Was the airport-taxiway portion of a mixed-use real-property lease exempt from Florida sales tax, and how could rent be allocated?

Plain-English summary

Florida exempted the portion of an airport-property lease covering areas used exclusively to taxi aircraft.

The tenant leased airport space that included hangars, paved taxiing areas, and a retention pond. The exemption applied only if the designated taxiways were used solely for aircraft taxiing—not for aircraft parking or ordinary vehicle traffic.

Because the lease covered taxable and exempt uses, the parties proposed allocating rent by square footage. Florida found that method reasonable using the information available to the landlord and tenant. Hangar, tie-down, or aircraft-storage areas remained taxable under the provisions discussed in the ruling.

What this means for you

Airport landlords and tenants

Document exclusive taxiway use. Shared use for parking or regular vehicle traffic can defeat the exemption for that area.

Accounting teams

A supportable square-footage allocation can divide total rent between exempt taxiways and taxable portions of a mixed-use airport lease.

Common questions

Was taxiway rent exempt? Yes, for areas used exclusively to taxi aircraft.

Could aircraft park there? No, not if the area was to remain within this exemption.

How could the parties allocate rent? By a reasonable square-footage calculation based on their available property information.

Citations and references

• Fla. Stat. Sec. 212.031(1)(a)7.
• Fla. Stat. Sec. 212.031(1)(b)
• Fla. Admin. Code R. 12A-1.070(1)(a)6.c. and (8)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 20A-015

Original ruling text

TAX: Sales and Use Tax
TAA NUMBER: 20A-015
Subject: Rental of real property
STATUTE CITE(S): Section 212.031, Florida Statutes (F.S.)
RULE CITE: Rules 12A-1.070, Florida Administrative Code (F.A.C.)
QUESTION:
Whether taxiways at an airport used exclusively for taxiing aircraft are not taxable?
ANSWER:
The areas at an airport used exclusively to taxi aircraft is not subject to tax. The determination
of the portion of the rental not subject to tax may be done by using square footage information
available to the landlord and tenant.

August 21, 2020

XXX
XXX
XXX
Re:

Technical Assistance Advisement No. 20A-015
AMS #: 354959
Sales and Use Tax
Real Property Rentals; Airport Taxiways
Section 212.031, Florida Statutes (F.S.)
Rule 12A-1.070, Florida Administrative Code (“F.A.C.”)
XXX (“Petitioner”)(“Tenant”)
FEIN: XXX
XXX (“Landlord”)

Dear XXX:
This is in response to your request dated March 19, 2020, for a Technical Assistance
Advisement (TAA) pursuant to s. 213.22, F.S., and Rule Chapter 12-11, Florida Administrative

Florida Department of Revenue
Page 2

Code (F.A.C.), concerning XXX rental charges. 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.
FACTS
Tenant operates airport hangars. XXX operates an airport. Tenant and XXX entered into a lease
agreement involving airport space, including taxiing areas, hangar space, and a retention pond.
The request provides that the XXX determined that the lease provided for 1.8 acres of taxiing
areas. The remainder of the leased premises were for hangars and a retention pond.
Tenant provided diagrams of the leased premises. The taxiways include most of the paved
areas surrounding the hangars.
REQUESTED RULINGS
Tenant and XXX maintain that the sales tax imposed on real property rentals does not apply to
the taxiways. Tenant proposes to allocate the taxability of the rental payments based on the
square feet of the areas. Tenant and XXX indicate that the 1.8 acres for the taxiway areas
divided by the total acreage of the leased premises should be applied to the total rental to
determine the portion of the rent not subject to sales tax.
LAW AND DISCUSSION
Section 212.031, F.S., requires landlords to collect sales tax on the total rent received from
leasing real property. Section 212.031(1)(a)7., F.S., provides an exemption for property used at
an airport exclusively for the purpose of aircraft taxiing.
The exemption only applies if the areas designated as taxiways by the XXX and Tenant are
exclusively (solely) used for taxiing purposes. The areas cannot also be used to park aircraft or
for regular vehicular traffic. If the hangar areas are used for tie-down or storage space for
aircraft, then those portions of the hangar areas are subject to the tax imposed by s. 212.03(6),
F.S., which is the uniform rate other than the reduced rate imposed by s. 212.031, F.S.
Section 212.031(1)(b), F.S., provides for allocation of rental charges involving multi-use leased
property when a portion of the property is not subject to sales tax. The statute provides for an
allocation based on the information available. Tenant and XXX propose to allocate the rental
charge using the square footage information obtained by the parties. Rule 12A-1.070(1)(a)6.c.,
and (8), F.A.C., provide examples of the use of square footage information to apply a proration
allocation.
RESPONSE

Florida Department of Revenue
Page 3

The area for taxiways leased by Tenant from XXX are not subject to sales tax so long as the
property is exclusively used as a taxiway and not any other use. The method to allocate the
total rental charge proposed by Taxpayer is a reasonable method to allocate the taxable and
nontaxable portions of the rental charge.
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.
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: 354959