Sales and Use Tax TAA 19A-022 Admissions

November 14, 2019

XXXXXXX

XXXXXXX

XXXXXXX

Subject: Technical Assistance Advisement (“TAA”)

TAA 19A- 022

AMS#: XXXXXXXXXXX

Sales and Use Tax-Admissions

Sections 212.02(1) and 212.04, Florida Statutes (“F.S.”)

Rule 12A-1.005(4), Florida Administrative Code (“F.A.C.”)

XXXXXXXXX (“Petitioner”) (“Association”)

Business Partner Number: XXXX

FEIN: XX-XXXXXXX

XXXXXXXXXXXXXXX (“Community”)

Dear XXXXXXX:

This letter is a response to your petition dated September 24, 2019 for the Department’s

issuance of a Technical Assistance Advisement (“TAA”) to Petitioner regarding payments by

homeowner’s association members to the homeowner’s association. Your petition has been

carefully examined, and the Department finds it to be in compliance with the requisite criteria

set forth in Rule Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is

issued to you under the authority of section 213.22, F.S.

Issue

Whether certain payments made by homeowner’s association members to a homeowner’s

association are subject to the sales tax on admissions?

Facts

Association is organized and licensed as a homeowner’s association. Residents in Community

are required to be members of Association. Members are billed assessments for the use of

Association property. Association has one class of membership. Association purchased

recreational facilities including XXXXXXXXX. The area purchases are collectively referred to a

“Recreational Facilities.”

The Recreational Facilities are Association owned common areas for the use of Association

members. The governing documents characterize the Association members right to use

Association common property as an easement. The Association members will be billed an

assessment (“Recreational Facility Assessment”) on a pro rata basis for all Association expenses

to maintain the common areas owned by Association. The Association members are required

to pay the Recreational Facility Assessment pursuant to the governing documents. Association

will place a lien on Association member’s residence within Community for failure to pay the

assessment.

Applicable Law and Analysis

Section 212.04, F.S., provides that sales tax must be collected by an admission provider on the

sales price or amount received from the sale of admissions. Section 212.02(1), F.S., defines the

term “admissions” to includes dues and fees payments to a private club or membership club

that provides recreational facilities are admissions. Rule 12A-1.005(4)(d)3., F.A.C., provides the

following:

Fees paid to private clubs or membership clubs that do not entitle the payor to

the use of the club’s recreational or physical fitness facilities are not subject to

tax. Examples of such fees are:

****

3. Mandatory dues and fees paid to a condominium association, homeowners’

association, or cooperative association when they are required to be paid as a

condition of ownership or occupancy of real property and the club facilities are

part of the common elements or common areas of the real property.

As required by the Rule, the payments by members must be made to a condominium

association, homeowners’ association, or a cooperative association. These types of

associations are defined by ss. 718.103(2), 719.103(2), and 720.103(2), F.S. Here, Association is

licensed by the Florida Department of Business and Professional Regulation (“DBPR”) as a

homeowner association.

As provided by Rule 12A-1.005(4)(d)3., F.A.C., mandatory assessments paid by Association

members to Association as to the areas identified as Recreational Facilities will not be subject

to sales tax so long as the payments are made directly to Association to cover expenses

incurred by Association to maintain Association common areas, the payments are made as a

condition of ownership of the residential property in Community, and the Recreational Facilities

are Association common areas.

Response

The Recreational Facility Assessment will not be subject to sales tax so long as the criteria

provided for by Rule 12A-1.005(4)(d)3., F.A.C., are satisfied.

The exemption provided by the Rule does not apply to optional amounts paid, such as amounts

paid to use Recreational Facilities in addition to the assessment amount paid by each member.

The exemption also does not apply to amounts paid to use limited common property that has

restricted use. The exemption does not apply to amounts paid by non-residents to use

Recreational Facilities because the payments are not made as a condition of ownership.

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

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 10

days of the date of this letter.

Respectfully,

Chuck Wallace

Chuck Wallace

Technical Assistance & Dispute Resolution

(850) 717-7541

AMS #: XXXXXXXX