Was an affiliated real-property distribution and leaseback a taxable commercial lease or a nontaxable financing arrangement and mortgage?

Plain-English summary

Florida treated the affiliated “lease” as a nontaxable financing arrangement and mortgage, not a taxable rental of commercial real property. The Department looked beyond the document title and concluded that the structure's substance was to secure acquisition financing.

A parent acquired an automobile, parts, and service business. At the lender's insistence, the parent formed a single-member, bankruptcy-remote special-purpose entity to borrow the money and hold title to the real property. That entity then “leased” the property to the operating business.

The operating business and titleholder were both owned by the parent and treated as disregarded entities for federal and Florida income-tax purposes. The operating business and parent guaranteed the loan.

Six factors showed financing rather than rent

The Department emphasized:

1. Express intent: the documents said the titleholder was created solely to satisfy the lender and the parties intended financing, not a true lease.
2. A secured debt: the special-purpose entity was the borrower on a promissory note and mortgage.
3. Debt-service payments: base “rent” equaled principal and interest owed to the lender rather than market rent and was paid directly to the lender.
4. Single-purpose titleholder: the entity had only $100 of initial capital and tightly limited activities centered on owning and financing the property.
5. Ownership risks and benefits: the operating business bore most short- and long-term obligations involving improvements, insurance, indemnity, casualty, condemnation, and environmental matters.
6. Required title transfer: the operating business had to buy the property no later than thirty days after the loan term ended, or earlier after specified condemnation or casualty events.

Taken together, those facts showed that the “lease” was a vehicle for repaying secured acquisition debt. The Department therefore found no sales tax due under section 212.031 for this transaction.

No single factor controlled

The ruling noted that related-party rent, mortgage payments made for a related lessor, property taxes, maintenance, and utilities could ordinarily be taxable consideration under the rules then in effect. Even the debt-linked base rent, standing alone, could point toward taxable rent.

The result changed only because the full document set consistently showed a secured financing arrangement. Calling a transaction a financing arrangement—or matching payments to debt service—would not by itself produce the same outcome.

Current-law note

The commercial-rent tax discussed in this 2004 ruling is historical. Florida TAA 25A-010 states that section 212.031's tax was repealed effective October 1, 2025, with no state sales tax or discretionary sales surtax on rent or license fees for rental or occupancy periods beginning on or after that date.

The financing-versus-lease analysis can still matter for contracts, accounting, property rights, and taxes outside the repealed general commercial-rent levy, but TAA 04A-025 decided only the Florida sales-tax issue presented.

What this means for you

Acquisition and real-estate finance teams

Substance must be documented across the operating agreement, note, mortgage, lease, guarantees, payment terms, risk allocation, and title-transfer obligation. A label in one document is not enough.

Related companies

Common ownership did not automatically eliminate rent tax under the former rule. The favorable result came from the lender-driven financing purpose and ownership economics, not merely affiliation or disregarded-entity status.

Accountants and tax professionals

Compare “rent” with fair market value and debt service, identify who bears property risks, and determine whether title must transfer. Those facts separated this arrangement from an ordinary related-party lease.

Common questions

Q: Why was the document titled “Lease Agreement” not treated as a lease?
A: The complete transaction showed secured financing in substance, and the lease was required to channel loan payments through a special-purpose titleholder.

Q: Did rent equal the property's market rental value?
A: No. Base rent equaled principal and interest due to the lender.

Q: Who bore the risks normally associated with ownership?
A: The operating business bore most risks involving repairs, insurance, indemnity, casualty, condemnation, and environmental matters.

Q: Was the operating business required to acquire title?
A: Yes. It had to purchase the property at or shortly after the loan ended, subject to earlier casualty or condemnation provisions.

Q: Would any related-party lease with debt-linked rent be exempt?
A: No. The Department analyzed six interlocking factors and the full document set.

Citations and references

• Fla. Stat. § 212.02(2), (10)(i), (12) — business, real-property license, and person definitions
• Fla. Stat. § 212.031(1); Fla. Admin. Code r. 12A-1.070(4), (19) — former commercial-rent tax and related-party rules
• Fla. Stat. § 697.01(1) — instruments intended to secure payment treated as mortgages
• Fla. Stat. § 213.22 — Technical Assistance Advisements
• Section 37, Chapter 2025-208, Laws of Florida — repeal cited by Florida TAA 25A-010

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 04A-025
• Current-law source: TAA 25A-010

Original ruling text

SUMMARY

QUESTION: Whether the distribution and leaseback of the
facilities described is exempt from Florida sales tax as a
financing arrangement/mortgage?

ANSWER - Based on Facts Below: In reviewing all of the
relevant documents related to the transaction, it was
determined that this particular transaction was more akin
to a "financing arrangement" than a "lease" for purposes of
Chapter 212, F.S. The following factors were considered
during our determination: (1) Recognizing the clear and
unambiguous language of the relevant documents while
keeping in mind that substance is always preferred over
form; (2) Recognizing that, for there to be a mortgage,
there must be a debt secured thereby; (3) Examining if
"rent" is fixed to debt service, as opposed to the rental
market value of the property; (4) Determining whether the
buyer/lessee is a single purpose financing corporation
created prior to the transaction in order to facilitate the
loan process; (5) Examining whether the short-term and
long-term risks pass to the "so-called buyer"; and (6)
Recognizing that the proper recording of a "debt" requires
the transfer of title shortly after the end of a "lease"
term. Other factors exist, however, these six (6) were
considered most relevant under the specific facts
presented.

Mar 31, 2004

Re: Technical Assistance Advisement 04A-025
Whether a Transaction Creates a Lease or Financing
Arrangement/Mortgage
Sales and Use Tax
Section 212.031, Florida Statutes ("F.S.")
Rule 12A-1.070, Florida Administrative Code ("F.A.C.")

Dear :

This response is in reply to your letter dated January 16, 2004
(postmarked February 11, 2004), requesting the Department's
issuance of a Technical Assistance Advisement ("TAA") pursuant
to Section 213.22, F.S., and Chapter 12-11, F.A.C., regarding
the Department's position as to whether a transaction involving
commercial real property is a "lease" or a "financing
arrangement/mortgage." An examination of your letter has
established that you have complied with the statutory and
regulatory requirements for issuance of a TAA. Therefore, the
Department is hereby granting your request for issuance of a
TAA.

Provided along with your letter were the following documents:
(a) Articles of Amendment for "Subject"; (b) Articles of
Incorporation for "Parent"; (c) Operating Agreement of
"Applicant," which sets forth the ownership structure of
"Applicant"; (d) Lease Agreement between "Applicant" and
"Subject"; (e) Mortgage document and promissory note; and (f)
Contract/Commitment Letter between "Applicant," "Parent,"
"Subject," and "Lender."

ISSUE

Is the distribution and leaseback of the facilities described
exempt from sales tax as a financing arrangement/mortgage under
Florida Sales tax law?

FACTS

Based on your letter, the following parties can be identified:

"Taxpayer/Subject" is the operating entity that was purchased by
"Parent." "Taxpayer/Subject" occupies the real property in
question and is frequently referred to as the "lessee" within
the various documents.

"Applicant" is the single purpose entity through which the
"Lender" made the loan to "Parent" so that "Parent" could
purchase "Taxpayer/Subject." "Applicant" is the named borrower
on the "Mortgage and Assignment of Rents and Fixture Filing" as

well as the "Promissory Note." "Applicant" is also listed in
the County's Official Records as the owner of the property in
question and is frequently referred to as the "lessor" within
the various documents.

Your letter provides, in part:

Parent owns 100% of the outstanding equity of Subject and
Applicant. Subject and Applicant are both "disregarded
entities" for federal and Florida income tax purposes.

Parent required financing from Lender to undertake the
purchase of real property and all improvements thereon, and
to acquire the Subject's stock. Subject operated an
existing multi-brand retail automobile, parts and service
operation. Immediately following Parent's purchase of
Subject's stock, Parent filed IRS Form 8869, Qualified
Subchapter S Subsidiary Election, which effectively
liquidated Subject for federal and Florida income tax
purposes. Effective August 1, 2003, Parent formed Applicant
as a single-member limited liability company based upon a
condition of the loan of funds which requires title to the
real property to be acquired in a "bankruptcy-remote single
purpose entity." As stated in Section 1.2 of the operating
agreement, the purpose of this single purpose entity is to
engage solely in the following activities:

(a) to acquire those certain parcels of real property,
together with all improvements thereon, located in the
City of.... (hereinafter, the "Property");

(b) to own, hold, sell, assign, transfer, operate, lease,
mortgage to Lender, and otherwise deal with the
Property;

(c) to borrow the necessary amount of funds from Lender to
acquire the Property and to issue notes and other
documents to evidence and secure the borrowing; and

(d) subject to the Separateness Covenants (defined in

Section 5.2), to exercise all powers enumerated in the
Act necessary or convenient to the conduct, promotion
or attainment of the business or purposes otherwise
set forth in the Operating Agreement.

But for Lender's express requirement, Parent would not have
formed Applicant, and Subject would have acquired title to
the Property directly.

Parent capitalized Applicant with a $100 initial capital
contribution. Parent's additional capital contributions
were based solely on the down payment required to acquire
the property. Lender loaned the balance of the Property's
purchase price to Applicant (the "Loan") and secured the
Loan with a mortgage on the Property (the "Mortgage").
Parent and Subject were required to guarantee the
performance of Applicant's obligation under the Loan and
Mortgage.

Concurrent with the execution of the financing arrangement
with the aforementioned parties, Applicant entered into a
lease agreement (the "Lease") with Subject. Applicant, as
Lessor, and Subject, as Lessee, entered into the Lease,
under which Applicant will "lease" the property to be
occupied by Subject. The term of the Lease is coterminous
with the Loan. The Lease provides cross default provisions
with the Loan. The intent of the Lease Agreement is to
provide Subject with the benefits and burdens of owning the
Property and for Subject to provide Applicant with funds
for Applicant to satisfy its obligations to Lender with
respect to the Loan and Mortgage.

TAXPAYER POSITION

Your letter provides, in part:

The statutory definitions for the terms "lease," "let" and
"rental" provide little guidance concerning what
transactions will be deemed to create a lease with respect

to real property. [See] Fla. Stat. s. 212.02(10). The
Department of Revenue has, however, previously considered a
transaction similar to Applicant's transaction described
above. [See] Bridgestone/Firestone, Inc. v. Department of
Revenue, DOAH Case Number 92-2483, 15 FALR 4874 (1993)....

APPLICABLE STATUTES AND RULES

Section 212.02, F.S., provides in part:

(2) "Business" means any activity engaged in by any person,
or caused to be engaged in by him or her, with the object
of private or public gain, benefit, or advantage, either
direct or indirect....

(10)(i) "License," as used in this chapter with reference
to the use of real property, means the granting of a
privilege to use or occupy a building or a parcel of real
property for any purpose.

(12) "Person" includes any individual, firm, copartnership,
joint adventure, association, corporation, estate, trust,
business trust, receiver, syndicate, or other group or
combination acting as a unit and also includes any
political subdivision, municipality, state agency, bureau,
or department and includes the plural as well as the
singular number.

Section 212.031(1)(a), F.S., provides in part:

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....

Section 212.031(1)(c), F.S., provides in part:

For the exercise of such privilege, a tax is levied in an

amount equal to 6 percent of and on the total rent or
license fee charged for such real property....

Section 212.031(1)(d), F.S., provides:

When the rental or license fee of any such real property is
paid by way of property, goods, wares, merchandise,
services, or other thing of value, the tax shall be at the
rate of 6 percent of the value of the property, goods,
wares, merchandise, services, or other thing of value.

Section 697.01(1), F.S., provides:

All conveyances, obligations conditioned or defeasible,
bills of sale or other instruments of writing conveying or
selling property, either real or personal, for the purpose
or with the intention of securing the payment of money,
whether such instrument be from the debtor to the creditor
or from the debtor to some third person in trust for the
creditor, shall be deemed and held mortgages, and shall be
subject to the same rules of foreclosure and to the same
regulations, restraints and forms as are prescribed in
relation to mortgages.

Section 12A-1.070, F.A.C., provides in part:

(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 at the rate of 5 percent prior to
February 1, 1988, and 6 percent on or after February 1,
1988, 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.

(c) Ad valorem taxes paid by the tenant or other person
actually occupying, using, or entitled to use any real
property to the lessor or any other person on behalf of the
lessor, including transactions between affiliated entities,
are taxable.

(d) Common area maintenance charges paid by a tenant to the
lessor for the privilege or right to use or occupy real
property are taxable.

(e) Utility charges paid by a tenant to the lessor for the
privilege or right to use or occupy real property are
taxable, unless the lessor has paid the sales tax to the
utility company on such utilities consumed by the tenant,
and the utilities billed by the lessor to the tenant are
separately stated on the lessor's invoice to the tenant at
the same or lower price as that billed by the utility
company to the lessor.

(19)(a) The lease or rental of real property or a license
fee arrangement to use or occupy real property between
related "persons," as defined in s. 212.02(12), F.S., in
the capacity of lessor/lessee, is subject to tax.

(b) The total consideration, whether direct or indirect,
payments or credits, or other consideration in kind,
furnished by the lessee to the lessor is subject to tax
despite any relationship between the lessor and the lessee.

(c) The total consideration furnished by the lessee to a
related lessor for the occupation of real property or the
use or entitlement to the use of real property owned by the
related lessor is subject to tax, even though the amount of
the consideration is equal to the amount of the
consideration legally necessary to amortize a debt owned by
the related lessor and secured by the real property
occupied, or used, and even though the consideration is
ultimately used to pay that debt.

DISCUSSION

The issue presented requires us to make a determination as to
whether the transaction involving Applicant and Subject is a
"financing arrangement/mortgage" or a "lease." The distinction
between the two is significant for Florida sales tax purposes.
In Florida, the renting of commercial real property is a taxable
privilege. See Section 212.031, F.S. While some transactions
may be governed by a document entitled "Lease," the true
character of the transaction may be more akin to a "financing
arrangement" or "mortgage," and in such event, the transaction
would not be subject to Florida sales tax under Chapter 212,
F.S. See Bridgestone/Firestone, Inc. v. Department of Revenue,
DOAH Case 92-2483, 15 FALR 4874 (1993).

Various factors have been identified in addressing this issue.
The clear and unambiguous language of the relevant documents
will be respected (See Emergency Associates of Tampa, P.A. v.
Sassano, 664 So.2d 1000 (Fla. 2d DCA, 1995)), keeping in mind
that substance is always preferred over form (See Markell, et
al. v. Hilbert et al., 140 Fla. 842, 192 So. 392 (Fla. 1939)).
For there to be a mortgage, there must be a debt secured
thereby. See Bank of Miami Beach v. Fidelity and Casualty
Company of New York, 239 So.2d 97 (Fla. 1970). A financing
arrangement may be found where the "rent" is fixed to debt
service as opposed to the rental market value of the property.
See Sun Oil Company v. Commissioner of Internal Revenue, 562
F.2d 258 (3rd Cir. 1977). Where the buyer/lessee is a single
purpose financing corporation, a financing arrangement may be
found. See Bridgestone/Firestone. A review as to whether the
short-term and long-term risks pass to the "so-called buyer" is
relevant to our analysis. See Bridgestone/Firestone. Finally,
the proper recording of a "debt" requires the transfer of title
shortly after the end of a lease term. See
Bridgestone/Firestone.

1. The plainly and clearly articulated intent of the parties.

A review of the "Lease Agreement" provides the following
provisions:

***
WHEREAS, pursuant to the Loan Agreement, Lessee was
required to acquire title to the Premises in a bankruptcyremote, special purpose entity (the "SPE Requirement").

WHEREAS, Lessor was formed solely for the purpose of
satisfying the SPE Requirement.

WHEREAS, Lessor is not in the business of engaging the
conveyance of the lease or the grant of a license to use
real property, rather Lessor was created to serve as an
integral part of the Loan transaction.

WHEREAS, the parties to this Lease intend that this Lease
shall be treated as a financing arrangement, rather than a
lease or rental agreement.

The clear and unambiguous language of the "Lease Agreement" must
be given its plain and ordinary meaning. See Emergency
Associates of Tampa, P.A. v. Sassano, 664 So.2d, 1000 (Fla. 2d
DCA, 1995). It would appear that the parties intended this
transaction to be a financing arrangement rather than a lease or
rental arrangement. Because substance must triumph over form,
our analysis must go beyond the words of the "Lease Agreement"
in determining the true intent of the parties.

2. The existence of a debt or other obligation.

"It is well settled in this and other jurisdictions that there
can be no mortgage unless there is a debt to be secured thereby
or some obligation to pay money." Bank of Miami Beach v.
Fidelity and Casualty Company of New York, 239 So.2d 97, 99
(Fla. 1970), quoting Nelson v. Stockton Mortgage Co., 1930, 100
Fla. 1191, 130 So. 764. The Florida Supreme Court continued its
analysis by citing to Holmberg v. Hardee, 90 Fla. 787, 108 So.
211 (1926):

In Holmberg this court pointed out that a deed absolute in
form cannot be held to be a mortgage without proof of an

obligation to be secured by it, "either in the form of an
antecedent debt between the parties, or a loan, debt, or
assumption of liability." (emphasis added). [emphasis in
original opinion]

A review of all of the documents provided demonstrates that the
intent of the parties was to secure financing and that the
"Lease Agreement" was a requirement of the Lender. Further, a
debt does exist as evidenced by the Applicant being the named
"Borrower" on the mortgage provided.

3. Nature of the "Basic Rent".

In determining that a transaction involved a financing agreement
and not a lease, it has been noted that the lessee pays monies
the sum of which is directly related to the loan amount rather
than a sum that is representative of fair market rent. In
Bridgestone/Firestone's analysis of Sun Oil Company v.
Commissioner of Internal Revenue (562 F.2d 258 (3rd Cir. 1977)),
a financing agreement was found wherein:

[T]he rents (had) no visible connection with the economic
value of the property but (were) evidently related to a
fixed interest return on the advances.
Bridgestone/Firestone at 4889, para. 38.

According to the Lease Agreement, the "Base Rent" is an amount
equal to the principle and interest payable to Lender, paid
directly to the Lender and "... shall be paid absolutely net to
Lender, so that this Lease shall yield to Lender the full amount
thereof, without setoff, deduction or reduction." Lease
Agreement at Section 3(a). The Subject /lessee is also required
to pay all expenses and taxes related to the property as
"additional rent." Lease Agreement at Section 4.

At this point, we note that Rule 12A-1.070(19)(c), F.A.C.,
provides that mortgage payments made by a lessee on behalf of a
related party lessor are subject to Florida sales tax because
the payments are viewed as "consideration" for the right to use
or occupy commercial real property. Additionally, Rule 12A1.070(4)(c), (d) and (e), F.A.C., provide that ad valorem taxes,

common area maintenance fees and utility bills paid by a lessee
for the benefit of the lessor are also subject to Florida sales
tax.

4. The purpose of "Applicant".

In determining the practical business substance of the
transaction, it is also necessary to determine if the buyer
is a single purpose financing corporation....
Bridgestone/Firestone, at 4884, para. 27

In the Bridgestone/Firestone case, "FIRELCO" was formed
especially to aid Firestone in its goal of "off-balance sheet
financing." Bridgestone/Firestone, at 4880, para. 8. The Hearing
Officer found that FIRELCO was indeed a single-purpose financing
corporation. Id., at 4884, para. 28.

As described in the "Operating Agreement" between Parent and
Applicant, Applicant was formed as a "single purpose entity" for
the limited business purposes described above in the "Facts"
section of this response. Further, the Contract/Commitment
Letter between the Lender and the parties describes Applicant as
a "bankruptcy-remote, special purpose entity."

The formation of a "bankruptcy-remote, special purpose entity"
is part of an "... asset-securitization strategy that puts
ownership of the company's valuable assets in an entity separate
from the one that is at risk for liability." Lynn M. LoPucki,
The Death of Liability, 106 Yale L.J. 1, 24 (October, 1996).
Explained further:

To achieve bankruptcy remoteness, the SPV's [Special
Purpose Vehicle] organizational structure strictly limits
its permitted business activities. The goal is to prevent
creditors (other than holder of the SPV's securities) from
having claims against the SPV that would enable them to
file an involuntary bankruptcy petition against the SPV.
... Steven L. Schwarcz, The Alchemy of Asset
Securitization, 1 Stan. J.L. Bus & Fin. 133, 135 -136
(Fall, 1994).

We can see, then, that the sole business purpose of Applicant is
to be a single purpose entity with "bankruptcy remoteness."
Under the Operating Agreement, Applicant has strictly limited
permitted business activities. Under financial and lending
concerns more fully articulated in the above cited articles,
"asset securitization" through the creation of entities such as
Applicant is "... by far the most rapidly growing segment of the
U.S. credit markets." LoPucki, at 24.

5. Short Term and Long Term Risks and Benefits.

In determining the practical business substance of the
transaction, it is also necessary to determine ... if the
short-term and long-term risks and benefits associated with
ownership pass to the so-called buyer....
Bridgestone/Firestone, at 4884, para. 27

Under the terms of the Lease, the Subject/lessee assumes most,
if not all, of the short term and long term risks and benefits.
This would indicate that Subject is the true owner of the
property and that the Applicant/lessor is the single purpose
entity established for lending purposes.

The short and long term risks that fall on the Subject/lessee
can be found in Sections 7 ("Alterations, Improvements and
Repairs"), 8 ("Insurance"), 10 ("Indemnity"), 11 ("Casualty and
Condemnation") and 12 ("Environmental Matters"). These short
and long term risks that fall on the lessee would be more
traditionally be the responsibility of a lessor/owner.

6. Recording as "debt" and transfer of title.

The Hearing Officer in Bridgestone/Firestone considered the
standards issued by the Financial Accounting Standards Board
("FASB"). For a "lease" to be reported as a "debt," FASB
Statement No. 13 requires that "the lease transfers ownership of
the property to the lessee." Bridgestone/Firestone, at 4882,
para. 16. FASB 13 has been superseded, in part, by FASB
Statement No. 98, which provides in part:

A lease involving real estate may not be classified as a

sales-type lease unless the lease agreement provides for
the transfer of title to the lessee at or shortly after the
end of the lease term.... FAS 98 Summary.

Section 18 of the "Lease Agreement" provides that Subject/lessee
"shall purchase" and Applicant/lessor "shall sell" the property
on the earlier of: (1) the "expiration date" (defined in the
Lease as thirty days following the termination of the Loan
term); or (2) on the date of condemnation or if the property
cannot be reasonably replaced or repaired following fire or
other casualty (see Section 11(e) of the Lease).

CONCLUSION

Based on all the documents provided, the "Lease Agreement"
between Applicant and Subject is part of a "financing
arrangement/mortgage," rather than a lease. Florida sales tax,
under Section 212.031, F.S., would not be due on this
transaction. This conclusion is based on the following factors.

1. The Lease Agreement plainly and clearly articulates
   the intent of the parties. This language is supported
   by the other documents provided.

2. This transaction, at its center, is all about securing
   a loan. The documents provided demonstrate the intent
   of the parties in securing a loan, rather than
   creating a "leasing" situation. The "Lease Agreement"
   was a vehicle deemed necessary in securing the loan.

3. Basic Rent is directly tied to servicing the debt
   obligation rather than to a fair market value rent.
   Standing alone, these payments would be subject to
   Florida sales tax under Rule 12A-1.070(19), F.A.C.
   However, in the context of the other facts presented,
   this factor contributes to the determination that the
   transaction is a non-taxable financing
   arrangement/mortgage.

4. The Applicant is a sole purpose financing entity
   created specifically to facilitate Subject's loan

application. Significantly, the creation of Applicant
was prior to the parties structuring this transaction
and not afterwards. Finally, the Applicant is strictly
limited to those business activities detailed in the
Operating Agreement.

5. The Short Term and Long Term Risks and Benefits fall
   to Subject/lessee, which would indicate ownership.

6. Thirty days subsequent to the loan terminating, title
   to the property will be sold to Subject, thereby
   satisfying the requirement of FASB 98 as it relates to
   the recordation of "debt."

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 s. 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,

Eric R. Peate
Senior Attorney

Technical Assistance and Dispute Resolution
(850) 922-4714

ERP/
Ctrl # 58823