Purchases by Municipal Golf Courses Exempt
Generally, sales made to the government, in its variety of forms, are exempt when the government pays the bill directly. However, in situations where the government reimburses someone who in turn pays the seller directly, those transactions are generally not exempt. But exceptions are made to this rule and the newest one is for something dear to the hearts of the large group of retired Floridians: golf courses.
As lawyers know, part of our job is to take a word and argue that it means what we want it to mean. But legislatures put us to shame in their ability to take a term, even a defined term, and morph it into something new. This new exemption is the perfect example. The phrase “when payment is made directly to the dealer by the government entity” is pretty straightforward; the government entity directly pays a dealer. However, under section 212.08 (6)(d), Florida Statutes, that phrase has now been expanded to
“includ[e] situations in which an entity under contract with a municipality to maintain and operate a municipally owned golf course pays for a purchase or lease for the operation or maintenance of that golf course using the golf course revenues or other funds provided by the municipality for use by that entity.”
In other words, if Golf Guys, LLC is under contract with Anywhere, Florida to maintain the golf course, and pays Larry Lawn Guy directly from revenues of the golf course to mow the lawn, then that otherwise taxable transaction is now exempt. There are, as with any exemption, strings attached. For example, the golf course must provide youth education programs that are delivered on an ongoing basis by a nonprofit organization. But those hoops are much less burdensome to jump through than having the municipality pay bills directly or the golf course or, alternatively, to pay tax on all its maintenance contracts.
Only in Florida would this be an issue substantial enough to result in an explicit exemption in the statute. This is particularly true when this reimbursement relationship with the municipality is directly contradictory to the statutory language under which it now is exempt. However, in the state of endless golf courses, the financial impact of this is substantial. And who would complain about easing the financial burden on the places that retirees have waited a lifetime to spend their days enjoying?
Jeanette Moffa is an associate attorney of the Law Offices of Moffa, Sutton, & Donnini, P.A. Ms. Moffa concentrates in the area of State and Local Taxation with a heavy emphasis on sales and use tax. In addition to Florida and multi-state sales and use tax issues, she also works on appellate administrative law cases. When she is not practicing law, she teaches English as an adjunct professor at Broward College. You can read more about Jeanette at her bio here.
Section 28. Effective January 1, 2018, paragraph (ooo) is added to subsection (7) of section 212.08(6)(d), Florida Statutes, to read:
(d) For purposes of paragraph (a), the phrase “when payment is made directly to the dealer by the governmental entity” includes situations in which an entity under contract with a municipality to maintain and operate a municipally owned golf course pays for a purchase or lease for the operation or maintenance of that golf course using the golf course revenues or other funds provided by the municipality for use by that entity. This paragraph applies to a municipally owned golf course that is:
1. Located in a county with a population of at least 2 million residents.
2. The site upon which youth education programs are delivered on an ongoing basis by a nonprofit organization that is exempt from federal income tax under s. 501(c)(3) of the Internal Revenue Code.