Which electricity meters at a Florida RV park qualified for the residential household sales-tax exemption?

Plain-English summary

Florida found that 14 of the RV park's 18 electricity meters qualified for the residential household exemption. Meters 1 and 6 through 18 served RV sites, cabins, bathhouses, laundry, lighting, and other common areas limited to registered tenants and guests. Meters 2 through 5 included office, store, storage, garage, pole-barn, propane, or other nonresidential uses, making each entire metered sale taxable.

The park had 226 RV sites, three cabins, laundry facilities, three bathhouses, recreation halls, and a pool. Guests stayed overnight, for six months or less, or longer than six months. Access was restricted to registered tenants and their guests, and use of common areas carried no separate charge.

Length of stay did not control residential status

Section 212.08(7)(j) exempted utilities sold to residential households for residential purposes. The Department focused on how the occupant used the property, not the type of business or length of stay.

An occupant could make an RV site, marina slip, apartment, cottage, room, house, or condominium a temporary or permanent residence. One night versus one year did not determine the exemption.

Common areas could qualify

Electricity used in residential common elements—such as pools, clubhouses, sidewalks, playgrounds, and similar facilities—could be exempt when access was limited to owners, tenants, and guests and no nonresidential use occurred.

The rule operated meter by meter. If any electricity flowing through one meter served a nonexempt purpose, the entire sale for that meter was taxable. Separate meters therefore mattered.

Documentation and refunds

The utility had been collecting state sales tax and local discretionary surtax on all 18 meters. Rule 12A-1.053 allowed the utility to stop collecting when it had a good-faith written representation that specified accounts purchased electricity solely for residential household use, even if the utility internally coded the customer as commercial.

The Department could not compel the utility to refund the customer directly. A refund for prior periods required the utility first to refund the tax and then claim from the Department within the allowed period, or the customer could obtain an assignment of refund rights from the utility.

What this means for you

RV parks and campgrounds

Residential exemption can apply to short- and long-term sites, cabins, and resident-only common areas. Map every meter to its actual loads and separate offices, stores, storage, and other commercial uses.

Utility companies

A residential schedule or good-faith customer document can support stopping collection. Mixed-use records can shift liability back to the customer or utility depending on compliance with the rule.

Accountants and property managers

Keep meter maps, account lists, facility descriptions, access rules, and written residential-use certifications. A single commercial circuit can disqualify all electricity on that meter.

Common questions

Q: Which meters were exempt?
A: Meters 1 and 6 through 18.

Q: Which meters were taxable?
A: Meters 2 through 5 because they included nonresidential uses.

Q: Did overnight stays qualify as residential?
A: Yes. The Department said no minimum stay applied if the occupant used the site as a temporary or permanent residence.

Q: Were resident common areas exempt?
A: Yes when their use was residential and access was restricted to tenants, owners, and guests.

Q: Could one commercial use taint a whole meter?
A: Yes. Any nonexempt use made the entire metered electricity sale taxable.

Citations and references

• Fla. Stat. § 212.05(1)(e)1.c. — tax on electrical power or energy
• Fla. Stat. § 212.08(7)(j) — residential household utility exemption and mixed-use rule
• Fla. Admin. Code r. 12A-1.053(1) — residential electricity, customer representations, and utility reliance
• Fla. Admin. Code r. 12A-1.014 — refund process for erroneously collected tax
• Fla. Stat. § 215.26 — refund authority and time limits referenced in the ruling

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 04A-050

Original ruling text

SUMMARY
QUESTION 1: Whether charges related to 18 electrical power meters at the recreational vehicle park operated by the
Taxpayer qualify for the residential exemption from tax pursuant to Section 212.08(7)(j), F.S., and Rule 12A1.053(1)(a), F.A.C.
ANSWER 1 - Based on Facts Below: With the exception of 4 meters that the Taxpayer specifically agreed did not
qualify for the exemption, the charges related to the electrical meters qualify for the exemption from tax provided by
Section 212.08(7)(j), F.S. The 4 non-qualifying meters fail to qualify because of non-exempt commercial use
associated with those meters.
Section 212.08(7)(j), F.S., requires that:
(1) the sale must be to residential households; and
(2) the utilities must be used exclusively for residential purposes - any non-exempt use subjects the entire sale to tax.
The focus of the exemption is upon the use made of the property by the occupant, who must use the household
exclusively for residential purposes. "Residential," for the purpose of Section 212.08(7)(j), F.S., means that the
occupant must make the household his or her residence, either temporarily or permanently.
There is no requirement regarding the length of time an occupant must reside for the exemption to apply. In addition,
there is no requirement as to the type of business to which the "residential household" relates or the type of household
involved (i.e., RV parks, marinas, apartment buildings, cottages, houses, condominiums, and similar facilities are
treated equally). To the extent that the use of the common elements is limited to residential use and access to the
common areas is restricted to the owners, tenants, and guests, the electricity provided to the common elements
qualify for the exemption. Any non-residential use of electricity in the common elements disqualifies the sale from
exemption. See Rule 12A-1.053(1)(a), F.A.C.
The Taxpayer's RV sites, cabins, and common elements clearly qualify for exemption as residential pursuant to
Section 212.08(7)(j), F.S. The Taxpayer correctly pointed out that meters 2 through 5 involved non-residential
(commercial) use and, therefore, the charges associated with these four meters are subject to tax under Chapter 212,
F.S. The information provided by the Taxpayer indicated that meters 1 and 6 through 18 involve only residential use
and meet the requirements for exemption under Section 212.08(7)(j), F.S.

August 19, 2004

Re: Technical Assistance Advisement 04A-050
Sales Tax
Residential Electricity Exemption
Section 212.05, Florida Statutes (F.S.).

Section 212.08, F.S.
Rule 12A-1.014, Florida Administrative Code (F.A.C.).
Rule 12A-1.053, F.A.C.
XXX ("Taxpayer")
Taxpayer Identification Number: XX
Dear:
This is a response to your letter of May 26, 2004, requesting a Technical Assistance Advisement (TAA) regarding the
above-referenced matter. This response to your request constitutes a TAA under Chapter 12-11, Florida
Administrative Code (F.A.C.), and is issued to you under the authority of Section 213.22, Florida Statutes (F.S.).
Facts
Taxpayer is a XXX Limited Partnership that operates a recreational vehicle (RV) park in Florida. The park contains
226 RV sites and three cabins, and offers laundry facilities, three bath houses, recreation halls and a swimming pool.
Access to the Taxpayer's park is limited to registered tenants of the park and their guests. The duration of tenants'
stay varies, including overnight, short term for six months or less, and long term periods greater than six months.
The park has 18 electrical power meters on the property, and currently the Taxpayer's provider is charging Florida
sales tax and local discretionary surtax with regard to each meter. A copy of the Taxpayer's electricity bill for the
period 01/27/03 through 02/24/03 was included with your request, notated to indicate what areas of the park each
meter services. In addition, you provided a spreadsheet showing each meter, account number, tax collected, and
areas served. A map of the park and the areas covered by each meter was also included.
You note that in addition to the above mentioned common areas, the park also includes a park office and two small
stores. You state that the Taxpayer understands that these three areas constitute commercial use of electricity and
that the Taxpayer stipulates that the electricity flowing through the meters serving these areas is properly subject to
tax.
There is no charge for use of the common areas granted to each guest.
The description of the areas serviced by each meter is as follows:

Meter#Description
1.Bath House #2, Laundromat, Campsites 412-414
2.Old Laundromat, Vacant Space
3.Activity Center (incl. Office and Store), Cabins 2 and 3
4.Vacant Space, Storage
5.Store, Office, Garage, Pole Barn, Propane,
Campsites 301-303
6.Bath House #1, Campsites 304, 305, 501-513

7.Campsites 306-316, 405-411
8.Campsites 317-322, 415-422
9.Cabin #1, Campsites 111-118, 211-219
10.Campsites 700-708
11.Campsites 101-110, 201-210
12.Campsites 810-818, 551-556
13.Bath House #3, Campsites 600a-614
14.Campsites 800-809, 615, 616,
Bettie's Beach House (no store or office)
15.Lighting
16.Campsites 532-550
17.Campsites 732-743, 727, 744-753
18.Campsites 709a-726

Requested Advisement
Whether charges related to certain meters on Taxpayer’s property qualify for the residential exemption from tax
pursuant to Section 212.08(7)(j), F.S., and Rule 12A-1.053(1)(a), F.A.C.
Taxpayer's Position
The Taxpayer's position is that charges related to meters that serve only RV spaces, campsites, and cabins qualify for
the exemption. In addition, the charges related to meters serving common areas also qualify for the exemption,
provided that the meters in questions serve no commercial use. The Taxpayer's analysis of the taxability of charges
related to each meter is as follows:

1. All of the meters presented with the exception of the 2nd, 3rd, 4th and 5th meters qualify for the exemption. This is
   because these particular meters serve only RV spaces, campsites, laundromats, cabins, lighting, and bathhouses and
   common areas, no "commercial" applications whatsoever;
2. The 2nd, 3rd, 4th and 5th meters fail to qualify for the exemptions because there is commingling of residential and
   "commercial" uses on these meters which renders all of the electricity flowing through the meters taxable. Such
   commercial uses include office space & storage space;
3. All meters serving common areas with the exception of meter #3 qualify for the exemption since access to the park
   is limited solely to registered tenants and their guests.
   The Taxpayer cites in support of its position TAA 00(A)-073, TAA 01A-001, TAA 03A-053, and TAA 03A-019.
   Applicable Authority
   Section 212.05(1)(e)1.c., F.S., imposes a sales tax on charges for electrical power or energy at the rate of 7 percent.

Section 212.08(7)(j), F.S., provides in pertinent part:
Household fuels.--Also exempt from payment of the tax imposed by this chapter are sales of utilities to residential
households or owners of residential models in this state by utility companies who pay the gross receipts tax imposed
under s. 203.01, and sales of fuel to residential households or owners of residential models, including oil, kerosene,
liquefied petroleum gas, coal, wood, and other fuel products used in the household or residential model for the
purposes of heating, cooking, lighting, and refrigeration, regardless of whether such sales of utilities and fuels are
separately metered and billed direct to the residents or are metered and billed to the landlord. If any part of the utility
or fuel is used for a nonexempt purpose, the entire sale is taxable. The landlord shall provide a separate meter for
nonexempt utility or fuel consumption.... (emphasis supplied)
Rule 12A-1.053(1), F.A.C., provides:
(a) The sale of electric power or energy by an electric utility is taxable. The sale of electric power or energy for use in
residential households, to owners of residential models, or to licensed family day care homes by utilities who are
required to pay the gross receipts tax imposed by Chapter 203, F.S., is exempt. Also exempt is electric power or
energy sold by such utilities and used in the common areas of apartment houses, cooperatives, and condominiums, in
residential facilities enumerated in Chapter 400, F.S., and in other residential facilities. However, if any part of the
electric power or energy is used for a non-exempt purpose, the entire sale is subject to tax.
(b) An electric utility is not obligated to collect and remit tax on any sale of electric power or energy when:

1. The electric power or energy is sold at a rate based on the utility's "residential schedule," under tariffs filed by the
   utility with the Public Service Commission; or
2. The utility has on file a writing or document evidencing a representation of the utility's customer that the electric
   power or energy is being purchased for residential household use, including licensed family day care homes and other
   facilities identified in paragraph (a). The writing or document may be a customer application or a certificate that
   identifies the customer as purchasing the electric power or energy for a residential purpose. A "customer application"
   includes a record of information obtained electronically or orally from the customer in the ordinary course of business.
   The electric utility must have acted in good faith in accepting the representation of the customer.
   (c) Tax is due on electric power or energy purchased by a customer tax exempt for the claimed purposes of residential
   household use that does not qualify for such exemption. In such instances, if the electric utility complies with the
   requirements of paragraph (b), the Department will look to the customer for any applicable tax, penalty, or interest
   due. The Department will look to the utility for any applicable tax, penalty, or interest due when the electric utility's
   books and records indicate a failure to comply with the requirements of paragraph (b).
   Rule 12A-1.014, F.A.C., provides in pertinent part:
   (1) When a dealer refunds the sales, lease, or rental price of admissions, tangible personal property, transient rentals,
   real property, or services upon which tax has been paid by the purchaser or lessee to the dealer and remitted by the

dealer to the state, the dealer shall also refund the tax paid by the purchaser. If, in lieu of a refund of the sale price,
the dealer credits such amount on the purchaser's account, a corresponding credit for sales tax previously paid by the
customer shall be made.

(3) Whenever a dealer credits a customer with tax on returned merchandise or for tax erroneously collected, the
dealer must refund such tax to the customer before the dealer's claim to the State for credit or refund will be approved.
(4) A taxpayer who has overpaid tax to a dealer, or who has paid tax to a dealer when no tax is due, must secure a
refund of the tax from the dealer and not from the Department of Revenue.
(5)(a) Any dealer entitled to a refund of tax paid to the Department of Revenue may seek a refund by filing an
Application for Refund-Sales and Use Tax (Form DR-26S, incorporated by reference in Rule 12-26.008, F.A.C.) with
the Department. Form DR-26S, must meet the requirements of s. 213.255(2) and (3), F.S., and Rule 12-26.003,
F.A.C.

1. Form DR-26S, Application for Refund-Sales and Use Tax, must be filed with the Department for tax paid on or after
   October 1, 1994, and prior to July 1, 1999, within 5 years after the date the tax was paid.
2. Form DR-26S, Application for Refund-Sales and Use Tax, must be filed with the Department for tax paid on or after
   July 1, 1999, within 3 years after the date the tax was paid.
   (b) In lieu of a refund to which the dealer is entitled, the dealer may take a credit on the dealer’s sales and use tax
   return within 3 years after the date the tax was paid in accordance with the timing provisions of s. 215.26(2), F.S.
   (6) Any dealer who takes a credit, or applies for a refund, for tax paid to the state is required to keep and preserve all
   information and documentation necessary to substantiate the dealer's entitlement to a refund or credit of tax paid until
   tax imposed under Chapter 212, F.S., may no longer be determined and assessed under s. 95.091, F.S.
   Analysis and Discussion
   Section 212.08(7)(j), F.S., provides an exemption for the sale of utilities (Footnote #1) to "residential households"
   used for residential purposes. This paragraph also provides that if any part of the utility is used for a nonexempt
   purpose, the entire sale is taxable. Thus, the statute contains two requirements for exemption:
   (1) the sale must be to residential households; and
   (2) the utilities must be used exclusively for residential purposes - any non-exempt use subjects the entire sale to tax.
   The focus of the exemption is upon the use made of the property by the occupant, regardless of who is billed for the
   sale. The occupant must use the household exclusively for residential purposes. "Residential," for the purpose of
   Section 212.08(7)(j), F.S., means that the occupant must make the household his or her residence, either temporarily
   or permanently.

Section 212.08(7)(j), F.S., imposes no requirement regarding the length of time an occupant must reside for the
exemption to apply. Whether occupants stay one night or one year is of no consequence. In addition, there is no
requirement as to the type of business to which the "residential household" relates (i.e., RV parks, marinas, apartment
buildings, and similar facilities are treated equally). Similarly, there is no requirement as to the type of "residential
household" eligible for exemption. Whether the household consists of an apartment, cottage, room, house,
condominium unit, marina slip, or RV site is immaterial.
Residential cooperatives, condominiums, timeshares, mobile home parks, RV parks, and similar multi-unit complexes
contain common elements that are available for use to all residents. Pool areas, club houses, benches, sidewalks,
playgrounds, tennis courts, and similar recreational facilities are often provided without charge for the use by all
residents of the complex or park. Although these common elements are not contiguous to each residential unit or
space, they are provided as an extension to each residential unit or space. To the extent that the use of the common
elements is limited to residential use and access to the common areas is restricted to the owners, tenants, and
guests, the electricity provided to the common elements would qualify for the exemption. Any non-residential use of
electricity in the common elements would disqualify the sale from exemption. See Rule 12A-1.053(1)(a), F.A.C.
If there is one meter for multiple "residential households" and, accordingly, only one charge for electricity, it is that
charge or "sale" that must qualify under the statute. Although the sale can be to the landlord of residential households,
if any part of the use is non-residential, the entire sale is taxable. Thus, if the landlord uses part of the electricity from
a meter for its own purposes, which are not exclusively residential, the entire sale with regard to that meter is taxable.
Similarly, where multiple occupants receive electricity flowing from the same meter, if one occupant is making a nonresidential use, the entire sale related to such meter is taxable. Where more than one meter serves an entire
residential facility, the use related to each meter must be individually analyzed to determine whether the exemption
applies.
The Taxpayer's RV sites, cabins, and common elements clearly qualify for exemption as residential pursuant to
Section 212.08(7)(j), F.S. As stated above, any non-exempt use will cause the entire sale to be taxable. As you
correctly point out in your request, meters 2 through 5 involve non-residential use and, therefore, the charges
associated with these four meters are subject to tax under Chapter 212, F.S. However, the information provided with
your request indicates that meters 1 and 6 through 18 involve only residential use and meet the requirements for
exemption under Section 212.08(7)(j), F.S.
You have indicated that Taxpayer's provider is currently charging Florida sales tax and local discretionary surtax with
regard to each meter. The Department is without statutory authority to compel a utility company to grant a refund to a
customer. See Section 215.26, F.S., and Rule 12A-1.014(4), F.A.C. However, Rule 12A-1.053(1)(b), F.A.C., provides:
An electric utility is not obligated to collect and remit tax on any sale of electric power or energy when:

1. The electric power or energy is sold at a rate based on the utility's "residential schedule," under tariffs filed by the
   utility with the Public Service Commission; or
2. The utility has on file a writing or document evidencing a representation of the utility's customer that the electric

power or energy is being purchased for residential household use.... (emphasis supplied)
Therefore, when a utility provider accepts in good faith a document or writing that satisfies the requirements of Rule
12A-1.053(1)(b)2., F.A.C., stating that the power purchased is being used solely for residential purposes, even though
the account may be coded "commercial" consistent with its billing policies and procedures, the utility provider may
discontinue collecting and remitting sales tax on the accounts following the receipt of that document. Taxpayer should
file with its utility provider a document or writing pursuant to Rule 12A-1.053(1)(b)2., F.A.C., with reference to the
charges relating to meters 1 and 6 through 18, if it has not already done so. Once the Taxpayer has filed the required
document evidencing that the electricity is being purchased for residential household use, it would meet the second
criterion of Rule 12A-1.053, F.A.C., and the utility would not be required to collect tax on those accounts following the
receipt of that document.
If the Taxpayer's utility provider does apply for a refund from the Department of Revenue, the refund claim may
include periods prior to the Taxpayer’s filing of a document or writing complying with Rule 12A-1.053(1)(b)2., F.A.C.,
provided that: (1) the electricity purchased during such periods was for residential household use; and (2) application
for a refund is made within the period allowed under Section 215.26(2), F.S. Please note that the utility provider’s
claim for a refund will only be approved by the Department if the utility provider first refunds the tax to the Taxpayer.
An alternative to this refund procedure would be for the Taxpayer to secure its refund of the tax paid through an
assignment of rights direct from utility. We have provided a form you may use for this purpose.
Concluding Statement
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 15 days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may contact me directly at
(850) 922-4710.
Sincerely,
Thomas K. Butscher
Senior Attorney

Technical Assistance & Dispute Resolution
TKB\
Control # 60398
Enclosure: Assignment of Rights to Refund of Sales Tax

FOOTNOTE #1 - By a utility company that pays the gross receipts tax imposed pursuant to Section 203.01, F.S.