Was propane or electricity used in an RV park's residents-only coin laundry exempt as residential household fuel?

Plain-English summary

The Florida Department of Revenue concluded that propane or electricity used by an RV park's coin-operated laundry was exempt from sales tax as residential household fuel.

The laundry was separately metered, limited to registered residents and their guests, and used for a residential activity. Although residents paid to use the machines, the Department did not treat the laundry as a commercial laundromat open to the public.

The ruling emphasized that a residential common area need not be inside or next to each living space. The exemption depended on exclusive residential use; if utility or fuel passing through the same meter served a nonresidential purpose, the statute made the entire sale taxable.

What this means for you

Residential-community operators

Fuel for a residents-only common area may qualify when the area serves household needs and is not offered to the public.

Accountants and utility managers

Separate metering and evidence of exclusive residential use are important because mixed use can defeat the exemption for the whole metered sale.

Common questions

Q: Did the coin-operated feature make the laundry commercial?
A: No, on these facts.

Q: Did the common area have to be contiguous to each residence?
A: No.

Q: Would mixed residential and commercial use through one meter qualify?
A: No.

Citations and references

• Fla. Stat. §§ 212.02(19), 212.05, 212.08(7)(j), and 213.22
• Fla. Admin. Code rr. 12A-1.053 and 12A-1.059

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 14A-032

Original ruling text

Executive Director
Marshall Stranburg

QUESTION: WHETHER PROPANE GAS AND/OR ELECTRICITY USED IN THE
OPERATION OF THE COIN-OPERATED LAUNDRY, WHICH IS SOLELY USED BY THE
TENANTS, IS EXEMPT FROM SALES TAX UNDER S. 212.08(7)(J), F.S.?
ANSWER: TAX IS NOT DUE, BECAUSE THE COIN-OPERATED LAUNDRY IS NOT A
COMMERCIAL ACTIVITY, BUT RATHER IT IS A RESIDENTIAL HOUSEHOLD
ACTIVITY USED EXCLUSIVELY BY THE RESIDENTS.
December 30, 2014
Re:

Technical Assistance Advisement 14A-032
Florida Sales and Use Tax
Residential Exemption on Fuels
Section 212.08, Florida Statutes (“F.S.”)
Petitioner: XXXX (“Taxpayer”)

Dear XXXX:
This letter is a response to your petition received on XXXX, for the Department's issuance of a
Technical Assistance Advisement ("TAA") concerning the above-referenced petitioner 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 12-11, Florida Administrative Code
(“F.A.C.”). This response to your request constitutes a TAA and is issued to you under the
authority of section (“s.”) 213.22, F.S.
FACTS PRESENTED
The following facts are based on documents and statements provided by Taxpayer.
Taxpayer, a Florida corporation, operates an RV park located in XXXX, Florida. This RV park,
which is mostly in an isolated area, caters exclusively to singles, fifty-five (55) years or older.
The park and common areas are limited solely to the registered park residents and their guests.
Residents stay anywhere from overnight to long term.
Part of the operations of the park involves Taxpayer owning two propane gas tanks. One
propane tank exclusively services Taxpayer’s office, and the other tank exclusively services the
coin-operated laundry. Thus, the coin-operated laundry is separately metered. Taxpayer
purchases the propane from XXXX (“Company”). Taxpayer is considering using electricity to
power the coin-operated laundry.

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

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

Technical Assistance Advisement
Page 2
REQUESTED ADVISEMENTS
Taxpayer requests whether propane gas and/or electricity used in the operation of the coinoperated laundry, which is solely used by the residents, is exempt from sales tax under s.
212.08(7)(j), F.S.
LAW & DISCUSSION
Section 212.05, F.S., generally provides every person is engaged in a taxable privilege when
engaging in the business of selling, at retail, tangible personal property, in the state. In order to
exercise such a privilege, tax is levied at a rate of six percent (6%). See s. 212.05(1)(a)1.a., F.S.
Tangible personal property is defined as “personal property which may be seen, weighed,
measured, or touched or is in any manner perceptible to the senses, including electric power or
energy ….” See s. 212.02(19), F.S. Therefore, the general rule of taxability applies, unless
Taxpayer can show it is entitled to an exemption.
Florida sales or use tax is not due if the item is specifically exempt by Chapter 212, F.S. It is
well-settled law exemptions are strictly construed against the taxpayer, causing the burden of
proof for the exemption to be on the taxpayer. See Szabo Food Servs., Inc. of N.C. v. Dickinson,
286 So. 2d 529, 530-32 (Fla. 1973); Green v. City of Pensacola, 126 So. 2d 566, 569 (Fla. 1961);
State v. Thompson, 101 So. 2d 381, 386 (Fla. 1958). Any doubt as to an exemption is resolved
favorably towards the State. See Szabo Food Servs., 286 So. 2d at 531; United States Gypsum
Co. v. Green, 110 So. 2d 409, 413 (Fla. 1959).
One such exemption from the tax imposed in s. 212.05, F.S., is found in s. 212.08(7)(j), F.S.,
which specifically provides an exemption for the sale of utilities and fuel, used for residential
purposes, to “residential households.” This provision states that if any part of the utility or fuel
is used for a nonexempt purpose, the entire sale is taxable. Thus, the statute contains two
requirements: (1) the sale must be to a residential household, and (2) there can be no use for a
nonexempt purpose (i.e., the use must be exclusively for residential purposes). As the statute
provides an exemption to residential households that are using utilities for residential purposes,
the use of the household by the occupant is critical. The occupant must use the household
exclusively for residential purposes. In other words, the occupant must make the household his
or her residence and engage in no other use than residential.
In line with the direct residential use exemption, the Department has held certain uses of utilities
and fuels for residential purposes in common areas, though the common area is not directly
within or contiguous with the residential household, will qualify for the household fuels
exemption. “Common area” is a term used by the Department but not defined in the Florida
Statutes nor in Rules 12A-1.053 and 12A-1.059, F.A.C. Where a word is not defined by statute
or the intent of the word is unclear, a court will resort to statutory construction and may
determine the plain and ordinary meaning of the word from a dictionary. See Nehme v.
Smithkline Beecham Clinical Labs., Inc., 863 So. 2d 201, 204-05 (Fla. 2003) (quoting Seagrave
v. State, 802 So. 2d 281, 286 (Fla. 2001)).

Technical Assistance Advisement
Page 3
The phrase, “common area,” is known to mean an area, which, e.g., is used by residents of a
condominium, which maintains a common ownership and use. See BLACK’S LAW DICTIONARY
275 (6th ed. 1990). Thus, a “common area” is generally not included within the private,
individual living quarters. Therefore, in a residential development, the common area could
include roads within the development, parks, area pools, playgrounds, etc. Clearly then, the
“common area,” as found within Rules 12A-1.053 and 12A-1.059, F.A.C., does not have to be
contiguous to each residential unit or space to qualify as a common area. Therefore, if the use of
a common area is in conjunction with the operation of the residential households or fills the
needs of residents; is intended for the exclusive use of the owners, tenants, and guests; is not held
out for use by the public; and no charge is made for the use of the area, such use is considered to
be residential use and is covered by the exemption provided in s. 212.08(7)(j), F.S.
Based on the above definition, one can conclude the exemption, found in 212.08(7)(j), F.S., is for
a residence and/or an area shared by residents, even if that area is not within the private
residence. Furthermore, no part of the utility usage, through one meter, may be used for
anything but residential purposes. See 212.08(7)(j), F.S. The same cited statute provides if any
part of the utilities used through the same meter are used for nonresidential purposes, e.g., a
commercial activity, then all of the utilities are taxable.
The determination must first be made whether the laundry facilities are a common area. With
the definition of “common area” in mind, the Department has found, within certain limitations,
various types of common areas to be for residential purposes, and thus, qualify for the household
fuel exemption for utilities and fuel to power the common areas. Common areas do not have to
be within or contiguous with the physical living quarters. Accordingly, if the common areas are
used exclusively for residential purposes, i.e., not commercial purposes, then the fuel used in the
common areas will be exempt from tax as a household fuel. On first impression, the laundry
facilities held out strictly to the residents might qualify as a common area, even though the
facilities are not within or contiguous with the residential household. If the laundry facilities are
a common area strictly for residential household use, then fuel used to power the common area
would be exempt from tax.
With regards to Taxpayer, the Department finds the resident’s use of the coin-operated laundry
facility to be a residential activity. Though payment is made by the residents for the use of the
laundry machines, the laundry facilities are strictly for residential household use. Further, since
the RV park is mostly isolated from other residential areas, it is unlikely individuals would drive
to the RV park solely to use the coin-operated laundry, as one would at a laundry mat.
CONCLUSION
Propane gas and/or electricity used in the operation of the coin-operated laundry, which is solely
used by the residents for residential purposes, is exempt from sales tax under s. 212.08(7)(j), F.S.
This response constitutes a Technical Assistance Advisement under s. 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 s. 213.22, F.S. Our response is predicated on those facts and the

Technical Assistance Advisement
Page 4
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 s. 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,

Ann Rix
Revenue Program Administrator I
Technical Assistance & Dispute Resolution
Record ID:

173722