Were a section 501(c)(3) nonprofit's performance tickets exempt when a venue sold them as the nonprofit's agent?

Plain-English summary

The Florida Department of Revenue ruled that a section 501(c)(3) nonprofit's admission tickets for its performances were exempt from sales tax.

The nonprofit rented performance space, and the venue acted as its agent in selling tickets. Under the contract and the agent rule cited by the Department, the tickets sold through that venue also qualified for the nonprofit-admissions exemption.

The ruling drew a clear boundary: the exemption did not cover the nonprofit's or agent's sales of food or tangible personal property.

What this means for you

Nonprofit performance organizations

Document that the organization qualifies under section 501(c)(3) and that ticket sellers act as agents under an agreement consistent with Florida's admissions rule.

Venues and ticketing agents

An agent's ticket sale can retain the principal nonprofit's exemption, but the agent and principal must follow the rule's documentation and remittance framework.

Common questions

Q: Were the nonprofit's tickets taxable?
A: No. Section 212.04(2)(a)2 exempted the described admission charges.

Q: Did using a venue as ticketing agent destroy the exemption?
A: No. The contract described qualified under the Department's agent analysis.

Q: Did the nonprofit's general exemption certificate exempt all its sales?
A: No. The ruling says its sales of food and tangible personal property remained taxable.

Citations and references

• Fla. Stat. §§ 212.04(2)(a)2, 212.08(7)(p), and 213.22
• Fla. Admin. Code r. 12A-1.005(1)(c)2

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 17A-024

Original ruling text

December 28, 2017

Executive
Director
Leon Biegalski

TAX: Sales and Use Tax
TAA NUMBER:17A-024
ISSUE: Admissions sold by not-for-profit entity
STATUTE CITE(S): Section(s) 212.04(2)(a)2., F.S.
RULE CITE(S): Rule 12A-1.005, F.A.C.
QUESTION: Are Taxpayer’s admission ticket sales subject to sales tax?
ANSWER: No. Taxpayer admission ticket sales are exempted by s. 212.04(2)(a), F.S.

XXXXXXXX
XXXXXXXX
XXXXXXXX
Subject: Technical Assistance Advisement (“TAA”)
TAA 17A-024
Sales and Use Tax-Admissions
Section(s) 212.04, 212.08(7)(p), Florida Statutes (“F.S.”)
Rule(s) 12A-1.005, Florida Administrative Code (“F.A.C.”)
XXXXXXX (“Taxpayer”)(“Petitioner”)
Business Partner Number: XXXXXXXX
FEIN: XXXX
Exemption Certificate Number: XX-XXXXXXX
XXXXXXX (“Licensor”)(“Agent”)
Dear XXXX:
This letter is a response to your petition dated November 14, 2017, for the Department’s issuance
of a Technical Assistance Advisement (“TAA”) to Petitioner, regarding sales of admission
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

www.floridarevenue.com
Florida Department of Revenue
Tallahassee, Florida 32399-0100

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Technical Assistance Advisement
tickets by a not-for-profit entity. 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.
Issue
Whether Taxpayer’s admission ticket sales are subject to sales tax?

Facts
Taxpayer will be running productions of XXXXXXXX in XXXX Florida locations in XXXX.
Taxpayer has a Consumer’s Certificate of Exemption. The Exemption Category is as a 501(c)(3)
Organization.
You provided a copy of your contract for one location. The contract is with Licensor/Agent.
Licensor/Agent rents the performance center to Taxpayer for the performance events. Taxpayer
pays Licensor/Agent a flat rental fee and a rental charge for fifteen percent (15%) of the gross
receipts of ticket sales. The contract provides that Licensor/Agent will act as the Taxpayer’s
agent in connections with the collection of sales revenue from the sale of admission tickets for
Taxpayer. Licensor/Agent has the right to collect fees for when making sales on Taxpayer’s
behalf. The contract requires Taxpayer to remit sales taxes collected on the sale of admission
tickets. Taxpayer understands that Taxpayer will be required to collect and remit sales tax on
Taxpayer’s sales of tangible personal property.
Applicable Florida Statutes and Rules
Section 212.08(7)(p), F.S., provides:
(p) Section 501(c)(3) organizations.—Also exempt from the tax imposed by this
chapter are sales or leases to organizations determined by the Internal Revenue
Service to be currently exempt from federal income tax pursuant to s. 501(c)(3) of
the Internal Revenue Code of 1986, as amended, if such leases or purchases are
used in carrying on their customary nonprofit activities, unless such organizations
are subject to a final disqualification order issued by the Department of
Agriculture and Consumer Services pursuant to s. 496.430.
Section 212.04(1), F.S., requires admission providers to charge and collect sales tax on the sales
price or actual value received from the sale of admissions. Section 212.04(2)(a)2., F.S., provides
the following:

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Technical Assistance Advisement
(2)(a) Tax may not be levied on: ….

2. 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 s. 501(c)(3) of the Internal Revenue
   Code of 1954, as amended.
   Rule 12A-1.005(1)(c)2., F.A.C., provides the following:
3. An agent who collects admissions on behalf of a principal may forward the collected
   tax funds to the principal to be remitted by the principal to the Department. Both the
   principal and agent can be held liable for any failure to timely remit such tax funds to the
   Department. An agent shall not, however, be liable for its principal’s failure to timely
   remit tax funds to the Department if the agent has obtained the principal’s active Florida
   sales tax number and has disclosed in writing to the principal that when such agent remits
   proceeds from the sale of an admission to the principal the proceeds may include amounts
   that represent admissions tax and that it is the principal’s obligation to timely remit any
   taxes due and owing to the Department or other taxing authority.
   Analysis
   The exemption provided by s. 212.08(7)(p), F.S., only applies to the purchases and leases made
   by Taxpayer. The exemption does not apply to the sales of admissions, sales of tangible personal
   property, sales of taxable services, or rental income of Taxpayer.
   Section 212.04, F.S., requires admission providers and collectors of the admission to charge and
   collect the sales tax on the sales price or actual value received from the sale of admissions.
   Section 212.04(2)(a)2., F.S., provides an exemption for a not-for-profit entity under s. 501(c)(3)
   of the Internal Revenue Code of 1954, such as Taxpayer. Therefore, the sales of admission
   tickets by Taxpayer are not subject to sales tax.
   When Taxpayer makes sales of admission tickets through its agents, such as Licensor/Agent, the
   sale of admission tickets may qualify for the exemption provided by s. 212.04(2)(a)2., F.S. The
   actions of Taxpayer and Agent must comply with Rule 12A-1.005(1)(c)2., F.A.C. Based on the
   contract provided, Taxpayer’s admission ticket sales made through Licensor/Agent are not
   subject to sales tax.
   Sales of food and tangible personal property by Taxpayer and Agent are subject to sales tax.
   Concluding Statement
   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

Page 4 of 4
Technical Assistance Advisement
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,
Chuck Wallace

Chuck Wallace
Technical Assistance & Dispute Resolution
(850) 717-7541
AMS ID: 7000032350