Florida Sales Tax Exemption on Admissions for Resale

Sales tax is designed, in theory, to tax the final consumer of a product. There are all sorts of exceptions to this rule as well as exemptions, credits, and exclusions that help Florida sales tax law arrive at that theoretical goal. However, the most prevalent way most states achieve this “tax the final consumer” goal is through the Sale for Resale Exemption. For example, when Target buys products to put on the shelves, Target is able to give the supplier a “resale certificate” that exempts Target’s purchase from sales tax. Then, when Target sells the good to you, a customer, sales tax is charged on the sale. Probably the biggest exception to the “tax the consumer” rule in Florida has to do with Admissions, which has no sale for resale exemption under sec. 212.04(1)(c)(1), Florida Statutes. So when a concert promoter sells a large block of tickets to a concert ticket reseller, sales tax is charged on the purchase, even though the tickets are purchased for resale. The reseller is required to charge sales tax when the tickets are resold and then take a credit for sales tax already paid.

Unfortunately, sometimes the admission reseller is not allowed to take a credit for taxes paid on the original bulk ticket purchase. For example, if the reseller sells the tickets to a tax exempt entity, then a credit for sales tax paid on the original bulk ticket purchase is not been available. These types of inequities has caused problems in the industry, which caught the legislatures attention in 2017.

The new law provides that if the admission is sold to a tax exempt entity, the taxpayer may now obtain a refund for taxes paid on the admission at purchase. Additionally, if the first purchaser of the admission was from the same controlled group of corporations for federal income tax purposes as the original dealer of the admissions, and that purchasers goes on to sell the admission to a tax exempt entity, then that purchaser can get a refund from the dealer who in turn gets a refund from the Department of revenue.

Confusing? Well, what’s important to remember is that taxpayers only qualify for this exemption if they are reselling the ticket, or admission, to a tax exempt entity. This rules out most sales for resale. But if a taxpayer does resell to an exempt entity, they are owed a refund. The technicalities become relevant based on who the reseller is. Is the reseller is part of the same controlled group of corporations for federal income tax purposes as the original dealer of the admissions, then the reseller must go through the dealer for a refund as opposed to the Department of Revenue directly. Otherwise, the refund for the exemption goes directly through the Department of Revenue. While admissions are still a tricky thing in the sales tax world, at least a select group of resellers will now benefit from a new exemption for Florida’s sales tax.

For your convenience, the full text of the new statute is provided below:

212.04 Admissions tax; rate, procedure, enforcement.—

(1) (c)1. The provisions of this chapter that authorize a tax-exempt sale for resale do not apply to sales of admissions. However, if a purchaser of an admission subsequently resells the admission for more than the amount paid, the purchaser shall collect tax on the full sales price and may take credit for the amount of tax previously paid. If the purchaser of the admission subsequently resells it for an amount equal to or less than the amount paid, the purchaser may shall not collect any additional tax, nor shall the purchaser be allowed to take credit for the amount of tax previously paid.

2.a. If a purchaser resells an admission to an entity that is exempt from sales and use tax under this chapter for any reason other than sale for resale, the purchaser may seek a refund or credit from the department for the amount of tax it paid on its purchase.

b. For a refund, the purchaser shall provide proof of the exempt entity’s qualification for the exemption, as prescribed by rules of the department, and a copy of the ticket, invoice, or other documentation that provides evidence of the tax it paid on the admission with its refund application, whereupon the department shall issue a refund to the purchaser.

c. For a credit, the purchaser shall retain proof of the exempt entity’s qualification for the exemption, as prescribed by rules of the department, and a copy of the ticket, invoice, or other documentation that provides evidence of the tax it paid on the admission as long as required under s. 212.13.

d. The department shall look solely to the entity that provided exemption documentation for recovery of tax, if it determines that the entity was not entitled to the exemption.

3.a. If a purchaser of an admission from a related dealer who is a member of the same controlled group of corporations for federal income tax purposes as the purchaser resells such admission to an entity that is exempt from sales and use tax under this chapter for any reason other than sale for resale, the purchaser may seek a refund or credit for the amount of tax it paid on its purchase from the related dealer if it provides that related dealer with proof of the exempt entity’s qualification for the exemption, as prescribed by rules of the department.

b. Upon the purchaser’s request, a related dealer receiving the exempt entity’s documentation shall refund or credit the tax paid by the purchaser. If the related dealer has already remitted such tax to the department, it may then seek a refund or credit of the tax from the department. If the related dealer has not yet remitted such tax to the department, the related dealer may not seek a refund or credit of such tax, but may retain the exemption documentation in lieu of remitting the tax to the department.

c. The department shall look solely to the entity that provided exemption documentation for recovery of tax if it determines that the entity was not entitled to the exemption.