Were toll-booth advertising rights and Road Ranger vehicle sponsorships subject to Florida sales tax?

Plain-English summary

An agency contracted with Florida's transportation department for advertising at turnpike toll plazas and sponsorship identification on Road Ranger vehicles.

Florida taxed the toll-plaza payments as a license to use real property. The agency had a contractual right to enter the toll-booth area and post, replace, and maintain its advertising displays, even though access was restricted by operating guidelines.

Road Ranger sponsorship fees were exempt. Florida analogized the vehicle advertising space to the rule exempting advertising charges by buses, taxicabs, and similar vehicles.

What this means for you

Advertising tax treatment can turn on the physical medium and access rights. A right to enter and use a fixed property area differs from buying advertising space on a vehicle.

Common questions

Why was toll-booth advertising taxable? The agency received access and use rights sufficient to create a real-property license.

Did restricted access prevent taxation? No. The ruling required a granted use, not unrestricted control.

Why were vehicle sponsorship fees exempt? The cited rule exempted advertising-space charges by buses, taxicabs, and similar vehicles.

Citations and references

• Fla. Stat. §§ 212.02(10)(i) and 212.031(1)(a) (real-property licenses)
• Fla. Stat. § 212.05(1)(d) (tangible-personal-property leases)
• Fla. Admin. Code rr. 12A-1.070 and 12A-1.071(42) (real-property licenses and vehicle advertising)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 05A-050

Original ruling text

SUMMARY
QUESTION: Is an agency's agreement with the State of Florida Department of Transportation for toll plaza advertising
and Road Ranger sponsorship subject to Florida's sales and use tax?
ANSWER - Based on Facts Below: Section 212.02(10)(i), F.S., provides only that use of the property must be
granted, and acting within the guidelines provided by the License Agreement, the Agency may make use of the
property in conducting its intended business. Accordingly, the payments made for the placement of advertising
materials on the toll booth structures are taxable payments made in exchange for a license to use real property.
Charges made by buses, taxicabs, and similar vehicles for advertising space are exempt from sales tax. Therefore,
payments made for the placement of advertising materials on Road Ranger vehicles would not be taxable payments.

December 7, 2005

Re: Technical Assistance Advisement 05A-050
Sales and Use Tax
Advertising - Florida Turnpike
Section 212.031(1)(a), F.S.
Sections 212.02(10), (12) and 212.05(1)(d), F.S.
Rules 12A-1.070 and 12A-1.071(1)(a), (42), F.A.C.
XXX ("Agency") ("Petitioner")
EIN: XXX
State of Florida Department of Transportation ("Department")
Dear:
This is a response to your letter dated August 1, 2005, requesting the issuance of a Technical Assistance Advisement
(TAA) concerning the above referenced party and matter. Your letter and supporting documents have been carefully
examined, and the Department finds your request 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, Florida Statutes.
Issue
Is Agency's agreement with the State of Florida Department of Transportation for toll plaza advertising and XXX
sponsorship subject to Florida's sales and use tax?
Facts

Your letter provides the following facts:
[Agency] has entered into an agreement with [Department] for toll Plaza advertising and XXX sponsorship [License
Agreement provided]. Florida's Turnpike Enterprise is a subordinate unit of [Department]. The agreement contains the
following provisions:

1. Florida's Turnpike Enterprise has specific authority to construct, operate, and maintain the Turnpike System of toll
   roads;
2. Tolls are collected at toll plazas located within the travel lanes of the Turnpike System;
3. Florida's Turnpike XXX provides assistance to motorists and disabled vehicles on Florida's Turnpike and the
   Sawgrass Expressway eight (8) hours a day (split between two peak travel periods), 365 days a year from 6:00 a.m.
   to 10:00 a.m. and 4:00 p.m. to 8:00 p.m. (extra hours are assigned during holidays and special events, as applicable);
4. Florida's Turnpike Enterprise has the statutory authority under s. 338.22, Florida Statutes through s. 338.241,
   Florida Statutes, to enter into contracts or licenses with any person for the sale of business opportunities to provide
   additional revenue to the Turnpike System;
5. Florida's Turnpike Enterprise has determined that the placement of commercial advertisements, sponsorships, and
   related revenue opportunities at the toll plazas and for the Florida's Turnpike Road XXX which involves only the
   commercial interests of potential advertisers, sponsors, and their audiences, is a commercial venture that it wishes to
   pursue in its proprietary capacity in order to increase its revenues;
6. [Agency] is in the business of selling and placing advertisements, and securing sponsorships;
7. It is the intent of [Agency] and Florida's Turnpike Enterprise that [Agency] maximize Florida's Turnpike Enterprise
   profits while maintaining the dignity and integrity of Florida's Turnpike Enterprise and the State of Florida;
8. [Agency] recognizes that the toll plazas and Florida's Turnpike XXX vehicles upon which the advertisements or the
   sponsor's name and logo will be placed are not public places with unrestricted access, but are restricted areas which
   will require specific permission to enter;
9. Florida's Turnpike Enterprise will allow [Agency] permission to enter the toll plazas and use Florida's Turnpike XXX
   vehicles to place advertisements or secure sponsors.
   Your letter also states in pertinent part:
   Furthermore, although not specifically addressed in the foregoing described agreement, [Agency] operates under the
   following additional restrictions: 1) It must obtain permission from the Deputy Director - Revenue Collection Services,
   Florida's Turnpike Enterprise each time its employees or agents need to access a tollbooth or toll facility to examine,
   measure, modify, inspect or photograph the signage; 2) the Florida Turnpike facility manager must accompany
   [Agency's] employees or agents each time they require access to a toll booth or toll facility; and 3) all employees or

agents used by [Agency] to perform the terms of the agreement on the property of the Florida Turnpike System must
receive safety training provided by the Florid Turnpike Enterprise at [Agency's] expense which is the same training
provided to Florida Turnpike toll collectors.
The attached agreement, "License Agreement for Toll Plaza Advertising and XXX," contains the following additional
pertinent information:
A. Tollbooth, Coin Machine and Toll Receipt Agency License

1. The Agency is granted a non-exclusive license to use only the outside front windows of tollbooths, coin machines,
   and toll receipts at certain toll facilities on Florida's Turnpike System for the purpose of placing and maintaining
   advertisements and for no other purpose, activity, or operation whatsoever....
   B. Florida's Turnpike XXX Agency License
2. The Department grants the Agency a non-exclusive right to secure a sponsor for Florida's Turnpike XXX vehicles.
   The Agency may use space on Florida's Turnpike XXX vehicles to identify the sponsor....
   Taxpayer's Position
   Notwithstanding references in the foregoing described agreements to "license," Agency functions solely in the role of
   agent for the Florida Turnpike, contracting for tollbooth advertising with third party advertisers for the Turnpike.
   Agency does not own, lease or sublease the Turnpike's assets or fixtures. Agency does not have unrestricted access
   to the Turnpike's assets; nor does it have control over which ads are posted or not posted, what copy the ads contain,
   where they are posted on the tollbooth structures, what materials are used, or upon what they are installed or
   removed and by whom. Ultimate decision-making power and control in every respect rests explicitly with the Turnpike.
   Applicable Law and Discussion
   A. Tollbooth, Coin Machine and Toll Receipt Agency License:
   Pursuant to section 212.031(1)(a), F.S., it is 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, with
   enumerated exceptions.
   Section 212.02(12), F.S., provides in part:
   (12) "Person" includes ... any political subdivision, municipality, state agency, bureau, or department and includes the
   plural as well as the singular number.
   Section 212.02(10)(i), F.S., provides:

(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.
The term "real property" is defined in section 212.02(10)(h), F.S.:
(h) "Real property" means the surface land, improvements thereto, and fixtures, and is synonymous with "realty" and
"real estate."
A license to use real property is a personal privilege to do one or more acts on the land of another without possessing
an interest in the land. A license to do the act on such land involves the occupation of the land by the one holding the
license so far as this occupation is necessary to do the act by the licensee of the real property. Devlin v. The Phoenix,
Inc., 471 So.2d 93, 95 (Fla. 5th DCA 1985). A lease of real property contains in it the right of exclusion by the lessee
to such property of all others, including the owner of the property. Bodden v. Carbonell, 354 So.2d 927, 928 (Fla. 2nd
DCA 1978).
Pursuant to the License Agreement, Agency does not have an unrestricted use of the real property: "The Agency is
granted a non-exclusive license to use only the outside front windows of tollbooths, coin machines, and toll receipts at
certain toll facilities ... for the purpose of placing and maintaining advertisements and for no other purpose, activity, or
operation whatsoever." (Page 2, paragraph II.A.1.) Further, the License Agreement provides: "The Agency shall place
and remove sponsorship media on the Department's assets on only dates and times pre-approved in writing by the
Department's project manager. All access to the Department's tollbooths and Florida's Turnpike XXX vehicles [is]
restricted...." Finally, advertising cannot be changed during peak periods or during a XXX vehicle's shift. (Page 9,
paragraph II.D.7)
Nevertheless, Agency is acquiring a right to access the toll booth area in order to put up its advertising displays.
Section 212.02(10)(i), F.S., merely requires the granting of a privilege to use or occupy a building or parcel of real
property for any purpose. In this case, the licensee is receiving the right to use the toll booth area for the purpose of
posting, replacing, and maintaining its advertising displays.
The circumstances in this case are clearly distinguishable from those present in the TAA's referenced in your letter. In
TAA 92A-032, the Department, with respect to advertising space, declined to find a "use" sufficient to create a license
because the real property owner had the sole duty to place the advertising message on the real property and the sole
access to such placement area.
The Department reached the same conclusion in TAA 96A-041, because the real property owner again had the sole
duty to place the advertising message on the real property and the sole access to the placement area. In both cases
zero rights of access were granted to the purchaser of the advertising space. But in the instant case, Agency is the
party responsible for placing the advertising displays rather than the property owner, and Agency, by acting in
accordance with the entry provisions under the License Agreement, may access the placement area.
Section 212.02(10)(i), F.S., provides only that use of the property must be granted, and acting within the guidelines
provided by the License Agreement, the Agency most definitely may make use of the property in conducting it

intended business. Accordingly, the payments made for the placement of advertising materials on the toll booth
structures are taxable payments made in exchange for a license to use real property. The placement of advertising
under the XXX Program is addressed below.
B. Florida's Turnpike XXX Program:
Section 212.05(1)(d), F.S., imposes a tax "[a]t the rate of 6 percent of the lease or rental price paid by a lessee or
rentee, or contracted to be paid by a lessee or rentee, to the owner of tangible personal property."
Rule 12A-1.071, F.A.C., is the Department's administrative rule governing rentals, leases, or licenses to use tangible
personal property. Paragraph (1)(a) of the rule provides in part:
(1)(a) For the purpose of this rule, the term "lease" includes any rental or license to use tangible personal property,
unless a different meaning is clearly indicated by the context in which it is used....
Rule 12A-1.071(42), F.A.C., further provides:
(42) Charges made by buses, taxicabs, etc., for advertising space thereon are exempt.
The Department views the use of space on XXX vehicles for identifying the sponsor as analogous to that of placing
advertising on buses and taxicabs.
Conclusion
The Department concludes that the agreement for toll plaza advertising constitutes a taxable license to use real
property.
Further, the Department has promulgated Rule 12A-1.071(42), F.A.C., which states that charges made by vehicles
similar to XXX vehicles for advertising space are exempt. Accordingly, XXX sponsorship fees are also exempt from
the tax.
This response constitutes a Technical Assistance Advisement under s. 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 s. 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 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 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,
Dee Overcash
Technical Assistance and Dispute Resolution
Control No. 15618