Sales and Use Tax TAA 14A-018 - Parking, Docking and Tiedown

Your letter provides the following in part:

Facts

As of the date of this letter, Taxpayer operates off airport parking lots located in XXXX County Florida (XXXX), and in XXXX County Florida (XXXX), whereby the general public can self- park and valet-park at fixed parking rates in unassigned parking spaces. The parking rates are subject to sales tax as license fee consideration paid for the use of real property at the rates provided by Florida Statutes (F.S.) [212.03] (at the rate of 6 percent in XXXX County), plus applicable surtax (7% in XXXX County).

On May 28, 2010, Taxpayer’s operations at parking lot located at XXXX, Florida were audited by Florida Department of Revenue for the periods of 08/01/2006-07/31/2009, Audit #: XXXX; and Taxpayer was found liable for additional sales tax and required to collect and remit sales tax at the rate of 6.59 percent. . . .

Pursuant to Florida Administrative Code Rule 12A-15.010, and in compliance with the Audit # XXXX determination and requirement, Taxpayer now collects from its customers and remits 
to FL Department of Revenue sales tax at the amount of 6.59 percent in XXXX County Florida.

In February 2012, Taxpayer has opened and started to operate its off airport parking lot in XXXX County, and pursuant to Florida Administrative Code Rule 12A-15.010, and in compliance with the Audit # XXXX determination and requirement is collecting from its customers and remitting to Florida Department of Revenue sales tax at the amount of 7.51 percent (including 1% of XXXX County surtax).

***

Taxpayer believes that the nature of parking industry, Taxpayer’s business practices, tax calculation and collection methods allow Taxpayer to use an effective sales tax rate of 6 percent in XXXX County and 7 percent in XXXX County:

A. The sales tax are collected at the time of sale, calculated and collected on each separate sales transaction;

B. The sales tax are added to the sales price, 

C. The amount of the sales tax is separately stated on each parking customer receipt; 

D. The amount of sales tax collected at the time of sale is remitted to the Department of Revenue.

Requested Advisement

The Taxpayer requests that the Department issue a Technical Assistance Advisement that addresses the following:

1. May Taxpayer, based on the documentation of the audit and sampling which has revealed that Taxpayer rate of sales tax is 6.0056, collect and remit sales tax at the rate of 6% (plus applicable discretionary sales tax)?
2. Is the audit and sampling conducted by [the Auditor] during the audit sufficient to establish a lesser rate for Taxpayer, and the difference of 0.0056% between the tax rate of 6% and the rate determined by the sampling performed By [the Auditor], is not significant, and Taxpayer is not required to collect and remit sales tax at the higher rate of 6.59% and 7.51%?
3. [Is the Taxpayer required to collect and remit sales tax to Florida Department of Revenue at the tax rates of 6.59 and 7.51 percent and not at 6 and 7 percent when the tax is added to the sales price and separately shown on the customer’s receipt?]

Applicable Authority and Discussion

Section 212.03(6), F.S., states that “. . . every person is engaged in a taxable privilege who leases or rents parking or storage spaces for motor vehicles in parking lots or garages . . . .” The statute concludes with the following sentence: “For the exercise of this privilege, a tax is hereby levied at the rate of 6 percent on the total rental charged.” Section 212.03(6), F.S., mandates that the sales tax be imposed on the “total rental charged.”

Section 212.12(9), F.S., authorizes the use of brackets on sales involving any fractional part of a dollar. The bracket system applies to all taxable license fees and rental charges. Section 212.12(9)(h), F.S., provides that for sales in amounts of more than $1, that occur in counties that do not impose a discretionary surtax, 6 percent shall be charged upon each whole dollar amount of the sales price, and the bracket system applies to any fractional part of a dollar. Section 212.12(9)(i), F.S., provides that for sales in amounts of more than $1, that occur in a county imposing a 1 percent discretionary surtax, 7 percent shall be charged upon each whole dollar amount of the sales price, and the bracket system applies to any fractional part of a dollar.

Section 212.07(2), F.S., provides the following in part:

. . . Where it is impracticable, due to the nature of the business practices within an industry, 
to separately state Florida tax on any charge ticket, sales slip, invoice, or other tangible evidence of sale, the department may establish an effective tax rate for such industry. . . .

Rules 12A-1.080 and 12A-15.010, F.A.C., address sales by concessionaires at various venues and authorize the use of a divisor to calculate the tax due in cases where it is “impracticable to separately state” sales tax on a sales slip or invoice. However, both rules provide that such dealers are required to remit to the amount of tax collected when they do separately state the tax on an invoice.

Taxpayer cites Technical Assistance Advisements (TAA) 92A-068 to support its position that its “business practices, tax calculation and collection methods allow Taxpayer to use an effective sales tax rate.” Section 213.22(1), F.S., provides that “[t]echnical assistance advisements shall have no precedential value except to the taxpayer who requests the advisement.” Further the Taxpayer’s business model is distinguishable from the subject taxpayer of TAA 92A-068. In the cited TAA, the Department

determined the taxpayer’s operations to be “most closely comparable to the activities of a concession stand.” The Department determined that the subject taxpayer was authorized to use an effective tax rate because it was impracticable to separately state sales tax.

In this case, the Taxpayer has provided in its request for assistance that “[t]he amount of the sales tax is separately stated on each parking customer receipt.” This is supported by copies of customer receipts included with the Taxpayer’s request. Because of this, the use of an effective tax rate, as authorized by s. 212.07(2), F.S., is not applicable to the Taxpayer.

Conclusion

Question 1: 1. May Taxpayer, based on the documentation of the audit and sampling which has revealed that Taxpayer rate of sales tax is 6.0056, collect and remit sales tax at the rate of 6% (plus applicable discretionary sales tax)?

Response: Based on the provisions of section 212.12(9), F.S., the Taxpayer should calculate the sales tax due by applying 6% in XXXX County and 7% in XXXX County on parking charges imposed in whole dollar amounts. In cases where the parking charges include fractions of a dollar, the Taxpayer can calculate the tax due by multiplying the whole dollar amounts by 6 or 7 % and applying the applicable bracket rate amount to the portions of the charge that are fractions of a dollar.

Question 2. Is the audit and sampling conducted by [the Auditor] during the audit sufficient to establish a lesser rate for Taxpayer, and the difference of 0.0056% between the tax rate of 6% and the rate determined by the sampling performed by[the Auditor], is not significant, and Taxpayer is not required to collect and remit sales tax at the higher rate of 6.59% and 7.51%?

The use of an effective rate is not authorized in cases where the Taxpayer is able to separately state the sales tax collected. The Taxpayer has provided both in its request and with sample invoices that it does separately state the sales tax due. Because of this, the Taxpayer should remit the tax collected and not apply an effective rate to determine the amount due.

Question 3. [Is the Taxpayer required to collect and remit sales tax to Florida Department 
of Revenue at the tax rates of 6.59 and 7.51 percent and not at 6 and 7 percent when the tax is added to the sales price and separately shown on the customer’s receipt?]

Response: No, the Taxpayer is not required to collect sales tax at the rates of 6.59 and 7.51 percent. The Taxpayer should calculate the sales tax due by applying 6% in XXXX County and 7% in XXXX County on parking charges imposed in whole dollar amounts. In cases where the parking charges include fractions of a dollar, the Taxpayer can calculate the tax due by multiplying the whole dollar amounts by 6 or 7 % and applying the applicable bracket rate amount to the portions of the charge that are fractions of a dollar.

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 that 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 15 days of the date of this letter.

Sincerely,

Brinton Hevey 
Tax Law Specialist 
Technical Assistance and Dispute Resolution 850/717-6839

Record ID: 165972