Could a university allocate its mandatory student transportation fee between taxable parking access and nontaxable uses?

Plain-English summary

The university charged every student a mandatory parking and transportation access fee. A student parking decal was available under the university's rules, while fee revenue also supported parking facilities, campus shuttles, lighting, roads, sidewalks, emergency programs, and bicycle racks.

Florida treated the parking component as payment for a license to use real property. That component was subject to sales tax even though the fee funded other programs too.

The Department accepted a reasonable allocation: available parking spaces divided by the number of students paying the fee. The resulting portion was taxable, and the balance could be treated as nontaxable under the stated facts.

What this means for you

When one mandatory charge pays for both taxable real-property access and nontaxable benefits, Florida may permit a supportable allocation. The formula must connect the taxable share to the actual benefit provided; here, parking capacity relative to the fee-paying student population supplied that connection.

Common questions

Was the entire transportation fee automatically taxable? No. The parking-access portion was taxable, and a reasonable portion could be allocated to nontaxable uses.

What formula did the Department accept? Available parking spaces divided by the number of students paying the fee.

Why was parking access taxable? It granted students a privilege to use university real property.

Citations and references

• Fla. Stat. § 212.02(10)(i) and § 212.031(1)(a), (c), as quoted and discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11A-017

Original ruling text

SUMMARY
QUESTION:
The issue is whether Taxpayer may allocate its mandatory transportation access fee charged to
its students into taxable and nontaxable amounts by using the ratio of available parking spaces
and the number of students paying the fee.
ANSWER:
The Fee is subject to sales tax as consideration paid for the use of real property, and Taxpayer
may allocate a portion of the Fee as not subject to sales tax based on the number of students
paying the Fee and the number of available spaces.
May 25, 2011
XXX
Re:

Subject: Technical Assistance Advisement (TAA) 11A-017
Sales and Use Tax – Use of Real Property, Parking
Section 212.031, Florida Statutes (F.S.)
XXX (Taxpayer)
BP#: XXX
FEI #: XXX

Dear XXX:
This is in response to your letter dated April 12, 2011, requesting this Department’s issuance of a
Technical Assistance Advisement (TAA) pursuant to Section 213.22, F.S., and Rule Chapter 1211, Florida Administrative Code (F.A.C.), concerning the use of real property. 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 for a TAA.
Issue
The issue is whether Taxpayer may allocate its mandatory transportation access fee charged to
its students into taxable and nontaxable amounts by using the ratio of available parking spaces
and the number of students paying the fee.
Facts
Taxpayer, a University, charges its students a Parking & Transportation Access Fee (Fee) each
semester. The Fee entitles students to an original parking decal, which must be properly
displayed for the student to park on campus. The University’s Traffic and Parking Regulation
provides the following in pertinent part:
(2) Registration of Motor Vehicles. Vehicles used by members of the faculty, staff,
students (full or part-time), concessionaire employees and others who regularly operate a
vehicle on campus must be registered with the Department of Parking and Transportation
during the first day the vehicle is on campus…. All visitors must use parking meters

Technical Assistance Advisement
Page 2 of 4
unless a parking permit has been provided by a University parking decal or parking
permit. Use of a motor vehicle on University property is a privilege, not a right and is
made available only under this regulation.
(a) Decals.

2. Students: Students will pay a Transportation Access Fee per semester. A student
   decal will be issued by the Department of Parking and Transportation to each student
   under the following conditions, and it is the students’ responsibility to properly display
   the current decal in accordance with this regulation.
   a. The student must be currently enrolled at the University.
   b. The student must provide a valid vehicle registration for the vehicle on which
   the decal will be placed.
   c. The student must settle all outstanding parking and traffic fines and fees.

4. Decal Registration Fees:

b. The following are one semester registration fees, exclusive of sales tax, for each decal
classification:

[Original]
[Duplicate/Replacement]
Student
Fall $XXX
N/A
Spring $XXX
N/A
Summer A, B, or C - $XXX
N/A

(4) Enforcement.
(a) Violations. Failure to abide by any of the provisions of these regulations shall be
considered a university parking infraction. The University may enforce university
parking infractions through use of warnings, citations and fines, vehicle immobilization,
towing and any other means authorized by statute.
Taxpayer’s website provides that the revenues generated by the Fee fund the following, but are
not limited to:
•
•
•
•
•
•
•

Parking Facilities
Emergency Student Loan Program
Lighting Improvements in Parking Lots
Emergency Telephone Call Centers
Road and Sidewalk Improvements
University Park Campus Shuttle
Bicycle Rack Program

Requested Advisement

Technical Assistance Advisement
Page 3 of 4
Taxpayer requests a determination whether Taxpayer may adopt a simplified allocation formula
(the ratio of available spaces divided by the number of students paying the fee) to determine the
taxable portion of its transportation access fee.
Taxpayer’s Position
Taxpayer believes that it should be able to adopt simplified allocation formula recommended by
TAA 01A-040, because that TAA addresses a similar transportation access fee imposed by
another university.
Applicable Authority and Discussion
Subsection 212.031(1)(a), F.S., provides 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 ….” “License” with reference to the use of real property is defined to mean “the
granting of a privilege to use or occupy a building or a parcel of real property for any purpose.”
Section 212.02(10)(i), F.S. A license to use real property is a personal privilege to do one or
more acts on the land of another without possessing any interest in the land, such as the license
for students to park in designated areas on campus in this case.
Section 212.031(1)(c), F.S., provides the following in pertinent part:
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 purposes and shall include base rent, percentage rents, or similar
charges…. Payments for intrinsically valuable personal property such as franchises,
trademarks, service marks, logos, or patents are not subject to tax under this section. In
the case of a contractual arrangement that provides for both payments taxable as total rent
or license fee and payments not subject to tax, the tax shall be based on a reasonable
allocation of such payments and shall not apply to that portion which is for the
nontaxable payments.
The allocation formula proposed by Taxpayer, which determines the taxable portion of the Fee
by using a ratio of the number of available spaces divided by the number of the students paying
the Fee, is a reasonable allocation, and Taxpayer may adopt such allocation.
Conclusion
The Fee is subject to sales tax as consideration paid for the use of real property, and Taxpayer
may allocate a portion of the Fee as not subject to sales tax based on the number of students
paying the Fee and the number of available spaces.
This response constitutes a Technical Assistance Advisement under Section 213.22, F.S., which

Technical Assistance Advisement
Page 4 of 4
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,

Angel Eason
Senior Tax Attorney
Technical Assistance and Dispute Resolution
(850) 717-7312
Record ID: 101812