Was a mandatory student fee for parking access and campus shuttle service taxable, and could part be allocated to transportation?

Plain-English summary

Florida treated the parking portion of a mandatory student transportation fee as a taxable license to use real property.

Every student paid the fee and received the right to a parking permit, whether or not the student owned a vehicle. The fee also funded free campus shuttle service. Because the arrangement combined taxable parking access with nontaxable transportation, the institution could use a reasonable allocation.

Florida accepted the proposed approach based on the number of students paying the fee and the number of parking spaces. The resulting percentage is redacted in the ruling.

What this means for you

Colleges and universities

A mandatory fee can still contain a taxable parking-license component even when many students do not use parking.

Accounting teams

Support any split between taxable and nontaxable services with objective capacity and usage information.

Common questions

Was the entire fee exempt? No.

Why was part taxable? Payment granted a license to park on campus property.

Could the shuttle portion be excluded? Yes, through a reasonable allocation.

Citations and references

• Fla. Stat. Sec. 212.03(6)
• Fla. Stat. Sec. 212.031(1)(c)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 20A-004

Original ruling text

QUESTION:
Whether certain mandatory fees are taxable as a license to use real property, and if so, is a
portion of the fee allocable as not subject to sales tax when bus transportation is also provided,
ANSWER:
The fee is a taxable license to use real property with a portion of the fee subject to reasonable
allocation.

March 6, 2020
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
Re:

Technical Assistance Advisement No. 20A-004
Sales and Use Tax
Real Property Rentals
Sections 212.02, 212.03, and 212.031, Florida Statutes (F.S.)
Rule 12A-1.070, Florida Administrative Code (“F.A.C.”)
XXXXXXXX (“Petitioner”) (XXXXXXXXX)
Business Partner Number: XXXXX
FEIN: XX-XXXXXX
XXXXXXXXXXXXX (“Fee”)

Dear XXXXX:
This is in response to your request dated January 15, 2020, for a Technical Assistance
Advisement (TAA) pursuant to s. 213.22, F.S., and Rule Chapter 12-11, Florida Administrative
Code (F.A.C.), concerning Fee charged to students. An examination of your letter has
established that 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.

March 6, 2020
Florida Department of Revenue
Page 2

FACTS
Petitioner requires all students to pay Fee each semester when tuition is paid. Payment of the
Fee is mandatory regardless if the student has a vehicle or not. Payment of Fee entitles
students to a parking permit. The Fee funds are used by Petitioner to support the
transportation infrastructure. In addition to parking, students receive free shuttle bus service
on campus. The parking permit is linked to the student’s license plate.
The Fee amount for students is $XXXXXX for each student during the Fall and Spring semester.
The Fee amount is $XXXXX for the Summer semester. Petitioner has XXX parking spaces for
XXXX students.
REQUESTED RULINGS
Petitioner does not believe sales tax applies to Fee when paid by students. Petitioner believes
that if the Department determines Fee to be subject to sales tax, then an apportionment should
be made. Petitioner proposes that the taxable amount of Fee should be allocated using the
number of parking spots available and the number of students. Petitioner claims that XX% of
Fee is subject to sales tax when using that formula. Petitioner cites to the method used in TAA
01A-040 and TAA 11A-017 involving similar fees for parking and bus transportation.
LAW AND DISCUSSION
Section 212.03(6), F.S., requires every person who leases or rents parking spaces for motor
vehicles in parking lots or to collect sales tax on the total rental charge. Section 212.031(1)(a),
F.S., provides 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 ….” Section
212.02(10)(i), F.S., defines the word “License.” With reference to the use of real property, it
means “the granting of a privilege to use or occupy a building or a parcel of real property for
any purpose.”
A license to use real property is a personal privilege to do one or more acts on the land of
another without possessing any interest in the land, such as the license for students to park in
designated areas on campus in this case. Since s. 212.03(6), F.S., does not include the license to
use parking spaces, the tax provided for by s. 212.031, F.S., applies.
Section 212.031(1)(c), F.S., provides the following in pertinent part:
For the exercise of such privilege, a tax is levied in an amount equal to 6 percent
of and on the total rent or license fee charged for such real property by the
person charging or collecting the rental or license fee. The total rent or license
fee charged for such real property shall include payments for the granting of a

March 6, 2020
Florida Department of Revenue
Page 3

privilege to use or occupy real property for any purposes and shall include base
rent, percentage rents, or similar charges…. Payments for intrinsically valuable
personal property such as franchises, trademarks, service marks, logos, or
patents are not subject to tax under this section. In the case of a contractual
arrangement that provides for both payments taxable as total rent or license fee
and payments not subject to tax, the tax shall be based on a reasonable
allocation of such payments and shall not apply to that portion which is for the
nontaxable payments.
Since Fee is a taxable license to use real property, the tax imposed by s. 212.031, F.S., applies.
Petitioner is required to demonstrate that the allocation method is reasonable. Petitioner
maintains that XX% of the students paying the fee do not apply for a permit to park, and would
only be using the other transportation services, such as the shuttle bus service. Therefore, the
allocation formula proposed by Petitioner, which will allocate XX% of the Fee funds received as
subject to tax, is reasonable based on the information received.
RESPONSE
The Fee is subject to sales tax as consideration paid for the license to use real property.
Petitioner may allocate a portion of the Fee (XX%) as not subject to sales tax based on the
number of students paying the Fee and the number of available spaces.
Section 212.031, F.S., requires property owners, such as Petitioner to collect sales tax from
amounts received from the license to use real property. The sales tax rate provided for by s.
212.031, F.S., applies.
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
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 documents are public
records under Chapter 119, F.S., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Your name, address, and any other details, which might lead to
identification of the taxpayer, must be deleted before disclosure.

March 6, 2020
Florida Department of Revenue
Page 4

In an effort to protect the confidentiality of such information, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, backup
material and response within fifteen days of the date of this advisement.
Sincerely,

Chuck Wallace
Chuck Wallace
Conferee
Technical Assistance and Dispute Resolution
Record ID: 318804