How did Florida sales tax apply to a gaming ship's vessel costs, gaming, food sales, boarding fees, and port berth?

Plain-English summary

Florida applied several different sales-tax rules to this proposed “cruise to nowhere”: vessel-related purchases qualified for a partial interstate-commerce exemption, gaming receipts were not taxable under Chapter 212, boarding tickets were taxable admissions, food sales depended on where they occurred, and the qualifying port berth was excluded from tax.

The requester was a Florida LLC formed to operate a gaming and entertainment ship from a Florida port. The ship would make two daily trips, travel more than 3.5 nautical miles off Florida's coast, and return passengers to the originating port without another destination.

Vessel, retrofit, equipment, supplies, and fuel

Under section 212.08(8), vessels used to transport people or property in interstate or foreign commerce, and parts used on those vessels, received partial exemption treatment based on the statutory formula.

Relying on Department of Revenue v. New Sea Escape Cruises, Ltd., the Department found the operator eligible for that partial exemption for:

• The vessel purchase.
• Reconstruction and retrofit work.
• Gaming equipment installed on the vessel.
• Other property that became a vessel component.
• Consumable and nonconsumable property used aboard the vessel.
• Dyed diesel fuel used to operate the vessel.

The operator could seek a refund for tax already paid on qualifying purchases or leases under Rule 12A-1.0641(7).

Gaming, food, and boarding charges

Gaming receipts did not fall within Chapter 212 and were not subject to Florida sales tax.

Food and beverage sales were location-sensitive. Sales in Florida waters were taxable; sales outside Florida waters were exempt because Florida could not tax an extraterritorial sale. Food and beverages purchased for resale aboard the vessel remained subject to the resale provisions and documentation rules in section 212.07.

A boarding pass or ticket was the price of an admission under section 212.02(1), so the boarding charge was taxable. The Department distinguished that charge from transportation to a destination because passengers returned to the point of origin and did not disembark elsewhere.

Port berthing agreement

The ship's ten-year berthing agreement covered real property at a port authority used to load and unload passengers. Section 212.031(1)(a)8.a. excluded that qualifying port property from the commercial real-property rental tax, so the berth payments were not taxable under the described lease.

What this means for you

Cruise and excursion operators

One voyage can contain several tax categories. Vessel purchases, passenger tickets, gaming, food sales, and dock rent do not share a single answer; each must be separately classified.

Restaurants and bars aboard vessels

Keep records showing where each sale occurs. Under this advisement, food or drink sold in Florida waters was taxable while the same sale outside Florida waters was exempt.

Accountants handling vessel purchases

The ruling described a partial exemption, not a blanket exemption. Eligibility, the statutory mileage formula, resale certificates, and refund documentation all matter.

Common questions

Q: Were gaming receipts subject to Florida sales tax?
A: No. The Department said gaming receipts did not come within Chapter 212.

Q: Were cruise tickets taxable?
A: Yes. The boarding pass was a taxable admission because the trip returned passengers to the originating point without another destination.

Q: Were bar and restaurant sales taxable?
A: Sales in Florida waters were taxable; sales outside Florida waters were exempt.

Q: Did the vessel exemption cover more than the ship itself?
A: Yes. The Department applied partial-exemption treatment to the retrofit, installed gaming equipment, other vessel property, supplies, and dyed diesel fuel used in interstate or foreign commerce.

Q: Was the port berth taxable real-property rent?
A: No, under the described lease for port-authority property used to load and unload passengers.

Citations and references

• Fla. Stat. § 212.02(1) — definition of admission
• Fla. Stat. § 212.03(6) — docking and storage-space rentals
• Fla. Stat. § 212.031(1)(a)8.a. — exclusion for specified port-authority property
• Fla. Stat. § 212.05 — sales and use tax on tangible personal property
• Fla. Stat. § 212.07(1)(b) and (9) — resale documentation and food or beverage purchases for resale
• Fla. Stat. § 212.08(8) — vessel partial exemption for interstate or foreign commerce
• Fla. Stat. § 315.02(2) — definition of port authority
• Fla. Admin. Code r. 12A-1.0641(7) — refund procedure for qualifying vessel purchases
• Department of Revenue v. New Sea Escape Cruises, Ltd., 894 So. 2d 954 (Fla. 2005) — partial exemption applied to cruises to nowhere
• Oklahoma Tax Commission v. Jefferson Lines, Inc., 514 U.S. 175 (1995) — tax on a passenger ticket beginning in the taxing state

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11A-024

Original ruling text

SUMMARY
Facts: The taxpayer is a Florida Limited Liability Company organized in the state of
Florida. The taxpayer will operate a gaming and entertainment ship, which will operate
out of the Port Authority, Florida.
Question: Is the taxpayer eligible for the partial exemption provided for in s. 212.08(8),
F.S., on the purchase of the vessel used in the operation of the “cruise to nowhere”?
Answer: Yes. Pursuant to the recent Florida Supreme Court case, Department of
Revenue vs. New Sea Escape Cruises, Ltd., 894 So.2d 954 (Fla. 2005), the taxpayer is
eligible for the partial exemption provided in s. 212.08(8), F.S.
Question: Are gaming receipts collected while in international waters subject to sales
tax in Florida?
Answer: Gaming receipts do not come within the purview of Chapter 212, F.S., and are
therefore not subject to sales tax, whether or not the sale occurs outside Florida waters.
Question: Are bar and restaurant receipts collected while in international waters and bar
and restaurant receipts collected while in Florida waters subject to sales tax?
Answer: Where food or beverage is sold to customers, such sales are taxable when sold
in Florida waters and are exempt when sold outside Florida waters. The courts have
clearly established that, when sales are made extra-territorially, it is beyond the power of
the State of Florida to tax such sales.
Question: Are receipts from boarding fees subject to sales tax?
Answer: The charge for a boarding pass or ticket sold to a customer is the price
of an admission. Such charge is within the definition provided in s. 212.02(1),
F.S., and is therefore subject to sales tax.
Question: Is the reconstruction and retrofit of vessel performed out of the country or in
Florida eligible for the partial exemption in s. 212.08(8), F.S.?
Answer: Yes. The taxpayer is eligible for the partial exemption provided in s. 212.08(8),
F.S., on the reconstruction and retrofit of the vessel used in interstate and foreign
commerce to transport persons in interstate and foreign commerce.
Question: Is gaming equipment purchased and installed out of the country or in Florida
eligible for the partial exemption provided for in s. 212.08(8), F.S.?
Answer: Yes. The taxpayer is eligible for the partial exemption provided in s. 212.08(8),
F.S., on the purchase and installation of gaming equipment purchased outside Florida or

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in Florida for use on the vessel used in interstate and foreign commerce to transport
persons in interstate and foreign commerce.
Question: Is the purchase of all other tangible personal property purchased in or
imported into Florida eligible for the partial exemption in s. 212.08(8), F.S.?
Answer: Yes. The taxpayer is eligible for the partial exemption provided in s. 212.08(8),
F.S., on the purchase of all other tangible personal property purchased in or imported into
Florida for use on the vessel used in interstate and foreign commerce to transport persons
in interstate and foreign commerce.
Question: Are the purchases of all other nonconsumable or consumable tangible
personal property purchased in or imported into Florida eligible for the partial exemption
in s. 212.08(8), F.S.?
Answer: Yes. The taxpayer is eligible for the partial exemption provided in s. 212.08(8),
F.S., on the purchase of all other nonconsumable or consumable tangible personal
property purchased in or imported into Florida for use on the vessel used in interstate and
foreign commerce to transport persons in interstate and foreign commerce.
Question: Is the purchase of dyed diesel fuel used on the ship in interstate and foreign
commerce to transport persons in interstate and foreign commerce eligible for the partial
exemption in s. 212.08(8), F.S.?
Answer: Yes. The taxpayer is eligible for the partial exemption provided in s. 212.08(8),
F.S., on the purchase of dyed diesel fuel purchase for use on the ship used in interstate
and foreign commerce to transport persons in interstate and foreign commerce.
Question: Is the purchase of food and beverage for resale on the ship while in Florida or
International waters subject to the provisions within s. 212.07, F.S.?
Answer: Yes. The resale provisions within s. 212.07, F.S., would apply to the purchase
of food and beverages purchased for resale on the board the vessel.
Question: Are payments made under the 10-year Berthing Agreement with Port
Authority subject to tax?
Answer: No. Section 212.031(1)(a)8., F.S., excludes real property “used at a port
authority … exclusively … for the purpose of loading and unloading passengers and
cargo onto or from such a vessel ….” The facts provide that the taxpayer’s lease is for
real property located at a port authority, as defined in section 315.02(2), F.S.
Question: Can the taxpayer obtain a refund of sales and use tax paid on the purchase of
items entitled to the partial exemption in s. 212.08(8), F.S.?

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Answer: Yes. The taxpayer can obtain a refund of tax that it may have paid at the time of
purchase or lease on purchases or leases that were entitled to the partial exemption in s.
212.08(8), F.S., as provided in Rule 12A-1.0641(7), F.A.C.

August 11, 2011

XXX
XXX
XXX
Re:

Technical Assistance Advisement 11A-024
XXX
Sales and Use Tax – Cruises to Nowhere
Sections 212.03(6), 212.031(1)(a)8.a., 212.05, 212.07(1)(b), (9), 212.08(8)(a), and
315.02(2), F.S.
Rule 12A1-0641(7), F.A.C.

Dear
This is in response to your letter dated June 17, 2011, requesting this Department’s issuance
of a Technical Assistance Advisement (TAA) pursuant to Section 213.22, F.S., and Rule
Chapter 12-11, Florida Administrative Code (F.A.C.), concerning the above referenced
matter. 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.
Facts
The taxpayer is a Florida Limited Liability Company organized in the state of Florida. The
taxpayer will operate a gaming and entertainment ship, which will operate out of the XXX
Port Authority, Florida. The taxpayer was formed for the sole purpose of operating the
gaming and entertainment ship featuring the “cruise to nowhere” concept.
In December, 2010, the taxpayer purchased a ship and began renovation and refitting it. The
ship was purchased for use exclusively in non-Florida waters to transport person in foreign
and interstate commerce and not for sport or pleasure fishing.
The taxpayer has secured a berthing agreement with XXX Port Authority (the “Port”), which
agreement grants the taxpayer the right to dock an entertainment and gaming ship at the Port.
The ship will leave the Port each day at 11 am and 7 pm and will return to the port at 4pm
and 12 am. After leaving the Port, the ship will travel to a distance of more than 3.5 nautical
miles off the cost of Florida, where it will continue cruising or lay anchor, depending on
weather conditions.

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The taxpayer will offer gaming and entertainment accommodations aboard the ship, and will
sell food and beverage to its passengers.
Requested Advisement & Taxpayer Position
Taxpayer requests the Department issue a binding Technical Assistance Advisement on the
taxable status of the following issues.

1. Gaming receipts collected while in international waters.

The taxpayer submits that gaming receipts are not subject to sales tax, because gaming
receipts do not come within the purview of Chapter 212, F.S., whether or not the sale
occurs outside Florida waters.

2. Bar and restaurant receipts collected while in international waters.
   The taxpayer submits that food or beverages are not subject to sales tax when sold by a
   restaurant or bar operated within the vessel while outside Florida territorial waters,
   because the courts have established that, when sales are made extra-territorially, it is
   beyond the power of the State of Florida to tax such sales.
3. Bar and restaurant receipts collected while in Florida waters.
   The taxpayer submits that food or beverages are subject to tax when sold by a restaurant
   or bar operated within the vessel while in Florida territorial waters. The tax is to be
   applied to the gross sale amount. The rate applied is the state tax rate of 6% plus any
   additional county discretionary sales surtax (DSS).
4. Receipts from boarding fees.
   The taxpayer submits that charges made by a vessel carrying passengers to international
   waters where passengers cannot disembark from the vessel at points other than the
   origination point (cruises to nowhere) are subject to sales tax.
5. The purchase of the ship and if taxable, is it subject to the apportionment factor as
   provided in s. 212.08(8), F.S.
   The taxpayer submits it is eligible for the partial exemption provided in s. 212.08(8), F.S.,
   pursuant to the Florida Supreme Court Case of Department of Revenue v. New Sea
   Escape Cruises, Ltd. The ship will be used in interstate and foreign commerce to
   transport persons in interstate and foreign commerce and is subject to sales and use tax to
   the extent provided in s. 212.08(8), F.S. Since the ship will not operate in the canals or
   waterways of Florida, the ship will not have any Florida mileage for calculation of the
   apportionment factor per Rule 12A-1.0641(2)(b), F.A.C., and therefore, no sales or use
   tax is due in connection with the taxpayer’s purchase or use of the ship in Florida.

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6. The reconstruction and retrofit of the ship will be eligible for the partial exemption set
   out in Section 212.08(8), F.S., per Department of Revenue v. New Sea Escape Cruises,
   Ltd.
   Taxpayer submits that the retrofit costs, including the cost of materials and labor, would
   be exempt from Florida sales and use tax per Section 212.08(8), F.S. Since the ship will
   not operate in the canals or waterways of Florida, the ship will not have any Florida
   mileage for calculation of the apportionment factor per Rule 12A-1.0641(2), F.A.C., and
   therefore, no sales or use tax is due in connection with the taxpayer’s purchases in
   connection with the reconstruction and retrofit of the ship.
7. Gaming equipment purchased and installed on the ship will be eligible for the partial
   exemption set out in Section 212.08(8), F.S, pursuant to the Florida Supreme Court case
   of Department of Revenue v. New Sea Escape Cruises, Ltd.
   The taxpayer submits that the gaming equipment is exempt from Florida sales and use tax
   per Section 212.08(8), F.S., pursuant to the Florida Supreme Court case of Department of
   Revenue v. New Sea Escape, Ltd. Since the ship will not operate in the canals or
   waterways of Florida, the ship will not have any Florida mileage for calculation of the
   apportionment factor per Rule 12A-1.0641(2), F.A.C., and therefore, no sales or use tax
   is due in connection with the taxpayer’s purchases of the gaming equipment installed on
   the ship.
8. The purchase of all other tangible personal property purchased and imported into
   Florida and the installation labor performed in Florida when the tangible personal
   property becomes a component part of the ship.
   The taxpayer submits that such items are exempt from Florida sales and use tax per
   Section 212.08(8), F.S., pursuant to the Florida Supreme Court case of Department of
   Revenue v. New Sea Escape, Ltd. Since the ship will not operate in the canals or
   waterways of Florida, the ship will not have any Florida mileage for calculation of the
   apportionment factor per Rule 12A-1.0641(2), F.A.C., and therefore, no sales or use tax
   is due in connection with the taxpayer’s purchases of other tangible personal property
   that will become a component of the ship.
9. The purchase of all other nonconsumable tangible personal property purchased in or
   imported into Florida which is used on the ship during the “cruise to nowhere” but does
   not become a component part of the ship.
   The taxpayer submits that such items are exempt from Florida sales and use tax per
   Section 212.08(8), F.S., pursuant to the Florida Supreme Court case of Department of
   Revenue v. New Sea Escape, Ltd. Since the ship will not operate in the canals or
   waterways of Florida, the ship will not have any Florida mileage for calculation of the
   apportionment factor per Rule 12A-1.0641(2), F.A.C., and therefore, no sales or use tax

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is due in connection with the taxpayer’s purchase of other nonconsumable tangible
personal property used on the ship during the cruise to nowhere that will not become a
component of the ship.

10. The purchase of all other consumable tangible personal property which is used on the
    ship during the “cruise to nowhere.”
    The taxpayer submits that such items are exempt from Florida sales and use tax per
    Section 212.08(8), F.S., pursuant to the Florida Supreme Court case of Department of
    Revenue v. New Sea Escape, Ltd. Since the ship will not operate in the canals or
    waterways of Florida, the ship will not have any Florida mileage for calculation of the
    apportionment factor per Rule 12A-1.0641(2), F.A.C., and therefore, no sales or use tax
    is due in connection with the taxpayer’s purchase of all other items of consumable
    tangible personal property which will be on the ship during the cruise to nowhere.
11. The purchases of dyed diesel fuel for use on the ship during the “cruise to nowhere.”
    The taxpayer submits that any dyed diesel fuel purchased for use on the ship would be
    exempt from sales and use tax per Section 212.08(8), F.S., pursuant to the Florida
    Supreme Court case of Department of Revenue v. New Sea Escape, Ltd. Since the ship
    will not operate in the canals or waterways of Florida, the ship will not have any Florida
    mileage for calculation of the apportionment factor per Rule 12A-1.0641(2), F.A.C., and
    therefore, no sales or use tax is due in connection with the taxpayer’s purchase of dyed
    diesel fuel used in the operation of the ship.
12. If the taxpayer has paid Florida sales or use tax on the purchase of any item discussed
    in items #5, 6, 7, 8, 9, 10 and 11 above, the taxpayer may obtain a refund of such tax.
    The taxpayer submits that it may obtain a refund of tax that it may have paid at the time
    of the purchase or lease on purchases or leases of items discussed in items #5, 6, 7, 8, 9,
    10 and 11 above, per Rule 12A-1.0641(2)(b), F.A.C.
13. The purchase of food and beverages for resale on the ship while in Florida and
    international waters.
    The taxpayer submits that food and beverages purchased to prepare and sell for
    immediate consumption, while in Florida waterways or outside of Florida waterways is
    exempt from sales and use tax as a sale for resale, pursuant to Section 212.09, F.S.
14. The payments made under the berthing agreement with the Port.
    The lease or rental of docking or storage spaces for boats at boat docks or marinas is
    taxable under s. 212.03(6), F.S. However, the taxpayer submits that it is eligible for the
    exemption provided in s. 212.08(8), F.S. The vessel will be used in interstate and foreign
    commerce to transport persons in interstate and foreign commerce and is subject to sales
    and use tax to the extent provided in s. 212.08(8), F.S. Since the vessel will not operate in

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the canals or waterways of Florida, the vessel will not have any Florida mileage for
calculation of the apportionment factor per Rule 12A-1.0641(2)(b), F.A.C., and therefore
no tax is due.
Applicable Authority
Section 212.03(6), F.S., provides:
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 storage
spaces 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(1)(a)8.a., 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:…
8.a. Property used at a port authority, as defined in s. 315.02(2),
exclusively for the purpose of oceangoing vessels or tugs docking, or such
vessels mooring on property used by a port authority for the purpose of
loading and unloading passengers or cargo onto or from such a vessel, or
property used at a port authority for fueling such vessels, or to the extent
that the amount paid for the use of any property at the port is based on the
charge for the amount of tonnage actually imported or exported through
the port by a tenant.
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 . . . .
(1) For the exercise of such privilege, a tax is levied on each taxable transaction
or incident, which tax is due and payable as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of tangible
personal property when sold at retail in this state, computed on each taxable sale
for the purpose of remitting the amount of tax due the state, and including each
and every retail sale.

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(b) At the rate of 6 percent of the cost price of each item or article of tangible
personal property when the same is not sold but is used, consumed,
distributed, or stored for use or consumption in this state . . . .
(c) At the rate of 6 percent of the gross proceeds derived from the lease or rental
of tangible personal property, as defined herein ….
(d) At the rate of 6 percent of the lease or rental price paid by a lessee or rentee,
or contracted or agreed to be paid by a lessee or rentee, to the owner of the
tangible personal property.
Section 212.07(1)(b), F.S., provides in pertinent part:
A resale must be in strict compliance with s. 212.18 and the rules and
regulations, and any dealer who makes a sale for resale which is not in
strict compliance with s. 212.18 and the rules and regulations shall himself
or herself be liable for and pay the tax. Any dealer who makes a sale for
resale shall document the exempt nature of the transaction, as established
by rules promulgated by the department, by retaining a copy of the
purchaser’s resale certificate….
Section 212.08(8)(a), F.S., provides in part: “The sale or use of vessels and parts thereof
used to transport persons or property in interstate or foreign commerce is subject to the
taxes imposed in this chapter only to the extent provided herein. . . .” The basis of the tax
is the ratio of intrastate mileage to interstate or foreign mileage traveled by the vessels
which were used in interstate or foreign commerce and had at least some Florida mileage
during the previous fiscal year. This ratio shall be applied each month to the total Florida
purchases which are used in Florida to establish that portion of the total used and
consumed in interstate movement and subject to tax at the applicable rate. Further,
paragraph (c) of the statute provides:
It is the intent of the Legislature that neither subsection (4) nor this
subsection shall be construed as imposing the tax provided by this chapter
on vessels used as common carriers, contract carriers, or private carriers,
engaged in interstate or foreign commerce, except to the extent provided
by the pro rata formula provided in subsection (4) and in paragraph (a).
Rule 12A-1.0641, F.A.C., tracks the language of section 212.08(8), F.S.,
regarding the proration of tax for vessels and parts thereof used to transport
persons or property in interstate or foreign commerce.
The courts have clearly established that, when sales are made extra-territorially, it
is beyond the power of the State of Florida to tax such sales. See Department of
Revenue v. Kelly Boat Service, Inc., 324 So.2d 651 (Fla. 1st DCA 1976); and

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Department of Revenue v. Pelican Ship Corporation, 257 So.2d 56 (Fla. 1st DCA
1972), cert. denied, 262 So.2d 682.
Read in its entirety and considering its basic purpose, the law is intended to tax as
completely within its sphere as organic provisions allow. L.B. Smith Aircraft
Corporation v. Green, 94 So.2d 832, 836 (Fla. 1957). The purpose of the tax
exemption is to prevent Florida from running afoul of the U.S. Commerce Clause
by exceeding its powers to tax interstate or foreign commerce. Taxing cruise to
nowhere cruises is not an attempt to regulate or discriminate against interstate or
foreign commerce. See Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 115 S.Ct.
1331 (1995).
In Oklahoma Tax Commission v. Jefferson Lines, Inc., supra, the United States
Supreme Court held that Oklahoma’s sales tax on the sale of bus rides through
several States did not violate the Commerce Clause. The Court stated in part:
Here, in contrast, the tax falls on the buyer of the services, who is no more
subject to double taxation on the sale of these services than the buyer of
goods would be. The taxable event comprises agreement, payment, and
delivery of some of the services in the taxing State; no other State can
claim to be the site of the same combination. The economic activity
represented by the receipt of the ticket for “consumption” in the form of
commencement and partial provision of the transportation thus closely
resembles Berwind-White’s “delivery of goods within the State upon their
purchase for consumption,”… especially given that full “consumption” or
“use” of the purchased goods within the taxing State has never been a
condition for taxing a sale of those goods. Although the taxpayer seeks to
discount these resemblances by arguing that sale does not occur until
delivery is made, nothing in our case law supports the view that when
delivery is made by services provided over time and through space a
separate sale occurs at each moment of delivery, or when each State’s
segment of transportation state-by-state is complete. The analysis should
not lose touch with the common understanding of a sale, … the combined
events of payment for a ticket and its delivery for present commencement
of a trip are commonly understood to suffice for a sale.
In Department of Revenue v. Pelican Ship Corporation, supra, the Florida sales
tax on admissions was due on the $6.00 fee charged to patrons of fishing vessels
which was paid at dockside. The court reasoned that even if the fee was not
collected until after the vessel was beyond territorial limits of the State, the
obligation to pay such fee arose when the patron boarded the vessel at dockside
and thus the transaction was within the State’s taxing jurisdiction.
Also, in the recent Supreme Court case, Department of Revenue v. New Sea
Escape Cruises, Ltd., 894 So.2d 954 (Fla. 2005), the Court ruled that cruises-tonowhere operations that leave the State of Florida are foreign commerce, not

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intrastate, and thus the partial exemption set forth in Section 212.08(8)(a), F.S.,
should be applied. Additionally, the Court also held that there is no basis in either
the statutes or the Department of Revenue’s implementing regulations to parse a
carrier’s operations or a vessel’s voyages, and deny a carrier who engages in
foreign commerce, as well as intrastate commerce, the partial exemption for its
intrastate commerce operations. Therefore, the court approved the decision to
apply the partial tax exemption to cruise-to-nowhere operations, and disapproved
the decision of the First District in Dream Boat, Inc. v. Department of Revenue,
28 Fla. L. Weekly D837 (Fla. 1st DCA March 27, 2003).
Discussion & Response
Gaming Receipts Collected While in International Waters
Gaming receipts do not come within the purview of Chapter 212, F.S., and are therefore
not subject to sales tax, whether or not the sale occurs outside Florida waters. See
Department of Revenue v. Kelly Boat Service, Inc., supra.
Bar and Restaurant Receipts Collected While in International Waters and Bar and
Restaurant Receipts Collected While in Florida Waters
Where food or beverage is sold to customers, such sales are taxable when sold in Florida
waters and are exempt when sold outside Florida waters. The courts have clearly
established that, when sales are made extra-territorially, it is beyond the power of the
State of Florida to tax such sales. See Department of Revenue v. Kelly Boat Service, Inc.,
supra, and Department of Revenue v. Pelican Ship Corporation, supra.
Receipts From Boarding Fees
During a cruise to nowhere, the taxpayer is not engaged in transportation. Sales tax is not
imposed on the charge for transporting a person, since that charge does not come within
the statutory definition of an admission, nor is it specifically enumerated as a taxable
service within Chapter 212, F.S. The line of authority interpreting section 212.04(1), F.S.,
stands for the proposition that vessels engaged in cruises to nowhere are not engaged in
transportation, because the charge for admitting a person aboard was determined to be a
taxable admission. See Department of Revenue v. Kelly Boat Service, Inc., supra, and
Department of Revenue v. Pelican Ship Corporation, supra. Unless specifically exempted
by the Legislature, all sales of admissions, based on the charge for admitting a person to a
place of amusement, sport, or recreation, are taxable pursuant to s. 212.04, F.S.
Therefore, the charge for a boarding pass or ticket sold to a customer is the price of an
admission. Such charge is within the definition provided in s. 212.02(1), F.S., and is
therefore subject to sales tax. See Oklahoma Tax Comm’n v. Jefferson Lines, Inc., supra.

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Purchase of the Vessel
The taxpayer is eligible for the partial exemption provided in s. 212.08(8), F.S., on the
purchase of the vessel used in interstate and foreign commerce to transport persons in
interstate and foreign commerce. See Department of Revenue v. New Sea Escape
Cruises, Ltd., supra.
Reconstruction and Retrofit of the Vessel
The taxpayer is eligible for the partial exemption provided in s. 212.08(8), F.S., on the
reconstruction and retrofit of the vessel used in interstate and foreign commerce to
transport persons in interstate and foreign commerce. See Department of Revenue v. New
Sea Escape, Ltd., supra.
Gaming Equipment Purchased and Installed on the Vessel
The taxpayer is eligible for the partial exemption provided in s. 212.08(8), F.S., on the
purchase and installation of gaming equipment purchased for use on the vessel used in
interstate and foreign commerce to transport persons in interstate and foreign commerce.
See Department of Revenue v. New Sea Escape, Ltd., supra.
Purchase of Other Tangible Personal Property Purchased or Imported into Florida
and the Installation and Labor Performed in Florida When the Tangible Personal
Property Becomes a Component Part of the Vessel
The taxpayer is eligible for the partial exemption provided in s. 212.08(8), F.S., on such
items when such items become a component part of the vessel used in interstate and
foreign commerce to transport persons in interstate and foreign commerce. See
Department of Revenue v. New Sea Escape, Ltd., supra.
Purchase of All Other Nonconsumable or Consumable Tangible Personal Property
Purchased In or Imported Into Florida
The taxpayer is eligible for the partial exemption provided in s. 212.08(8), F.S., on the
purchase of all other nonconsumable or consumable tangible personal property purchased
in or imported into Florida for use on the vessel used in interstate and foreign commerce
to transport persons in interstate and foreign commerce. See Department of Revenue v.
New Sea Escape, Ltd., supra.
Purchase of Dyed Diesel Fuel For Use on the Vessel
The taxpayer is eligible for the partial exemption provided in s. 212.08(8), F.S., on the
purchase of dyed diesel fuel for use on the vessel used in interstate and foreign commerce
to transport persons in interstate and foreign commerce. See Department of Revenue v.
New Sea Escape, Ltd., supra.

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Purchase of Food and Beverages for Resale on the Vessel While in Florida or
International Waters
The resale provisions within s. 212.07(9), F.S., would apply to the purchase of food and
beverages purchased for resale on board the vessel.
Payments Made Under the Berthing Agreement with Canaveral Port Authority
Section 212.031(1)(a), F.S., provides that “the business of renting, leasing, letting, or
granting a license fee for the use of any real property” is a taxable privilege. However,
section 212.031(1), F.S., provides the following in part:
(a) … unless such property is:

8.a. Property used at a port authority, as defined in s. 315.02(2),
exclusively for the purpose of oceangoing vessels or tugs, docking, or
such vessel mooring on property used by a port authority for the purpose
of loading or unloading passengers or cargo onto or from such a vessel, or
property used at a port authority for fueling such vessels ….
(Emphasis Added.)
Section 212.031, F.S., imposes 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)8., F.S., excludes real property “used at a port authority … exclusively …
for the purpose of loading and unloading passengers and cargo onto or from such a vessel
….” The facts provide that the taxpayer’s lease is for real property located at a port
authority, as defined in section 315.02(2), F.S.; therefore, under this lease, the real
property exclusively used for the purpose of loading and unloading passengers or cargo
onto or from the vessel is excluded from sales tax.
Refund of Sales or Use Tax Paid on the Purchase of Items Entitled to the Partial
Exemption in s. 212.08(8), F.S.
The taxpayer may obtain a refund of tax that it may have paid at the time of purchase or
lease on purchases or leases that were entitled to the partial exemption in s. 212.08(8),
F.S., as provided in Rule 12A-1.0641(7), Florida Administrative Code.
Conclusion
Pursuant to the Florida Supreme Court case, Department of Revenue v. New Sea Escape
Cruises, Ltd., 894 So.2d 954 (Fla. 2005), the taxpayer is eligible for the partial exemption
provided in s. 212.08(8), F.S., to the extent provided above.

13
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,

Vicki Allen
Tax Law Specialist
Technical Assistance & Dispute Resolution
(850)717-6041
Control No: 105354