TAA 22A-011 Rentals

Question: Are voluntary donations paid to Taxpayer by retailers located at a Florida shopping complex subject to Florida sales and use tax? 

Answer: The voluntary donations paid to Taxpayer by retailors located at the Florida shopping complex are not subject to Florida sales and use tax. 

June 1, 2022

Technical Assistance Advisement 22A-011

Sales and Use Tax – Rentals, Leases Tangible Personal Property

XXXXXX (“Taxpayer”)

FEI No. XXXXXX

BP No. XXXXXX

Section 212.031, Florida Statutes (F.S.)

Rule 12A-1.070, Florida Administrative Code (F.A.C.)

Dear XXXXXX: 

This letter is a response to your petition dated XXXXXX, for the Florida Department of Revenue’s (the “Department’s”) issuance of a Technical Assistance Advisement ("TAA") with regard to whether voluntary donations received are subject to Florida sales and use tax. Your petition has been carefully examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, Florida Administrative Code. This response to your request constitutes a TAA and is issued to you under the authority of section 213.22, F.S. 

Requested Advisement 

Are voluntary donations paid to Taxpayer by retailers located at a Florida shopping complex subject to Florida sales and use tax?

Facts as Provided 

Retailers located in the XXXXX, Florida, rent their commercial property from XXXXX (the landlord). Taxpayer is a non-profit 501(c)(3) company associated with landlord for the purpose of providing cultural, charitable, and entertainment activities for the shopping complex. Activities are funded by voluntary donations paid by the retailers to Taxpayer.¹ All donations collected by the retailers are forwarded to Taxpayer, along with a 5.5% sales tax² which Taxpayer remits to the state. 

No goods or services are provided by Taxpayer to the retailers. In addition, Taxpayer has provided a copy of written lease agreement between the retailers and the landlord, which confirms that funding of Taxpayer is not a requirement of the lease.

Applicable Law and Discussion 

Section 212.031(1), F.S., provides the following, in pertinent part: 

(a) It is declared to be the legislative intent that every person is exercising a taxable privilege who engages in the business of renting, leasing, letting, or granting a license for the use of any real property…. 

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(c) For the exercise of such privilege, a tax is levied at the rate of 5.5 percent of and on the total rent or license fee charged for such real property by the person charging or collecting the rental or license fee. The total rent or license fee charged for such real property shall include payments for the granting of a privilege to use or occupy real property for any purpose and shall include base rent, percentage rents, or similar charges. Such charges shall be included in the total rent or license fee subject to tax under this section whether or not they can be attributed to the ability of the lessor’s or licensor’s property as used or operated to attract customers…. (Emphasis added)

Rule 12A-1.070(1)(a),(4)(a)(b)(f), F.A.C., provides the following, in pertinent part: 

(1)(a) Every person who rents or leases any real property or who grants a license to use, occupy, or enter upon any real property is exercising a taxable privilege…. 

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(4)(a) The tenant or person actually occupying, using, or entitled to use any real property from which rental or license fee is subject to taxation under s. 212.031, F.S., shall pay the tax to his immediate landlord or other person granting the right to such tenant or person to occupy or use such real property.

(b) The tax shall be paid on all considerations due and payable by the tenant or other person actually occupying, using, or entitled to use any real property to his landlord or other person for the privilege of use, occupancy, or the right to use or occupy any real property for any purpose. The amount of tax due must be calculated with the use of the applicable effective sales tax brackets. (Emphasis added) 

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(f) The tax shall be due and payable at the time of the receipt of the rental or license fee payment by the lessor or other person who receives the rental or payment. The owner, lessor, or person receiving the rent or license fee shall remit the tax to the Department at the times and in the manner provided in Rule 12A-1.056, F.A.C.

Absent a specific exemption, the lease or rental of real property in Florida is subject to Florida sales and use tax. The tax due is levied at the rate of 5.5 percent on the total consideration to use or occupy the real property. See s. 212.031, F.S., and Rule 12A-1.070, F.A.C. 

A review of the documentation and lease agreement provided shows that the voluntary donation is not a part of the consideration for the lease or rental of real property located at the shopping complex. Donations are not required to be paid to Taxpayer or the landlord as a condition of the lease. In addition, no goods or services are provided to the retailers by Taxpayer. Therefore, the voluntary donations received by Taxpayer from the retailers at the shopping complex are not subject to tax.

Conclusion 

The voluntary donations paid by retailors located at the Florida shopping complex to Taxpayer are not subject to Florida sales and use tax. 

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.

Alan R. Fulton 

Revenue Program Administrator I 

Technical Assistance & Dispute Resolution

^{(1) The retailers solicit contributions from their customers, calculated as 2% of the retail sales transactions. Retailers can choose whether to solicit contributions from their customers, and customers are free to contribute or not as they choose. Although not relevant to the question being presented, it is noted that the retailers collect and remit sales tax from the customer on any contribution the customer makes.} 

^{(2) This is presumed to be the tax rate due on the rental of commercial property under s. 212.031, F.S}