Were reservation, condominium-application, and optional golf-transfer fees taxable as transient-accommodation rent?

Plain-English summary

A real-estate broker handling transient rentals charged a nonrefundable reservation fee to process paperwork. Condominium or homeowners' associations separately charged nonrefundable application fees for rental approval. Some communities also charged an optional transfer fee for access to golf, fitness, tennis, shuttle, and other amenities.

Florida found the reservation and condominium application fees were not taxable rental charges because they paid for processing an application, did not guarantee approval or occupancy, and were not credited against rent. The optional golf transfer fee was also not lodging rent because a guest could occupy the accommodation without paying it.

The answer was limited. Florida stated that the golf transfer fee might still be taxable as an admission. It also declined to decide tourist development tax because the counties involved collected and administered that tax themselves and were not bound by the TAA.

What this means for you

A separately stated label does not decide taxability. For transient lodging, Florida looked at whether the fee was required as a condition of occupancy and whether an application fee reduced the rent. Optional amenity access and true application processing fell outside the rental charge here.

Common questions

Why were the reservation and condominium fees not lodging rent? They paid for application processing, were nonrefundable regardless of approval, and were not credited against rent.

Why was the golf transfer fee not lodging rent? Guests could use the accommodation without paying it; only guests wanting the amenities paid the fee.

Was the golf fee entirely tax-free? Not necessarily. The ruling says it may be subject to sales tax as a taxable admission.

Did the TAA decide county tourist development tax? No. The counties administered that tax locally and were expressly not bound by the Department's conclusion.

Would a mandatory fee be treated the same way? The ruling says amounts required as a condition of using or possessing transient accommodations are rental charges, even if separately stated.

Citations and references

• Fla. Stat. § 212.03(1) (tax on total transient-accommodation rent)
• Fla. Admin. Code r. 12A-1.061(3)(b), (d) (mandatory charges and application-processing fees)
• Fla. Stat. § 212.04 and Fla. Admin. Code r. 12A-1.005 (possible admissions tax noted for the golf fee)
• Fla. Stat. § 125.0104(10) (local tourist development tax administration)
• Fla. Stat. § 213.22(1) (nonprecedential scope of a TAA)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06A-045

Original ruling text

SUMMARY
QUESTION: Are "reservation fees," "condominium application fees," and "golf transfer fees" subject to tax as rental
charges paid for transient accommodations?
ANSWER - Based on Facts Below: No, such fees are not included in rental charges subject to tax, when the
reservation fee and condominium application fee are paid for the processing of applications to rent transient
accommodations, and the golf transfer fee is not required to be paid as a condition of the use or possession, or the
right to the use or possession, of a transient accommodation.

December 19, 2006

Re: Technical Assistance Advisement 06A-045
Transient Accommodation Fees
Sections: 125.0104, 212.03(1), and 213.22(1), F.S.
Rule: 12A-1.061(3), F.A.C.
Dear
This is a response to your letter dated November 15, 2005, in which you have requested a Technical Assistance
Advisement on the taxability of certain fees imposed on the rental of transient accommodations.
Stated Facts
In your letter, you state the following facts:
XXX [hereinafter "Taxpayer"] is a licensed real estate broker in the State of Florida. As part of its brokerage activities,
its rental division procures leases, collects rents from tenants for third party landlords and remits appropriate sale
taxes to the State of Florida and tourist development taxes to the appropriate county. Many of the properties that are
leased are located within condominiums or community associations. Three different fees are routinely charged where
applicable.
First: A fee which [Taxpayer] calls a reservation fee is charged to interested tenants by [Taxpayer] and is typically
$30.00. This fee is for [Taxpayer] to process and coordinate paperwork between tenant and the association to
determine if the proposed tenant qualifies for rental of the property. The $30.00 fee is paid to [Taxpayer] and is not
refundable to tenant regardless of whether or not a lease is entered into.
Second: Most condominium associations (and some homeowner's associations) charge a lease application fee which
under the condominium statute cannot exceed $100.00. The proposed tenant typically fills out the condominium
association's application and submits it directly to the condominium association together with the required fee. The fee

is not refundable to the tenant regardless of whether or not the condominium association approves the lease. The
lease agreement typically provides that the tenant is responsible for applying to the condominium association and
paying the lease application fee. The lease agreement also typically provides that the lease is subject to, and
contingent upon, the approval of the condominium association.
Third: Some association communities which have golf privileges or other amenities impose a transfer fee in order to
process the paperwork for the tenant to use the golf, club, fitness, tennis, beach shuttle or other facilities and
amenities and to set up the account for the tenant to charge golf fees, cart fees, food, beverage, etc., at the club. This
transfer fee is paid directly by the tenant to the club or homeowner's association and is typically a flat fee.
Your letter further states that one county has informally advised you that the fees are not subject to sales tax and
tourist development tax, while a second county has asserted that the fees are subject to sales tax and tourist
development tax. You ask the Department to provide written guidance on whether these three fees are subject to
sales tax and tourist development tax. You have enclosed two sample leases for the Department's review. You have
also enclosed a copy of a Memorandum from the Office of County Attorney, stating that county's position that the
three fees are subject to sales tax and tourist development tax as rental charges.
The first rental agreement, titled "Seasonal Lease Agreement," separately states the reservation fee in its list of fees
that the Tenant agrees to pay, and further states that the Tenant agrees to pay a condominium application fee (if
applicable) and a golf transfer fee. This agreement makes no further direct reference to the fees in question; however,
the agreement does state that the Landlord will attempt to find a replacement tenant if Tenant cancels his occupancy,
and if no replacement tenant is procured, all monies will be due and paid deposits will be forfeited to Landlord. If a
new tenant is procured, Landlord will credit against the balance due from Tenant any rentals received from the new
tenant for the unexpired term of the lease (less any commissions payable plus a $250.00 service fee to the rental
agent). See paragraph 3, page 1 of Seasonal Lease Agreement.
The second rental agreement, titled "Short Term Rental Agreement," does not include any breakdown of fees or
charges. Paragraph 17 of that agreement states that reservation fees are non-refundable. Paragraph 19 states that, in
the event of a cancellation with less than 45 days advance notice, one half of the rental fee will be retained by the
owner, and that no refunds will be given for cancellations with less than 2 weeks notice. This agreement makes no
other reference to the fees at issue.
In a telephone call on December 19, 2005, you stated that all fees are paid by a potential guest prior to the guest
entering a lease agreement. Neither the reservation fee nor the condominium application fee is ever credited toward
the guest’s rent. The golf transfer fee is not required to be paid if the guest does not wish to use any golfing facilities,
and the guest may use the accommodations even if the golf transfer fee is not paid.
Taxpayer's Position
Taxpayer believes the three fees referenced in its letter are not subject to sales tax and tourist development tax as the
rental of transient accommodations.

Applicable Authority and Discussion
Section 212.03, F.S., states in part:
(1) It is hereby 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 to use any living quarters or sleeping or housekeeping
accommodations in, from, or a part of, or in connection with any hotel, apartment house, roominghouse, or tourist or
trailer camp.... For the exercise of such taxable privilege, a tax is hereby levied in an amount equal to 6 percent of and
on the total rental charged for such living quarters or sleeping or housekeeping accommodations by the person
charging or collecting the rental....
Rule 12A-1.061(3), F.A.C., states in part:
(3) RENTAL CHARGES OR ROOM RATES.

(b)1. Rental charges or room rates include any charge or surcharge to guests or tenants for the use of items or
services that is required to be paid by the guest or tenant as a condition of the use or possession, or the right to the
use or possession, of any transient accommodation….

(d) Charges or fees for the processing of a registration application or other application for approval to rent, lease, let,
or license a particular transient accommodation are not subject to tax, unless the charges are used to offset or reduce
rental charges or room rates that are charged to a guest or tenant who has been approved to rent, lease, let, or
license that accommodation.

Advisements
First, it should be noted that this advisement is written specifically to address the sales tax implications under Section
212.03, F.S., to the facts provided. As noted in the facts above, the taxpayer states that it has received informal
advice from two different counties regarding the tax implications to the facts provided. Both of these counties have
opted for local collection and administration of the tourist development tax imposed under Section 125.0104, F.S.,
pursuant to Section 125.0104(10), F.S. Furthermore, both counties in question have elected to assume all
responsibility for auditing the records and accounts of dealers, and assessing, collecting, and enforcing payments of
delinquent taxes pursuant to Section 125.0104(10)(c), F.S.
Section 213.22(1), F.S., provides in pertinent part that:
Technical assistance advisements shall have no precedential value except to the taxpayer who requests the

advisement and then only for the specific transaction addressed in the technical assistance advisement .... A technical
assistance advisement is not ... a rule or policy of general applicability under s. 120.54....
Based upon the foregoing, this Technical Assistance Advisement does not address the tourist development tax
implications under Section 125.0104, F.S., to the facts provided, and the counties in question are not bound by the
conclusion(s) reached herein.
That said, any person granting a license to use any living quarters or sleeping accommodations is exercising a taxable
privilege under the provisions of Section 212.03(1), F.S. The rental charges include the total consideration received
for the use of the accommodations, provided that such amounts are required to be paid by the guest as a condition of
the use or possession of the accommodations. If an amount is required to be paid as a condition of the use or
possession of the accommodation, then it is irrelevant if the amount is separately stated on the guest's invoice.
Rule 12A-1.061(3)(d), F.A.C., specifically states that fees paid for the processing of an application for approval to rent
a particular transient accommodation are not subject to tax as rental rates, unless the fees are used to offset or
reduce the rental charges. Under the facts presented, both the reservation fee and the condominium application fee
are paid for the processing of an application for approval to rent a transient accommodation. Neither fee guarantees a
potential tenant with the right to use a transient accommodation. Neither fee is used to offset or reduce the potential
guest's rental charges. Therefore, both the reservation fee and the condominium application fee fall within the
provisions of Rule 12A-1.061(3)(d), F.A.C., and are not subject to tax as rental payments.
Charges subject to tax as transient accommodation rental charges include only those items that are required to be
paid as a condition of the use or possession, or the right to the use or possession, of any transient accommodation.
Only those guests that wish to use the golfing facilities available are required to pay the golf transfer fee. If a guest
does not pay the fee, he or she is still entitled to use the accommodations. Therefore, the golf transfer fee at issue is
not required to be paid as a condition of the use or possession, or the right to the use or possession, of the transient
accommodation, and is not subject to tax as rental charges for transient accommodations. Please note that the golf
transfer fee may be subject to sales tax as a taxable admission, pursuant to Section 212.04, F.S., and Rule 12A1.005, F.A.C.
Closing Statement
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 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.
If you have any further questions with regard to this matter and wish to discuss them, you may contact me directly at
(850) 488-9669.
Sincerely,
Tammy S. Miller
Senior Attorney
Technical Assistance & Dispute Resolution
Record ID: 17860