Could a temporary-housing company lease furniture tax-free from suppliers when it acquired each item solely to re-lease to a customer?

Plain-English summary

The Florida Department of Revenue concluded that a temporary-housing company could lease furnishings from suppliers without tax when each lease was made solely to re-lease the property to a specific customer.

Customers selected whether they wanted furniture and chose its type and style. The company separately itemized furniture charges, maintained no general furniture inventory, issued resale certificates to suppliers, and collected sales tax on the rental charges billed to its customers.

That model differed from a hotel using its own furnishings to rent furnished rooms repeatedly. The supplier transactions qualified as leases for re-lease, subject to continued compliance with Florida's resale-documentation rules.

What this means for you

Furniture-rental intermediaries

Tie each supplier lease to an identified customer, keep furniture charges separate, and maintain valid resale documentation.

Temporary-housing providers

The supplier lease may be exempt while the downstream customer rental remains taxable.

Common questions

Q: Did the supplier charge tax on the furniture lease?
A: No, when the furniture was leased solely for re-lease.

Q: Did the customer rental remain taxable?
A: Yes.

Citations and references

• Fla. Stat. §§ 212.02(15), 212.07, and 213.22
• Fla. Admin. Code rr. 12A-1.071(6), 12A-1.039, and 12A-1.025

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 13A-017

Original ruling text

Executive Director
Marshall Stranburg

SUMMARY
QUESTION: Whether lease of furnishings by Taxpayer for subsequent re-lease to its customers is
subject to tax.
ANSWER: No. Taxpayer demonstrated that the re-lease of furnishings to customers under Rule 12A1.071(6), F.A.C., is not taxable, and that Taxpayer’s business model is distinct from the rental of furnished
accommodations by a hotel or other transient rental facility, which would be taxable as provided by Rule
12A-1.025, F.A.C. Taxpayer is properly collecting and remitting sales tax from its lessees.

August 20, 2013
XXX
XXX
XXX
Subject: Technical Assistance Advisement 13A-017
Sales and Use Tax
Lease of Tangible Personal Property
Section 212.07, Florida Statutes (“F.S.”)
Rule 12A-1.071(6), Florida Administrative Code (“F.A.C.”)
XXX (“Petitioner” or “Taxpayer”)
FEI Number: XXX
Dear
This letter is a response to your petition dated July 16, 2013, for the Department’s issuance of a
Technical Assistance Advisement (“TAA”) to Petitioner, concerning the lease and re-lease of
tangible personal property. Your petition has been carefully examined, and the Department finds
it to be in compliance with the requisite criteria set forth in Rule 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, F.S.

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Tony Powell, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

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Facts
Taxpayer is a business which provides temporary residential accommodations to individuals who
are in need of short term housing. The housing provided can extend in duration from one month
to several years, depending on the individual’s need. Taxpayer provides both furnished and
unfurnished accommodations and also leases furnishings to customers who already have
accommodations but require furniture and homegoods.
Taxpayer provides these furnishings independently of the provision of accommodations.
Although a customer may be billed for housing and furnishings at the same time, these are
separately itemized charges. Additionally, Taxpayer does not maintain an inventory of
furnishings to use with multiple or successive customers. Taxpayer works with a customer to
determine what furnishings are needed for that customer, and then it leases the necessary
furnishings from a supplier.
Taxpayer is registered with the State as a dealer, and furnishes a resale certificate to its suppliers
when leasing the selected tangible personal property. The duration of the lease of furnishings
from Taxpayer’s supplier generally matches the duration of the lease for the customer’s
accommodations.
While Taxpayer does provide short-term furnished housing like hotels and other transient rental
providers do, its business model is distinguishable from a hotel in several ways. First, Taxpayer
separately itemizes charges for furniture rentals in its leases. Next, such charges are entirely at
the customer’s option. Further, Taxpayer allows its customers to choose how much, what type,
and what style of furnishings will be provided, rather than providing a “one size fits all” package.
Finally, and most importantly, Taxpayer does not lease the furniture for its own consumption.
Taxpayer does not use the furniture to furnish transient accommodations which are rented “as is”
to a series of customers, as a hotel does. Instead, Taxpayer leases the furnishings solely for the
purpose of re-lease to specific and identifiable customers.
Taxpayer collects and remits sales tax on all rental charges charged to its lessees.
Requested Advisement
Are Taxpayer’s leases of furniture from suppliers exempt from tax as tangible personal property
leased for re-lease to third parties?
Applicable Law and Discussion
Unless a specific exemption applies, Chapter 212, Florida Statutes (“F.S.”), provides that it is the
legislative intent that the sale of tangible personal property is subject to tax. By definition, the
term “sale” includes the “lease” of tangible personal property. See s. 212.02(15), F.S. Further,
the lease of tangible personal property used by a hotel or other transient rental business is
specifically taxable under Rule 12A-1.025, F.A.C.
Taxpayer has provided documentation to distinguish its business model from that of a transient
rental provider. Thus, the rule for tangible personal property leased and used by hotels or other

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such businesses does not apply. Instead, the applicable rule in this case is the rule for the lease of
tangible personal property for the purpose of re-leasing the property to a third party.
Rule 12A-1.071(6), F.A.C., provides that a lease of tangible personal property for the purpose of
leasing the property to a third party is exempt from tax. Taxpayer provided sample leases with
customers and sample leases with furniture providers, as well as explanatory materials for its
business model. Taxpayer showed that each furniture lease from its provider is made on behalf
of a specific customer, and that Taxpayer maintains no independent inventory of furniture.
Based on this information, Taxpayer leases furniture specifically and solely for re-lease to its
customers. As such, the leases are therefore properly exempt under Rule 12A-1.071(6), F.A.C.
Provided that Taxpayer continues to comply with the general rules for resale transactions found
in Rule 12A-1.039, F.A.C., the leases with Taxpayer’s suppliers should be treated as sales for
resale, and tax should not be collected.
Conclusion
The lease of tangible personal property by Taxpayer from its suppliers for the purpose of re-lease
to its customers is not subject to sales tax. Taxpayer should continue to collect and remit sales
tax from its lessees.
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 10 days of the date of this
letter.
Respectfully,

Kimberly Bevis
Senior Attorney
Technical Assistance & Dispute Resolution
850-717-7170
Record ID: 148438