Was a museum's lease of restaurant and food-service space exempt as an exhibition-hall concessionaire lease?

Plain-English summary

The Florida Department of Revenue concluded that a museum qualified as an "exhibition hall" and that its agreement leasing restaurant and food-service areas was exempt from sales tax.

The facility had about 20,000 square feet of exhibit space, permanent and rotating exhibits, meeting and education space, and a research center. The restaurant held the exclusive right to operate the restaurant and food-service points within identified areas of the museum.

Using the ordinary meaning of exhibition hall and the retail-concessionaire rule, the Department treated the restaurant as a food and drink concessionaire operating within a qualifying venue under section 212.031(1)(a)10.

What this means for you

Museums and cultural venues

The venue's actual exhibit function and the concessionaire's on-premises food sales supported the exemption. Document the exhibit areas and the exact food-service premises covered by the agreement.

Restaurant concessionaires

The exemption addressed the real-property lease or license. It did not say that the restaurant's food and drink sales were themselves exempt.

Common questions

Q: Did the museum count as an exhibition hall?
A: Yes, under the facts presented.

Q: Why did the restaurant agreement qualify?
A: The restaurant sold food and drink to the public within the qualifying exhibition hall as a retail concessionaire.

Citations and references

• Fla. Stat. §§ 212.031(1)(a)10. and 213.22
• Fla. Admin. Code r. 12A-1.070(1)(b)3.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 14A-016

Original ruling text

Executive Director
Marshall Stranburg

QUESTION: IS A REAL PROPERTY LEASE QUALIFIED FOR THE EXEMPTION FOUND IN
SECTION 212.031(1)(A)10., F.S.?
ANSWER: YES.

July 18, 2014

Re:

Technical Assistance Advisement – TAA 14A-016
Sales and Use Tax – Exhibition Halls/Food and Drink Concessionaires
Section: 212.031, Florida Statutes (F.S.)
Petitioner: XXX [hereinafter “XXX”]

Dear Mr. XXX:
This letter is a response to your letter dated December 5, 2013, requesting that the Department issue a
Technical Assistance Advisement ("TAA") concerning the above referenced party and matter. Your letter
has been carefully examined and the Department finds it to be in compliance with the requisite criteria set
forth in Chapter 12-11, Florida Administrative Code. This response to your request constitutes a TAA and
is issued to you under the authority of s. 213.22, F.S.
Issue
Whether the XXX qualifies as one of the premises listed in s. 212.031(1)(a)10., F.S., in order to render
the XXX Agreement between the XXX and XXX (“Restaurant”) exempt from sales tax.
Presented Facts
Your letter sets forth the following information:
The XXX is a public-private partnership between the XXX, a 501(c)(3) non-profit organization, XXX
County, which owns the building in which the museum is housed and the City of XXX, which owns the
land upon which the XXX is built. The XXX operates the facility which features approximately 20,000
square feet of exhibit space, a meeting space and education center, and serves 75,000 visitors annually.

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Damu Kuttikrishnan, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2
The XXX is a premier cultural attraction in the City of XXX, featuring cultural attractions and recreational
educational experiences for all visitors through its cutting-edge interactive exhibits. The XXX also
features permanent exhibits, and rotating and visiting exhibits, as well as a research center.
The XXX entered into a “XXX Agreement” with the XXX (“Restaurant”) for the operation of a restaurant
on the premises of the XXX. The XXX Agreement grants Restaurant the “sole and exclusive right” to
“operate the restaurant and food service points of sale in the XXX Areas.” See XXX Agreement 3a) and
2w). The “XXX areas” mean the restaurant, banquet rooms, kitchen and other areas where Restaurant
provides food service. See XXX Agreement 2l). The XXX Agreement includes as Exhibits C-1, C-2, and
C-3, floor plans of The XXX that specifically identify the XXX areas.
Law and Discussion
Section 212.031, F.S., generally imposes tax on the lease, rental, or license to use real property, however,
it also provides specific exemptions from the tax, specifically property that is:

10. Leased, 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... For purposes of this subparagraph, the
    term “sale” shall not include the leasing of tangible personal property.
    None of the venue types listed in the statute are defined in Chapter 212, F.S. As a general provision
    relevant to constructing the intended meaning of statutory terminology, the matter of Holly v. Auld, 450
    So.2d 217 (Fla. 1984), must be considered. In this case, the Florida Supreme Court held that it is a
    fundamental principle of statutory construction that legislative intent and policy concerns must control our
    construction of statutes and that the determination as to the intent of the legislature is based upon the plain
    and ordinary meaning of the language in the statute itself. This tells us that we must deduce the meaning
    of the terms used in s. 212.031(1)(a)10., F.S., to be the plain and ordinary meaning normally associated
    with such terms.
    The XXX believes the most likely venue listed in the relevant statute that fits its description and mission is
    “exhibition hall.” Using common language, an exhibition hall is a building or room in a building in
    which exhibits are displayed. The exemption is granted for leases, rentals, and licenses to use premises at
    specified venue-types, such as exhibition halls, to persons providing food and drink concessionaire
    services. Rule 12A-1.070(1)(b)(3), F.A.C., states that for purposes of this rule, the term “retail
    concessionaire,” which may be either a lessee or licensee, shall mean any person who makes sales of food
    or drink directly to the general public within the premises of any… convention hall, exhibition hall,
    auditorium or recreational facility... . Restaurant is a lessee who sells food or drink to the general public
    within the XXX. Restaurant meets the definition of a retail concessionaire.
    Conclusion
    Under the specific facts presented, the XXX is an “exhibition hall” for purposes of s. 212.031(1)(a)10.,
    F.S., and the XXX Agreement with Restaurant qualifies for the sales tax exemption set forth therein.

Technical Assistance Advisement
Page 3
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 upon 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 from that which is 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 10 days of the date of this letter.

Sincerely,

Clay Brower for Sara D. Faulkenberry
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Control # 157679