Was a food-and-drink concessionaire's percentage fee for space inside a public library subject to Florida sales tax?

Plain-English summary

The Florida Department of Revenue concluded that a food-and-drink concessionaire's monthly fee for space inside a publicly owned library was not subject to Florida sales tax.

The library provided reading and audiovisual materials, public computers, database access, and Internet technology for informational, educational, and recreational needs. The concessionaire received exclusive use of a defined space and paid a monthly fee based on a percentage of net sales.

Using the words' ordinary meanings, the Department classified the library as a publicly owned recreational facility and the food-and-drink operator as a concessionaire. The agreement therefore fell within section 212.031(1)(a)10.

What this means for you

Libraries and public entities

A library can qualify as a recreational facility for this specific concessionaire exemption. Document public ownership, facility use, and the concessionaire's defined space and food-or-drink activity.

Food and drink concessionaires

The ruling addressed the fee paid for licensed real-property space. Its answer depended on operating within the qualifying public facility.

Accountants and tax professionals

Apply the exemption narrowly. The Department relied on this library's public functions and the agreement's food-and-drink concession terms.

Common questions

Q: Did Florida treat the library as a recreational facility?
A: Yes.

Q: Was the concessionaire's monthly percentage fee taxable rent?
A: No.

Q: Did the concessionaire have a defined area inside the library?
A: Yes.

Citations and references

• Fla. Stat. §§ 212.031(1)(a)10. and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 16A-020

Original ruling text

Executive
Director
Leon Biegalski

QUESTION: IS THE CONSIDERATION PAID TO COUNTY BY CONCESSIONAIRE
PROVIDING FOOD AND DRINK CONCESSIONAIRE SERVICES WITHIN THE PREMISES
OF PUBLICLY OWNED LIBRARY EXEMPT FROM FLORIDA SALES TAX BY SECTION
212.031(1)(A)10., F.S.?
ANSWER: THE LIBRARY IS A PUBLICLY OWNED RECREATIONAL FACILITY. THE
CONSIDERATION PAID BY THE CONCESSIONAIRE TO COUNTY FOR USE OF THE
COUNTY-OWNED LIBRARY IS NOT SUBJECT TO FLORIDA SALES TAX (OTHERWISE
IMPOSED BY SECTION 212.031, F.S.) BECAUSE THE “CONCESSION AGREEMENT”
FALLS WITHIN THE SCOPE OF THE EXEMPTION FOUND AT SECTION 212.031(1)(A)10.,
F.S.
December 12, 2016
Subject: Technical Assistance Advisement (“TAA”) 16A-020
Sales and Use Tax-Real Property Rentals
Concessionaires at Publicly Owned Recreational Facilities
Section(s) 212.031(1)(a)10., Florida Statutes (“F.S.”)
XXXX (“Petitioner”)
XXXX (“County”)
XXXX (“City”)
XXXX (“LLC”)
Dear XXXX:
This letter is a response to your petition dated October 12, 2016, for the Department’s issuance
of a Technical Assistance Advisement (“TAA”) to Petitioner, regarding whether a library is a
publicly owned recreational area exempt from sales tax on real property rental income. Your
petition has been carefully examined, and the Department finds it to be in compliance with the
requisite criteria set forth in Rule Chapter 12-11, F.A.C. This response to your request
constitutes a TAA and is issued to you under the authority of section 213.22, F.S.
Facts
The XXXX is funded through a countywide municipal services taxing unit assessment. County
has assumed all administrative and operational functions of the library system. This includes the
operation of all library facilities located within the corporate limits of the City. The downtown
main library facility (XXXX square feet) is owned by the City and leased to the County pursuant
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

http://dor.myflorida.com/dor/
Florida Department of Revenue
Tallahassee, Florida 32399-0100

Page 2 of 4
Technical Assistance Advisement
to a separate lease agreement. As part of the countywide library system, the main library facility
is a community institution serving informational, recreational, and educational needs of the
citizens of County by providing free access to reading and audio-visual materials, and offering
public computing, database, and Internet access technology. County issued a formal solicitation
seeking a concessionaire to provide food and beverage concession services for XXXX to be
located at the County’s downtown main library. LLC submitted a proposal and was deemed the
most qualified concessionaire to provide such services.
County and LLC signed an agreement (“Agreement”). The Agreement with LLC requires LLC
to provide food and drink concessionaire services within the library facility. Per the terms of the
Agreement, LLC may use a defined portion of the library facility (approximately XXXX square
feet) to provide these services. LLC is required to pay County a monthly fee based on a
percentage of net sales.
A copy of the proposal and Agreement is included with the request.
Requested Advisement
Question #1. Is the library a publicly owned recreational facility?
Question #2. Is the monthly fee paid to County for the exclusive license to provide food and
drink concessionaire services within the public library subject to sales tax?
Taxpayer Position
Based on the analysis used by the Department in prior advisements, the library is a publicly
owned recreational facility. The fee is not subject to tax, as provided by s. 212.031(1)(a)10.,
Florida Statutes (“F.S.”)
Applicable Law and Discussion
Section 212.031, 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:

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
11. …

Page 3 of 4
Technical Assistance Advisement
Persons engaging in the business of renting, leasing, letting, or granting licenses for the use of
any real property are exercising a taxable privilege. See Section 212.031, F.S. An exemption
from the tax otherwise imposed for this privilege involves property that is leased, subleased,
licensed, or rented to persons providing food and drink concessionaire services within the
premises of a publicly owned recreational facility. See Section 212.031(1)(a)10., F.S.
“Exemptions to taxing statutes are special favors granted by the Legislature and are to be strictly
construed against the taxpayer.” State ex rel. Szabo Food Services, Inc. v. Dickinson, 286 So.2d
529, 530 (Fla. 1973).
Because no definition of "recreational facility" is provided by statute, it is necessary to look to
principles of statutory construction. 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).
The word "recreation" is defined in Merriam-Webster’s Collegiate Dictionary (Tenth Edition,
1999) as meaning:
… refreshment of strength and spirits after work; also: a means of refreshment or
diversion: HOBBY – recreational … adj
Merriam-Webster’s defines the word “facility” as meaning:
… something (as a hospital) that is built, installed, or established to serve a particular
purpose. Id.
We also note that no definition of the word “concessionaire” is provided by statute. MerriamWebster’s Collegiate Dictionary (Tenth Edition, 1999) defines “concessionaire” as meaning:
[T]he owner or operator of a concession; esp: one that operates a refreshment stand at a
recreational center.
County’s library is a place within the plain and ordinary meaning of “recreational facility,” as it
is a place built, installed, or established to serve the purposes of refreshing strength and spirit,
and for providing diversion. The library is publicly owned (i.e., owned by County). LLC, which
is granted the right to provide food and drinks at the library, is a concessionaire.
Questions and Response
Question #1. Is the library a publicly owned recreational facility?
Response: Yes.
Question #2. Is the monthly fee paid to County for the exclusive license to provide food and
drink concessionaire services within the public library subject to sales tax?
Response: No. The exemption provided for by s. 212.031(1)(a)10., F.S., applies.

Page 4 of 4
Technical Assistance Advisement
Concluding Statement
The monthly fee paid to County for space used at County’s library is not subject to Florida sales
tax, because Agreement is within the scope of the exemption found at Section 212.031(1)(a)10.,
F.S.
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 10 days of the date of this
letter.
Respectfully,

Charles Wallace
Technical Assistance & Dispute Resolution
850-717-7541
Record ID: 212046