Were admissions to an event co-promoted by a county and a section 501(c)(3) foundation exempt from Florida sales tax?

Plain-English summary

Admissions to the county-foundation event were taxable. Under the governmental-event exemption then in effect, the governmental sponsor had to bear 100% of the event's risk of success or failure and supply 100% of the funds at risk. The agreement instead divided revenues, expenses, profits, and losses equally between the county and the foundation.

The foundation's section 501(c)(3) status did not produce a nonprofit admission exemption either. The foundation did not solely sponsor the event or solely impose the admission charges; the county and foundation acted together.

The agreement designated the foundation as the "User" responsible for event tax returns, so the Department concluded that the foundation was responsible for collecting and remitting admissions tax.

What this means for you

This is a historical ruling about a March 2009 event. The specific governmental-entity exemption discussed in the TAA was repealed effective July 1, 2009. Even under that former provision, equal co-promotion did not meet a requirement that the government bear all risk and supply all at-risk funds.

Common questions

Did the county-sponsored-event exemption apply? No. The county shared risk and funds equally with the foundation.

Did the foundation's nonprofit status exempt the admissions? No. It was not the sole sponsor and did not solely impose the admission charges.

Who was responsible for collecting and remitting tax? The foundation, because the agreement assigned that responsibility to it as the event's designated user.

Citations and references

• Fla. Stat. §§ 212.04(2)(a)2.a., b. and 212.21(2); Fla. Admin. Code r. 12A-1.005(1); Department of Revenue v. Anderson, 403 So. 2d 397 (Fla. 1981); and Housing by Vogue, Inc. v. Department of Revenue, 403 So. 2d 478 (Fla. 1st DCA 1981), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-051

Original ruling text

QUESTION:
Are admissions to an event co-promoted by the County and a 501(c)(3) organization subject to
sales tax?
ANSWER:
The event does not qualify for an exemption from Florida’s sales tax.
October 8, 2009
XXX
Re:

Technical Assistance Advisement 09A-051
Sales & Use Tax – Admissions
Section: 212.04, Florida Statutes (F.S.)
Rule: 12A-1.005, Florida Administrative Code (F.A.C.)
Petitioner: XXX(herein after “County”)
XXX (“Foundation”)

Dear XXX:
This letter is a response to your petition dated August 10, 2009, and supplemental information
received by the Department on September 3, 2009, for the Department's issuance of a Technical
Assistance Advisement (TAA) concerning the above referenced party and matter. Your petition
and the supplemental information have been carefully examined and the Department finds them
to be in compliance with the requisite criteria set forth in Chapter 12-11, Florida Administrative
Code. This response to your request constitutes a TAA and is issued to you under the authority
of Section 213.22, F.S.
FACTS
The County and Foundation entered into an event Co-Promotion Agreement (Agreement) in
December 2008, for an event to be held, in the County’s Amphitheatre & Fairgrounds, in March
2009. The agreement called for the County and the Foundation to share 50/50 in the revenues
and expenses, dividing the profit and losses equally between the parties. The Agreement
provided:
1) REVENUES – The parties shall divide all revenues including but not limited to ticket
sales, parking, ticket rebates, net artist and event merchandising, net sponsorship
revenues, net food and beverage (including alcohol) revenues, other concessions or rental
income and any other revenue streams arising from the event equally with each party
receiving ½ of said revenues.
2) EXPENSES – [County] & [Foundation] will split all expenses equally with each
promoter responsible for ½ of the costs. This shall include but is not limited to; facility
rental, insurance, police, security, permits & licenses, equipment rental, artist expenses,

Technical Assistance Advisement
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travel, hotel accommodations, and all other unforeseen expenses.
3) Profit/Losses – all profits or losses shall be equally divided between the parties.
REQUESTED ADVISEMENT
You have asked the Department to review the contract between the two co-promoters and
provide you with an official binding statement clarifying whether sales tax on admissions should
have been collected and if so, which party(ies) is (are) responsible for its collection.
APPLICABLE LAW
Section 212.04(2)(a), F.S., provides, in part:

(2)(a)2.a. No tax shall be levied on dues, membership fees, and admission charges
imposed by not-for-profit sponsoring organizations. To receive this exemption, the
sponsoring organization must qualify as a not-for-profit entity under the provisions of s.
501(c)(3) of the Internal Revenue Code of 1954, as amended.
b. No tax shall be levied on admission charges to an event sponsored by a governmental
entity, sports authority, or sports commission when held in a convention hall, exhibition
hall, auditorium, stadium, theater, arena, civic center, performing arts center, or publicly
owned recreational facility and when 100 percent of the risk of success or failure lies
with the sponsor of the event and 100 percent of the funds at risk for the event belong to
the sponsor, and student or faculty talent is not exclusively used. As used in this subsubparagraph, the terms "sports authority" and "sports commission" mean a nonprofit
organization that is exempt from federal income tax under s. 501(c)(3) of the Internal
Revenue Code and that contracts with a county or municipal government for the purpose
of promoting and attracting sports-tourism events to the community with which it
contracts. This sub-subparagraph is repealed July 1, 2009. (emphasis supplied)

Rule 12A-1.005(1), F.A.C., provides, in applicable part:
(1)(a) Every person is exercising a taxable privilege when such person sells or receives
anything of value by way of admissions, as defined in s. 212.02(1), F.S., except those
admissions that are specifically exempt. . . .
The declaration of legislative intent for Chapter 212, F.S., Tax on Sales, Use, and Other
Transactions, is contained in Section 212.21(2), F.S., and provides in relevant part:
It is hereby declared to be the specific legislative intent to tax each and every sale,
admission, use, storage, consumption, or rental levied and set forth in this chapter, except
as to such sale, admission, use, storage, consumption, or rental as shall be specifically

Technical Assistance Advisement
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exempted therefrom by this chapter subject to the conditions appertaining to such
exemption. . . .
(emphasis supplied)
RESPONSE
The legislature has declared its intention in Section 212.21(2), F.S., that each and every sale,
admission, use, storage, consumption, or rental of tangible personal property is taxable, subject
only to the exemptions and exclusions contained within Chapter 212, F.S., itself. The threshold
legislatively created assumption, therefore, is that every sale of an admission is subject to tax,
unless it is shown that an exemption or exclusion applies. Important to this analysis is the
manner in which the law requires construction of an exemption. Florida courts have consistently
held that exemptions must not be expanded beyond their express terms and must be narrowly
construed against the taxpayer. See Department of Revenue v. Anderson, 403 So.2d 397 (Fla.
1981); Housing by Vogue Inc. v. Department of Revenue, 403 So.2d 478 ( Fla. 1st DCA 1981)
Consequently, under Florida law, the burden is on the taxpayer, as the party claiming the
exemption, to establish from its actual books and records that it is clearly entitled to a particular
exemption.
Since the event under question occurred in March 2009, the exemption in Section 212.04(2)
(a)2.b., F.S., from tax for admission charges by governmental entities, which expired effective
July 1, 2009, required the governmental entity to be 100 percent at risk for the success or failure,
and that 100 percent of the funds at risk belong to the sponsor. From the language of the
Agreement, this was clearly not the case for the event in question. The County and the
Foundation were equally at risk for the success or failure and the funds at risk belonged equally
to each party.
Looking to the exemption found in Section 212.04(2)(a)2.a., F.S., for admission charges imposed
by not-for-profit sponsoring organizations, the not-for-profit organization must qualify under the
provisions of Section 501(c)(3) of the Internal Revenue Code of 1954, as amended. The
Foundation qualifies, and holds an exemption certificate, as a 501(c)(3) organization. However,
the event was not solely sponsored by the Foundation, and the admissions were not solely
imposed by the Foundation. Rather, as expressed in the agreement and as stated by the County
in a phone conversation, both parties were responsible for imposing and collecting the ticket
charges regarding this issue. Therefore, since the exemption must be narrowly construed against
the taxpayer seeking the exemption, the event in question does not qualify for the exemption
found in Section 212.04(2)(a)2.a., F.S.
CONCLUSION
Since the event did not qualify for an exemption from sales tax on the admission charge, the
admission charges were subject to Florida’s sales tax. Pursuant to Section 15, Taxes, of the
Recitals to the Agreement, the User (Foundation) shall be responsible for the filling of any and

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all federal, state, and local tax returns associated with the event. Therefore, the Foundation, as
the designated “User,” was responsible for the collection and remittance of the sales tax
collected on the admission charges.
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 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 10 days of the date of this
letter.
Sincerely,

Horace Royals
Senior Tax Specialist
Technical Assistance & Dispute Resolution

Record ID: 69418