Were license fees paid by food and drink concessionaires at a permanent festival park exempt from Florida sales tax?

Plain-English summary

Florida exempted the license fees paid by food and drink concessionaires operating within the permanent festival park. The park was available for lease year-round and hosted periodic antique-vehicle, machinery, swap-meet, racing, music, and entertainment events, so the Department treated it as a recreational facility.

The promoter licensed up to 30 concessionaires per event and charged 30% of gross sales subject to an advance minimum. Section 212.031(1)(a)10. exempted the portion of a recreational facility licensed to a person providing food and drink concessionaire services.

The exemption did not cover leasing or licensing the entire park. It applied only to the concession space or right to provide food and drink services within the existing facility.

What this means for you

The venue had to exist as a permanent recreational facility apart from the concession. A whole-property rental did not become exempt merely because food vendors would operate there.

Common questions

Q: Was the park considered a recreational facility? Yes.

Q: Did the percentage-based fee qualify? Yes, for the described concession licenses.

Q: Was a lease of the entire park exempt? No.

Citations and references

• Fla. Stat. §§ 212.02 and 212.031(1)(a)10. — real-property licensing and food concessionaire exemption
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00A-002

Original ruling text

SUMMARY

QUESTION: Are the license fees received from
concessionaires who sell food and drink on the premises of
a permanent festival park exempt from tax pursuant to
section 212.031(1)(a)10., F.S.?

ANSWER - Based on Facts Below: Yes. As a permanent
facility holding periodic events, the festival park would
fall within the ordinary meaning of the term "recreational
facility," as that term is used in the statute. The
exemption does not, however, extend to the lease or license
of the entire facility. It is specifically stated in
section 212.031(1)(a)10., F.S., that the exemption applies
only to property leased or licensed "to a person providing
food and drink concessionaire services within the premises
of a... recreational facility...." That language
presupposes the existence of a recreational facility and
exempts only that portion of the premises within that
facility that is leased or licensed to a person providing
food and drink concessionaire services.

Jan 19, 2000

Re: Technical Assistance Advisement 00A-002
Sales & Use Tax - Lease or License of Festival Space by
Concessionaire
Sections 212.02; 212.031, F.S.
XXX ("Taxpayer")
F.E.I. # XX

Dear :

This is in response to your letter dated XX, for the
Department's issuance of a Technical Assistance Advisement
("TAA") concerning the above referenced party and matter. Your
letter has been carefully examined and the Department finds it
to be in compliance with the requisite criteria set forth in

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.

Taxpayer is in the festival promotion business and promotes
three events at a facility ("Park") in XX, Florida. Taxpayer is
a sister corporation to the corporation that is the owner of the
Park. All leasing of the property is done through Taxpayer.
The Park is available for lease 365 days per year by any person
or entity who wishes to promote outdoor musical, automotive, or
similar events at the Park.

At the events promoted by Taxpayer, antique automobile and
machinery enthusiasts display their automobiles and machinery.
Swap meet auctions and antique car races may take place. The
events also feature live music and entertainment.

At each of the three events promoted by Taxpayer, Taxpayer
licenses concessionaires to sell food and drink, charging a
license fee equal to 30 percent of gross sales, with a minimum
fee paid in advance. The number of licensed concessionaires may
range as high as 30 per event and will vary from event to event.

Requested Advisement

Whether the license fees received from concessionaires who sell
food and drink on the premises of the Park are exempt from tax
pursuant to section 212.031(1)(a)10., F.S.

Applicable Law and Discussion

Section 212.031(1)(a), F.S., sets forth the general rule that
the renting, leasing, or licensing the use, of real property is
subject to sales tax unless the property is exempt under one of
a number of specified exemptions. One of those exemptions is
contained in section 212.031(1)(a)10., F.S., which was amended
effective July 1, 1999, and provides an exemption for property:

Leased, subleased, licensed, or rented to a person
providing food and drink concessionaire services within the
premises of a convention hall, exhibition hall, auditorium,

stadium, theater, arena, civic center, performing arts
center, recreational facility, or any business operated
under a permit issued pursuant to chapter 550....

The first question that must be answered is whether the Park is
a "recreational facility" as that term is used in section
212.031(1)(a)10., F.S. The term "recreational facility" is not
defined by statute. Thus, it is necessary to look to principles
of statutory construction.

Words of common usage, when used in a statute, should be
construed in their plain and ordinary sense. Pederson v. Green,
105 So.2d 1 (Fla. 1958). The word "recreation" is defined in
Webster's New Twentieth Century Dictionary, Unabridged, Second
Edition, 1968, as follows:

1. refreshment in body or mind, as after work, by some form
   of play, amusement, or relaxation.

2. any form of play, amusement or relaxation used for this
   purpose, as games, sports, hobbies, reading, walking, etc.

Additionally, under the rule of statutory construction referred
to as "noscitur a sociis," the meaning of a word contained in a
statutory provision is, or may be, known from the accompanying
words. Or, to put it another way, words used together in a
statute take color from each other. See Ex parte Amos, 112 So.
289 (Fla. 1927). The term "recreational facility" is used with
terms such as "civic center, " "convention hall," "auditorium,"
etc. All of these types of facilities are permanent in nature.
They are not facilities that exist merely for a few days. They
generally are utilized throughout the year, although events at
such facilities do not take place on a continuous basis.

As a permanent facility holding periodic events, the Park would
fall within the ordinary meaning of the term "recreational
facility," as that term is used in the statute. The exemption
does not, however, extend to the lease or license of the entire
facility. It is specifically stated in section
212.031(1)(a)10., F.S., that the exemption applies only to
property leased or licensed "to a person providing food and

drink concessionaire services within the premises of a...
recreational facility...." That language presupposes the
existence of a recreational facility and exempts only that
portion of the premises within that facility that is leased or
licensed to a person providing food and drink concessionaire
services.

The term "concessionaire" generally refers to one holding a
concession, and the term "concession" is defined in Webster's
New International Dictionary as:

5. A grant or lease of a portion of premises for some
   specific use, or of a right to enter upon premises for some
   specific purpose; as, a concession at a fair for a lunch
   counter.

Accordingly, the lease or license referred to in section
212.031(1)(a)10., F.S., is a lease of a portion of the premises
of a facility, or in the case of a license, a grant of the right
to provide services within the facility, but the exemption does
not encompass the lease of the entire facility.

In conclusion, because the Park is a permanent recreational
facility, any licenses by Taxpayer "to a person providing food
and drink concessionaire services within the premises" would be
exempt.

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 upon 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 from that which is 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 that 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 that 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,

Robert D. Heyde
Senior Attorney
Control # 39854