leases or rents tie-down or storage space for aircraft at airports. For the exercise of this
privilege, a tax is hereby levied at the rate of 6 percent on the total rental charged.

Section 212.031, F.S., provides in part:
(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:

10. Leased, subleased, licensed, or rented to a person providing food and drink

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concessionaire services within the premises of a convention hall, exhibition hall,
auditorium, stadium, theater, arena, civic center, performing arts center, publicly owned
recreational facility, or any business operated under a permit issued pursuant to chapter

550. A person providing retail concessionaire services involving the sale of food and
     drink or other tangible personal property within the premises of an airport shall be subject
     to tax on the rental of real property used for that purpose, but shall not be subject to the
     tax on any license to use the property. For purposes of this subparagraph, the term “sale”
     shall not include the leasing of tangible personal property.

(c) For the exercise of such privilege, a tax is levied in an amount equal to 6 percent of
and on the total rent or license fee charged for such real property by the person charging
or collecting the rental or license fee. The total rent or license fee charged for such real
property shall include payments for the granting of a privilege to use or occupy real
property for any purpose and shall include base rent, percentage rents, or similar charges.
...

Rule 12A-1.005, F.A.C., provides in part:
(2) EXEMPT ADMISSIONS. The following admissions are exempt from the tax
imposed under s. 212.04, F.S.:

(e) Participation fees or sponsorship fees to athletic or recreational structured programs
imposed by governmental entities as described in s. 212.08(6), F.S., when such
governmental entities sponsor, administer, plan, supervise, direct, and control such
athletic or recreational programs are exempt. An organization qualified under s. 501(c)(3)
of the United States Internal Revenue Code of 1986, as amended, may work in
conjunction with the governmental entity to sponsor, administer, plan, supervise, direct,
and control the athletic or recreational structured program without affecting the
exemption.
1. Example: A city or county park and recreation department sponsors, administers,
plans, supervises, directs, and controls its adult softball, little league, and other team
recreation programs. The park and recreation department charges $100.00 for each team
participating, or it may charge $10.00 per person for each person to participate. At the
end of league play, a tournament is held to determine the championship. The participation
fees charged for league and tournament play are exempt from tax as an athletic structured
program.
2. Example: A city operates a swimming pool. It charges an admission price of $2.00 for
each adult and $1.00 for each child to enter the pool. The admission charges are taxable
since this is not a structured athletic or recreational program.
3. Example: A city or county park and recreation department sponsors, administers plans,
supervises, directs, and controls pottery and ceramics classes. The park and recreation

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department charges each person $20.00 to participate. The participation charges are
exempt as a recreational structured program.

(3) TAXABLE ADMISSIONS AND PARTICIPATION FEES. The following
paragraphs contain examples of admission charges that are subject to tax, unless such
admissions are specifically exempt under the provisions of s. 212.04(2), F.S. This list is
not intended to be an exhaustive list.
(a) Admissions to any place of amusement, sport, or recreation are subject to tax.

(4)(a)1. Dues and user fees paid to any organization, including athletic clubs, health spas,
civic, fraternal, and religious clubs, and organizations that provide physical fitness
facilities or recreational facilities, such as golf courses, tennis courts, swimming pools,
yachting, boating, athletic, exercise, and fitness facilities, are subject to tax.

Rule 12A-1.035, F.A.C., provides the following in part:
(2)(a)1. The following at-need sales to consumers by any person licensed or registered
under the provisions of Chapter 470 or 497, F.S., are not subject to tax:
a. The sale of funeral or burial services;
b. The sale of funeral or burial merchandise sold in conjunction with the sale of a funeral
or burial service; and
c. The sale of funeral or burial merchandise that is installed at the consumer’s designated
location.

2. The sale of funeral or burial merchandise is presumed to be made in conjunction with
   the sale of funeral or burial services when the seller of the merchandise is required to
   deliver the merchandise to any person licensed to provide funeral or burial services.
3. The purchase of funeral or burial merchandise by any person licensed or registered
   under the provisions of Chapter 470 or 497, F.S., for use in providing funeral or burial
   services or for installation at the consumer’s designated location is subject to tax at the
   time of purchase.

(3)(a) Monuments, monument services, and related monument products for the purposes
of memorializing human remains are not subject to tax when:

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1. The merchandise is sold in conjunction with the sale of a funeral or burial service; or
2. The merchandise is installed at the consumer’s designated location.

Response
Processing Fees:
The “Charges,” listed on page 1 and 2 of the User Fee Schedule include “Special Event
Processing Fee,” “Application for Refund,” and “Attendant Fee.”
Review of the User Fee Schedule provides that the Recreation Department is correct in not
taxing the “Special Event Processing Fee” and “Application for Refund.” These charges are not
subject to tax under section 212.031, F.S., because they are not paid in exchange for the right to
occupy property. These charges are administrative and do not grant a right for occupancy.
The Recreation Department is incorrect in not taxing the “Attendant Fee.” The User Fee
Schedule provides the “Attendant Fees shall be assessed for all building rentals.” During a
conversation on November 6, 2009, you confirmed that the “Attendant Fee” is mandatory and
includes event preparation, event supervision, and event clean up. This charge is subject to tax
as rent, as provided in section 212.031(1)(c), F.S. This charge is paid in exchange for the right
to occupy the Recreation Department’s property.
Commercial rental:
Section 212.03l(1)(a), F.S., sets forth the general rule that the renting, leasing, or licensing the
use of real property is subject to sales tax unless the property is exempt under one of a number of
specified exemptions. As provided, section 212.031(1)(c), F.S., levies tax on the total rent or
license fee charged for the granting of a privilege to use or occupy real property for any purpose.
Review of the User Fee Schedule provides that the Recreation Department is correctly taxing the
charges for “Shelter, Pavilion, & Group Area Rentals,” including the “Special Events Permits
Fee” listed on page 3 of the User Fee Schedule, as well as the charges for “Community
Center/Building Rentals,” “Athletic Field Rentals,” and “Pool Rentals.”
The Recreation Department is correct in not taxing the charges for lifeguards as listed on page 6
of the schedule. These charges are not subject to tax under section 212.031, F.S., because they
are not paid in exchange for the right to occupy property.
Charges for the rental of “Outdoor Courts” are also being taxed properly, with the exception of
the “Tennis Permit for the XXX Tennis Complex.” The Tennis Permit fee is a taxable
admission. This will be discussed further in the response regarding the charges for “Programs.”

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The Recreation Department is correctly taxing the charges to vendors, as listed on page 14 of the
User Fee Schedule, with the exception of charges to food vendors. Section 212.031(1)(a)10.,
F.S., provides an exemption for real property that is “[l]eased, subleased, licensed, or rented to a
person providing food and drink concessionaire services within the premises of a convention
hall, exhibition hall, auditorium, stadium, theater, arena, civic center, performing arts center,
publicly owned recreational facility, or any business operated under a permit issued pursuant to
chapter 550.” When the Recreation Department leases real property to persons providing food
and drink concessionaire services within the premises of a publicly owned recreational facility,
such leases are exempt from sales tax.
Programs:
Section 212.04(1)(a), F.S., provides that every person is exercising a taxable privilege who sells
or receives anything of value by way of admissions. The term “admissions” is defined, in part,
in section 212.02(1), F.S., to include “the net sum of money . . . 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 all fees and dues paid to . . .
membership clubs . . . .”
Rule 12A-1.005(4)(a)1., F.A.C., provides user fees paid to organizations that provide physical
fitness facilities or recreational facilities, such as golf courses, tennis courts, swimming pools,
yachting, boating, athletic, exercise, and fitness facilities, are subject to tax.
Section 212.04(2)(a)5., F.S., provides an exemption for “participation fee or sponsorship fee
imposed by a governmental entity . . . when the governmental entity . . . sponsors, administers,
plans, supervises, directs, and controls the athletic or recreational program.” Rule 12A1.005(2)(e), F.A.C., provides examples for this exemption. The first example provides “[a] city
or county park and recreation department sponsors, administers, plans, supervises, directs, and
controls its adult softball, little league, and other team recreation programs.” Participation fees
in this example are exempt because this is “an athletic structured program.” The second example
provides that admission charges for a city-operated pool are subject to tax since this is not a
structured athletic or recreational program. Review of the User Fee Schedule provides that the
Recreation Department is correct in not taxing the charges for “Athletic League Play,”
“Lifeguard Training,” “Camps/Programs,” “Group Activities, Lessons, Clinics, Classes,”
“Individual Activities, Lessons, Clinics, Classes,” “Department Sponsored,” “Contracted
Instructor,” “Transportation’” and “Miscellaneous Arts.” These are participation fees for athletic
or recreational programs that are administered by the Recreational Department.
The charges for “Rec Card,” “Membership: XXX Fitness Center,” “Open Swim, Lap Swim,”
and “Supervised Skate Park,” are incorrectly listed as “non-taxable.” The exemption provided in
section 212.04(2)(a)5., F.S., applies to participation fees for government sponsored athletic
programs that are sponsored, administered, planned, supervised, directed, and controlled by the
governmental entity. In this case, charges for “Rec Card,” “Membership: XXX Fitness Center,”
“Open Swim, Lap Swim,” and “Supervised Skate Park,” are not specifically imposed for
participation in such structured events. As such, these charges are subject to sales tax as a

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taxable admission.
This analysis applies to charges for “Adult, Family and Senior/Youth Tennis Permit,” from the
charges for “Outdoor Courts,” section as previously mentioned. These charges are subject to tax
as provided in Rule 12A-1.005(4)(a)1., F.A.C.
Marinas:
Review of the User Fee Schedule provides the Recreation Department is not taxing charges for
“Monthly Slips,” while the Recreation Department is taxing charges for “Transient Slips.”
Section 212.03(1) F.S., provides every person is exercising a taxable privilege who engages in
the business of renting, leasing, letting, or granting a license to use any living quarters or
sleeping or housekeeping accommodations in, from, or a part of, or in connection with any hotel,
apartment house, roominghouse, or tourist or trailer camp. Section 212.02(10)(e), F.S., defines
“roominghouse” to include “[e]very house, boat, vehicle, motor court, trailer court, or other
structure or any place or location kept, used, maintained, or advertised as, or held out to the
public to be, a place where living quarters or sleeping or housekeeping accommodations are
supplied for pay to transient or permanent guests or tenants, whether in one or adjoining
buildings . . . .” Section 212.03(4), F.S., provides sales tax shall not be imposed on any person
that enters into a bona fide written lease for longer than 6 months for continuous residence at any
one hotel, apartment house, roominghouse, tourist or trailer camp, or condominium. Section
212.03(6), F.S., provides every person is engaging in a taxable privilege who leases or rents
docking or storage spaces for boats in boat docks or marinas. The tax is due on the total amount
charged for the rental of the boat dock or marina.
In this case, the Recreation Department is not renting transient accommodations. During a
phone conversation on November 10, 2009, you verified the Recreation Department does not
provide boats. Thus, under the provisions of section 212.03(6), F.S., the Recreation Department
is engaging in a taxable privilege in the leasing or renting of the boat slips. Accordingly, the
total fees received from occupants of the boats slips are subject to tax. As such, both charges for
“Monthly Slips” and “Transient Slips” are subject to sales tax. This includes the “Utility Fee
Charges.”
Further, the User Fee Schedule indicates that $75.00 of the $100.00 “Wait List Fee” is applied to
the first month’s rent. The portion of the “Wait List Fee” that becomes rent is subject to sales
tax.
The Department agrees that charges for “Fuel/Oil Sales,” and “Retail Sales,” are taxable as sales
of tangible personal property. The Recreation Department is also required to pay fuel taxes
when it purchases motor fuels for resale.
During a phone conversation on November 10, 2009, you indicated the Recreation Department
has an agreement with an entity to provide transportation services to the public within the
Marina. The Recreation Department charges a $100.00 per year “Water Taxi Permit Fee.” You

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also verified that the “Water Taxi Permit Fee” does not include the lease or rental of a boat slip.
Based on the information provided, the Department agrees that the “Water Taxi Permit Fee” is
subject to tax under the provisions of section 212.031, F.S.
Regarding the charge for “Pump Out,” listed in the “Marina” section of the schedule, Rule 12A1.006(4), F.A.C., provides “charges for repairs of tangible personal property which require labor
or service only are taxable unless the repairer (dealer) can establish by evidence in the dealer’s
records that the dealer furnished no tangible personal property which was incorporated into or
attached to the repaired item.” Therefore, the charge for “Pump Out” is subject to tax unless the
Recreation Department is able to show, by its records, that absolutely no parts or materials were
incorporated into or attached to the boat.
Cemeteries:
The Department agrees that the Recreation Department is correct in not taxing the “Cemeteries”
charges, listed on page 12 of the User Fee Schedule, regarding the charges for “Permit for
Construction of Mausoleums.” Review of the User Fee Schedule provides:
Permit for Construction of Mausoleums or other above-ground structures intended to be
used in the interment or inurnment of human remains:
Granite………………………25% of retail price (plus tax).
Marble……………………….50% of retail price (plus tax).
During a phone conversation on November 18, 2009, you verified this charge is imposed on the
family of the deceased. The sale of a monument to a consumer that is installed at the consumer’s
designated location, such as an installed burial vault, marker, or other type of memorial, is not
subject to Florida sales tax as provided in Rule 12A-1.035(3)(a), F.A.C. This would include a
permit charge for construction.
Miscellaneous:
The Recreation Department is correctly taxing the charges for “Contracted Services/Vendors”
and “Utility Fees” listed on page 13 of the User Fee Schedule, with the exception of such
charges to food vendors. As previously indicated, section 212.031(1)(a)10., F.S., provides an
exemption for real property that is “[l]eased, subleased, licensed, or rented to a person providing
food and drink concessionaire services within the premises of a convention hall, exhibition hall,
auditorium, stadium, theater, arena, civic center, performing arts center, publicly owned
recreational facility, or any business operated under a permit issued pursuant to chapter 550.”
When the Recreation Department leases real property to persons providing food and drink
concessionaire services within the premises of a publicly owned recreational facility, such leases
are exempt from sales tax.
The Department agrees that charges for “Materials, Clothing and/or Supplies,” and
“Miscellaneous Equipment” are taxable as sales or rentals of tangible personal property.
Based on the information provided, the charge for “Banner,” is subject to tax. During a phone

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conversation on November 10, 2009, you verified that the “banner” charge is imposed when a
client desires to hang its own banner for an event. The Recreation Department does not provide
the banner. Since the charge allows the client to place its banner on the Recreation
Department’s property, the charge is subject to tax as a lease or license of real property.
Conclusion
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 that
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,

Brinton Hevey
Tax Law Specialist
Technical Assistance and Dispute Resolution
850/488-7157
Record ID: 72332