Did consumer home shows qualify as industry trade shows so that exhibitor booth subleases were exempt from Florida real-property rental tax?

Plain-English summary

The organizer leased convention or exhibition halls, paid sales tax on those prime leases, and subleased booth space to exhibitors at consumer home shows.

The shows qualified as industry trade shows under the ordinary meaning of that term. They focused on remodeling, home improvements, interior design, and related home-and-garden businesses; displayed industry products and services; and used trade direct mail, publications, electronic marketing, and targeted industry outreach.

Accordingly, tax remained due on the organizer's prime convention-center lease, but the subleases of booth space to exhibitors were exempt.

What this means for you

The statutory structure taxes the sponsor at the prime-lease level and exempts qualifying trade-show booth subleases. Event purpose and industry character need factual support.

Common questions

Did consumer attendance prevent trade-show status? No, under the described industry focus and exhibition facts.

Who paid tax on the real-property lease? The organizer holding the prime lease.

Were exhibitor booth subleases taxable? No.

Citations and references

• Fla. Stat. §§ 212.031(5) and 212.18(3)(e) and Fla. Admin. Code r. 12A-1.070(7), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11A-028

Original ruling text

SUMMARY

QUESTION: Are Taxpayer’s “Home shows” industry trade shows within the meaning of
Section 212.031(5), Florida Statutes (F.S.) whereby Taxpayer pays tax on its prime lease with
the convention center, and the subleases with the exhibitors are exempt from the tax imposed
pursuant to Section 212.031(5), F.S.
ANSWER: The Taxpayer’s home shows are “industry trade shows” within the common
meaning of the terms “industry trade show.” Therefore, the Taxpayer’s subleases to exhibitors is
exempt from the tax imposed under Section 212.031(5), F.S.

October 6, 2011

XXX
XXX
XXX
Re:

Technical Assistance Advisement 11A-028
Sales and Use Tax – Real Property Rental- Trade Show Home Shows
Sections: 212.031(5) and 212.18(3)(e), Florida Statutes (F.S.)
Rules: 12A-1.070(7), Florida Administrative Code (F.A.C.)
Petitioner: XXX (herein Taxpayer)
FEI: XXX

Dear
This letter is a response to your petition dated August 8, 2011, for the Department's
issuance of a Technical Assistance Advisement ("TAA") concerning the above
referenced party and matter. Your petition has been carefully examined and the
Department finds it to be in compliance with the requisite criteria set forth in Chapter 1211, F.A.C. This response to your request constitutes a TAA and is issued to you under the
authority of s. 213.22, F.S.
FACTS
Taxpayer produces and organizes “Home Shows” in markets across North America,
including different Florida cities, and solicits exhibitors and attendees through various
means to its shows. Taxpayer advertises its shows extensively through a variety of
means that include: trade direct mail; electronic direct mail advertising; and targeted
industry pursuits. The Taxpayer’s shows cater to products and services that are specific
to the home industry (including but not limited to remodeling, home improvements and
interior design). Taxpayer’s shows are held in convention or exhibition halls leased for

this purpose by the Taxpayer. The Taxpayer pays sales tax on the prime lease, and
subleases exhibition booths to exhibitors for which no sales tax is charged.

TAXPAYER POSITION
As stated by Taxpayer:
Taxpayer makes several arguments regarding this issue. Taxpayer contends that the
industry trade show provision of section 212.031(5), F.S., applies to Home Shows.
Taxpayer notes that the Florida statutes and regulations do not define the term “industry
trade show” for purposes of section 212.031(5), F.S., and further notes that there are no
reported cases defining the term. Taxpayer maintains that the definition of “trade show”
provided by Rule 12A-1.060(4)(a)2., F.A.C., is inapplicable to the provisions of section
212.031(5), F.S., regarding “industry trade shows.” The Rule provides that a trade show
is a meeting of limited duration of individuals with organizational ties or similar interests,
one of the purposes of which is the displaying of, and sharing information on, products
and services, without a major purpose of making retail sales of tangible personal
property.
Tax statutes must be interpreted in a manner that both avoids arbitrary and inequitable
results and attains the legislative purpose. Mills v. Corash, 249 So.2d 765, 769 (Fla.1st
DCA 1971). Where terms in a statute may be susceptible to different meanings,
legislative intent is the guide to resolving any dispute. e.g., Mikos v. Ringling BrosBarnum & Bailey Combined Shows, Inc., 475 So.2d 292, @295 (Fla. 2d DCA 1985),
affd., 497 So.2d 630 (Fla. 1986).
Taxpayer argues that the Legislature intended to apply the industry trade show provision
to hybrid trade/public shows such as boat shows. The industry trade show provision was
enacted in 1978 as Senate Bill 269, sponsored by Senator Jack Gordon. Taxpayer notes
that in the legislative committee hearing (as documented in the transcript) for this Bill,
Senator Gordon expressly stated his intention that the measure apply to certain public
shows. Furthermore, the legislative committee reports for Senate Bill 269 support the
Legislature’s intent to apply this provision to hybrid trade/public shows due to the tax
revenues generated by the attendees, which would far outweigh the tax not charged on
the exhibitors’ space.
The Taxpayer states that it is entitled to similar treatment of its hybrid shows. The
Department has a duty to treat similarly situated taxpayers equally. Regal Kitchens, Inc.
v. Department of Revenue, 641 So.2d 158, @ 164 (Fla. 1st DCA 1994). There is no
material distinction, factual or legal, between Taxpayer’s Home Shows and a hybrid
trade/public boat show. . . .
The “industry trade show” provision has also not been limited in application to boat
shows. Taxpayer notes that leading automobile shows and computer shows, as well as

boat shows, conducted at different locations across Florida, operate under the industry
trade show provision and do not charge tax on rentals of exhibitor space.
Taxpayer also notes that the Department has determined that certain art shows qualify as
“industry trade shows” under [S]ection 212.031(5), F.S. Taxpayer cites TAA 01A-054
and TAA 01A-052. Taxpayer states that in TAA 01A-054, the Department applied the
plain and ordinary meaning of “industry trade show” as “a large display or exhibition that
is arranged to arouse interest or stimulate sales by a group of firms engaged in a business
or industry”.
The Department also noted that “[t]he exemption does not restrict the convention or trade
show from making retail sales.” The plain meaning of “industry trade show” also applies
to Taxpayer’s shows. These shows are exhibitions designed to stimulate sales and interest
within the industry. In TAA 01A-052, the Department noted that the “trade show or
convention” definition in Rule 12A-1.060, F.A.C., does not apply because that rule
implements a distinct term used in a different statute that accomplishes an entirely
different legislative purpose.
These rulings show that the Department has applied the industry trade show provision to
trade shows open to the public at which retail sales are made. Taxpayer is entitled to the
same treatment, and it is entitled to application of the industry trade show provision.
REQUESTED ADVISEMENT
The Taxpayer’s Home Shows are “industry trade shows” within the meaning of Section
212.031(5), F.S., whereby Taxpayer pays tax on its prime lease with the convention center, and
the subleases with the exhibitors are exempt from the tax imposed pursuant to Section
212.031(5), F.S.
APPLICABLE LAW
Section 212.031(5), F.S., provides:
(5) When space is subleased to a convention or industry trade show in a convention hail,
exhibition hall, or auditorium, whether publicly or privately owned, the sponsor who
holds the prime lease is subject to tax on the prime lease and the sublease is exempt.
Rule 12A-1.070(7)(b), F.A.C., provides:
(7)(b) Notwithstanding the provisions of paragraph (a), when space is subleased to a
convention or industry trade show in a convention hall, exhibition hall, or
Auditorium, whether publicly or privately owned, the sponsor who holds the prime lease
is subject to tax on the prime lease and the sublease shall be exempt.
RESPONSE

Section 212.031, F.S., and Rule 12A-1.070, F.A.C., are the controlling provisions of law for the
lease, rental, or license to use commercial real property. Section 212.031(1)(a), F.S., provides that it
is a taxable privilege to engage in the business of renting, leasing, letting, or granting a license to
use commercial real property. In 1978, Section 212.031, F.S., was amended to add what is
currently subsection (5) to provide an exemption from sales tax on subleases of convention halls,
exhibition halls, or auditoriums, whether publicly or privately owned, when used for a
convention or industry trade show. The sponsor who holds the prime lease is subject to tax on the
prime lease. Rule 12A-1.070(7)(b), F.A.C., also addresses this exemption. The exemption
provided in Section 212.031(5), F.S., does not restrict the trade show or convention from making
retail sales.

Although the Legislature did not define the terms "convention or industry trade show" for
purposes of the exemption contained in section 212.031(5), F.S., words of common usage, when
used in a statute, should be construed in their plain and ordinary sense. Pederson v. Green, 105
So.2d 1 (Fla. 1958). Black’s Law Dictionary, Special Deluxe Fifth Edition, provides the
following definitions:
“Industry” is defined as any department or branch of art, occupation, or business
conducted as a means of livelihood or for profit; especially, one which employs much
labor and capital and is a distinct branch of trade. Dessen v. Department of Labor and
Industries of Washington, 190 Wash. 69, 66 P.2d 867, 869.
“Trade” is defined as the act or the business of buying and selling for money; traffic;
barter. May v. Sloan, 101 U.S. 231, 25 L.Ed. 797. Trade is not a technical word and is
ordinarily used in three senses: (1) in that of exchanging commodations by barter or by
buying and selling for money; (2) in that of an occupation generally; (3) in that of a
mechanical employment, in contradistinction to the learned professions, agriculture, or
the liberal arts. People v. Polar Vent of America, Inc., 10 Misc.2d 378, 174 N.Y.S.2d
789,793.
While Black’s Law Dictionary does not define the term “Show,” The Webster’s Dictionary
(Webster’s II, New Revised Dictionary, 1984) provides the following:
A public exhibition or theatrical presentation.
CONCLUSION
Here, based on the facts as presented, the Taxpayer’s consumer home shows qualify as industry trade
shows within the purview of section 212.031(5), F.S. The shows specifically cater to the home and
garden industry, including but not limited to remodeling, home improvements and interior design.
Products and items are exhibited on display as with an exhibition. The individuals who are invited to
attend these shows are "working in or associated with" the home industry businesses. The Taxpayer
represents these shows as trade shows, advertising through a variety of means that include: trade
direct mail; trade publication advertising; electronic direct mail advertising; and targeted industry
pursuits.

Therefore, based on the analysis provided herein, the Taxpayer’s home shows are “industry trade
shows” within the common meaning of the terms “industry trade show.” Tax is due on Taxpayer’s
prime lease with the convention center. The sublease of space to exhibitors is not subject to 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.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850) 717-7289.
Sincerely,

Horace Royals
Tax Law Specialist
Technical Assistance & Dispute Resolution
HR\
Record ID:

109456