Were fees for licensing country-club kitchens, ballrooms, and restaurant space to a food concessionaire subject to Florida sales tax?

Plain-English summary

Florida found the clubhouse license fees exempt because the licensee operated a food-and-drink concession within a golf course, which the Department treated as a recreational facility.

The agreement limited the kitchens, ballrooms, and restaurant areas to a restaurant and catering operation primarily serving food and nonalcoholic beverages. Section 212.031(1)(a)10., effective July 1, 1999, exempted property leased or licensed to food-and-drink concessionaires within listed venues, including recreational facilities.

The Department also explained that the operator could seek refunds for tax collected after the exemption's effective date, but first had to refund the tax to the licensee and comply with the refund procedure and limitations period described in the ruling.

What this means for you

The exemption depended both on the venue and the licensee's use. Florida classified a golf course as a recreational facility and the restaurant/catering operator as the qualifying concessionaire.

Common questions

Q: Was a golf course a recreational facility? Yes, for this statutory exemption.

Q: Which areas were licensed? Kitchens, ballrooms, and restaurant areas in the clubhouse.

Q: Could the operator recover tax already remitted? Potentially, for qualifying periods, after refunding the tax to the licensee and following the cited refund rules.

Q: Did the license permit any use? No. The described agreement limited use to restaurant and catering activities unless the owner consented otherwise in writing.

Citations and references

• Fla. Stat. § 212.031(1)(a)10. — food-and-drink concessionaire exemption
• Fla. Stat. § 215.26(2) — refund limitations period described in the advisement
• Fla. Admin. Code r. 12A-1.014 — refund claims
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00A-006

Original ruling text

SUMMARY

QUESTION: Are the license fees received from a licensee of
the kitchens, ballrooms, and restaurant areas of a golf
course clubhouse exempt from tax pursuant to section
212.031(1)(a)10., F.S.?

ANSWER - Based on Facts Below: Yes. The license of a
portion of the premises of a golf course to a person
operating a restaurant and providing catering services is
exempt under section 212.031(1)(a)10., F.S., which provides
an exemption for property leased or licensed to a person
providing food and drink concessionaire services within the
premises of, among other things, a recreational facility.
The golf course is a "recreational facility," as that term
is used in the statute.

Feb 14, 2000

Re: Technical Assistance Advisement 00A-006
Sales & Use Tax - License to Use Real Property at Country
Club
Sections 212.031; 215.26, F.S.
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.

In your letter you state that your client has been collecting
and remitting sales tax on payments received for the license of

the kitchens, ballrooms, and restaurant areas of its golf course
clubhouse. The license agreement, which you enclosed, states
that the licensee shall use the licensed premises as a
"restaurant and catering facility engaged primarily in the
service of food and non-alcoholic beverages" and that the
licensee "shall not use or permit the use of the premises for
any other purpose" without the written consent of your client.

Section 212.031, F.S., was amended by the Florida legislature,
effective July 1, 1999. The amendment, found in Chapter 99-270,
L.O.F., exempts from sales tax license payments made in exchange
for the right to operate a food and drink concessionaire service
on the premises of certain listed facilities, among which is a
"recreational facility." You therefore ask whether a golf
course is considered a "recreational facility" under section
212.031, F.S., as amended, and, if so, whether your client is
exempt from collecting sales tax on the licensing of the dining
facilities.

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 a golf
course is a "recreational facility" as that term is used in
section 212.031(1)(a)10., F.S. No definition of the term
"recreational facility" is provided 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.

The word "facility" is defined in The Random House Dictionary of
the English Language, The Unabridged Edition, as "something
designed, built, installed, etc., to serve a specific function
affording a convenience or service...."

It accordingly appears that the term "recreational facility," as
used in section 212.031(1)(a)10., F.S., includes a golf course.
The exemption, therefore, applies to property leased or licensed
"to a person providing food and drink concessionaire services
within the premises of" a golf course. No tax would be due on
the payments received by your client in exchange for the license
of the dining facilities.

You inquired about the procedure for obtaining refunds since
your client has been collecting tax from the licensee and
remitting it to the State. Rule 12A-1.014, F.A.C., describes
the rules applicable to refund claims. In obtaining a refund,
your client must be able to state that it has refunded the taxes
to the person ultimately paying the taxes, which in your
situation means that your client must be able to state that it
has refunded the taxes to the licensee. A refund may be claimed
on Form DR-26, which is available on the Department's web site
at http://sun6.dms.state.fl.us/dor.

Section 215.26, F.S., states in subsection (2) the statute of
limitations applicable to refund claims. An application for a
refund of taxes paid on or after July 1, 1999, must be filed
with the Comptroller within 3 years of the date the tax was
paid.

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 # 40024