Did a marina's purchase of electricity qualify for Florida's residential-utility exemption when its boat slips were not separately metered?

Plain-English summary

The marina asked whether its electricity purchases qualified for Florida's residential-utility exemption. Its dockage agreement prohibited full-time residency, the slips could be used for both residential and nonresidential purposes, and no slip had its own meter.

Florida explained that a docked boat can be a residential household when it is actually used as living accommodation. But the exemption requires the electricity associated with a meter to be used only for exempt residential purposes.

Because multiple mixed-use slips received electricity without separate metering, the marina's entire electricity purchase was taxable and did not qualify for the exemption.

What this means for you

For the residential-electricity exemption, use and metering work together. If one meter serves any nonresidential use, the sale associated with that meter can become fully taxable even though some occupants use boats as residences.

Common questions

Can a docked boat ever count as a residential household? Yes, when it is used as living accommodation.

Why did this marina fail the exemption? Its unmetered slips had both residential and nonresidential uses.

Would separately metered slips necessarily be exempt? The TAA did not decide that broader question; each meter would still need exclusively qualifying residential use.

Citations and references

• Fla. Stat. §§ 212.05(1)(e)1.c. and 212.08(7)(j) and Fla. Admin. Code r. 12A-1.053, as discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11A-014

Original ruling text

SUMMARY
QUESTION: Does a marina’s purchases of electricity qualify for the exemption for residential
utilities?
ANSWER: No. The boat slips are used for both residential and nonresidential purposes and the
electricity is not separately metered for each boat slip; therefore, the electricity is for mixed-use
and does not qualify for exemption.
May 17, 2011

XXX
XXX
XXX
Re:

Technical Assistance Advisement 11A-014
Electricity Used at a Boat Marina
Sections 212.05(1)(e) and 212.08(7)(j), Florida Statutes (F.S.)
Rule 12A-1.053, Florida Administrative Code (F.A.C.)

Dear
This is a response to your letter dated August 17, 2010, in which you have requested a Technical
Assistance Advisement on electricity used at a boat marina.
Stated Facts
Your letter states that you have been contacted by an unrelated business about a potential tax
refund on your company’s utilities. You state that the business indicated that your company
would qualify for exemption under s. 212.08(7)(j), F.S., on purchases of electricity used at the
marina. You previously sought guidance from the Department on this issue and submitted a copy
of your company’s Marina Dockage Agreement with that request. The Department issued you
LTA 10A-733, stating the opinion that the marina’s purchase of electricity would not qualify for
exemption because the electricity was used for both exempt and taxable purposes. The LTA
stated that you had not provided any information as to the manner in which the electricity was
metered at your facility. Your current letter states that none of your facility’s boat slips are
individually metered.
Taxpayer’s Position
Your current letter states that you understand the Department’s position as set out in the
previously issued LTA but you would like to request an official TAA for your records.

Applicable Authority and Discussion
Sales of electricity are generally taxable transactions. See Section 212.05(1)(e)1.c., F.S.
However, the sale of electricity is exempt when the electricity is 1) sold to a residential
household, and 2) no portion of the electricity is used for a nonexempt purpose. See Section
212.08(7)(j), F.S., and Rule 12A-1.053, F.A.C. The Department has determined that a boat may
be considered a residential household when it is tied-up or otherwise docked at a marina and is
being used as a living accommodation.
The focus of this exemption is upon the use made of the property by the occupant. The occupant
must use the household exclusively for residential purposes. “Residential,” for the purpose of s.
212.08(7)(j), F.S., means that the occupant must make the household his or her residence, either
temporarily or permanently. However, 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.
The Marina Dockage Agreement that you provided to us states in #38 of the agreement that "fulltime residency aboard any vessel within the Marina is strictly prohibited." The agreement also
provides that this statement means "a vessel docked at the facility and inhabited by a person or
persons for any five (5) consecutive days or a total of ten (10) days within a thirty (30) day period."
You state that none of your boat slips are separately metered. Since the slips are not separately
metered and the slips may be used for residential or nonresidential purposes, the electricity is
considered as mixed-use and does not qualify for the exemption provided for in Section
212.08(7)(j), F.S.
Advisements
Your company’s purchases of electricity do not qualify for exemption under s. 212.08(7)(j),
F.S.
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) 717-7105.
Sincerely,

Tammy S. Miller
Senior Attorney
Technical Assistance & Dispute Resolution
Control No:

88194