Was the taxpayer's commercial real-property lease exempt from Florida sales and use tax?

Plain-English summary

The Florida Department of Revenue concluded that the taxpayer's commercial real-property lease was exempt from sales and use tax because the property served a qualifying statutory purpose.

The official Tax Law Library labels the ruling as involving property used for qualified motion-picture productions. The public letter, however, redacts the precise statutory subsection, the related statute, the certificate name, and most details of the qualifying activity. It therefore does not support a more specific description of the exemption test.

The Department instructed the taxpayer to give the landlord a copy of the relevant certificate.

What this means for you

Businesses claiming a specialized lease exemption

Obtain and deliver the required certificate to the landlord. This ruling does not reveal enough of the exemption language to determine whether another production or property use qualifies.

Landlords and tax professionals

Do not apply this result from the library title alone. Confirm the current statutory subsection, certification requirements, and the tenant's actual use before treating rent as exempt.

Common questions

Q: Was the lease taxable?
A: No. The Department said the leased property qualified for an exemption.

Q: What document did the taxpayer need to provide?
A: A copy of the relevant certificate, but its name and details are redacted in the public ruling.

Q: Does the public copy state the exact exemption requirements?
A: No. The operative subsection and much of the supporting statutory language are redacted.

Citations and references

• Fla. Stat. §§ 212.031 and 213.22
• The ruling cites another Florida statute, but its number is redacted in the public copy.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 18A-001

Original ruling text

Executive
Director
Leon Biegalski

QUESTION: WILL THE TAXPAYER’S LEASE BE SUBJECT TO SALES AND USE TAX?
ANSWER: NO. PROPERTY LEASED QUALIFIES FOR EXEMPTION.

January 10, 2018

XXXX
XXXX
XXXX
XXXX
Subject: Technical Assistance Advisement (“TAA”)
TAA 18A-001
Sales and Use Tax
Section 212.031, Florida Statutes (F.S.)
XXXX (the Taxpayer)
FEI Number: XXXX
BP Number: XXXX
Dear XXXX:
This letter is a response to your petition dated November 2, 2017, for the Department’s issuance
of a Technical Assistance Advisement (TAA) to Petitioner, regarding the taxability of a real
property lease. 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
The issue is whether a real property lease (the Lease) between the Taxpayer and XXXX, (Lessor)
is subject to Florida’s sales and use tax.
Facts
Your TAA request provides, in part, the following:
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

Page 2 of 5
Technical Assistance Advisement
[The Taxpayer] is a global XXXX business wholly-owned by XXXX, which in turn is
owned and controlled by XXXX.
[The Taxpayer] is comprised of a U.S. national XXXX, a group of XXXX serving the
major U.S. markets, a XXXX, the XXXX in the U.S., XXXX operation including XXXX
and XXXX and an international XXXX arm that XXXX mostly XXXX worldwide to
more than XXXX and in over XXXX.
Through its XXXX and XXXX, [the Taxpayer] XXXX a high level of XXXX and
XXXX aimed at XXXX and XXXX in the United States and worldwide, consisting of
XXXX. More than XXXX and XXXX and or XXXX is XXXX and XXXX by [the
Taxpayer].
[The Taxpayer] is headquartered in XXXX and conducts the majority of XXXX activities
at its facilities in the XXXX.
In XXXX, after an extensive multi-state search [the Taxpayer] committed to base its
XXXX headquarters operations in XXXX. [The Taxpayer] selected a site of
approximately XXXX upon which to construct a building consisting of approximately
XXXX and XXXX (the “Building”), located in XXXX. [The Taxpayer] intends to bring
under one roof, multiple XXXX from several prior locations XXXX.
A lease transaction was entered into pursuant to which XXXX would improve the
property and construct the building. This lease (hereinafter called “the Lease”) was
entered into in XXXX, by and between [Lessor], as the landlord, and [The Taxpayer], as
tenant. The lease has an initial term of XXXX years; however, [the Taxpayer] has the
right, at its sole option, to extend the initial term of the Lease for XXXX additional
successive period(s) of XXXX years.
Substantially all of the property is essential to [the Taxpayer]’s XXXX operations and is
substantially used as part of the XXXX of its XXXX and XXXX. [The Taxpayer] will
apply through the XXXX for the XXXX as a XXXX pursuant to XXXX [1], once the
application window opens XXXX. [The Taxpayer] also intends to apply to the
Department for XXXX at that time, pursuant to XXXX. . . .
Article 2., labeled, “USE”, of the Agreement, provides in pertinent part:
Tenant may use the Premises for general, executive and administrative offices and for
XXXX and other related uses and uses incidental or ancillary thereto, including, without
limitation, office space associated with the XXXX and XXXX, including broadcast,
distribution, sales and marketing, of XXXX services in connection therewith and for
ancillary uses connected to the foregoing (the “Intended Use”). At the present time, it is
1

The Taxpayer has since received a XXXX (XXXX), dated XXXX, from the Department.

Page 3 of 5
Technical Assistance Advisement
anticipated that the following uses, without limitation, shall be deemed to be ancillary
and permitted uses: (a) a cafeteria, dining room, kitchen, pantries and other reasonable
food service and preparations installations, (b) vending machines, (c) libraries, (d) day
care facilities, (e) health and recreation facilities, (f) board rooms, conference rooms and
training rooms and facilities, (g) health care centers and first-aid rooms, (h) messenger
and mail room facilities, (i) computer and communications systems, including without
limitation XXXX, (j) employee lounges, (k) file rooms, (1) XXXX, (m) XXXX XXXX,
and (n) security rooms.
Landlord expressly acknowledges that Tenant will be running and is hereby authorized to
run a XXXX at the Premises. Subject to Legal Requirements (as hereinafter defined),
Tenant shall have access to and use of the Premises 7 days per week, 24 hours per day
and 365 days per year.

Tenant may use the Premises for Tenant’s Intended Use, but not otherwise.
Applicable Law & Discussion
Section 212.031, Florida Statutes provides in pertinent part:
Tax on rental or license fee for use of real property.—
(1)(a) It is 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 for the use of any real property unless such property is:

XXXXXXXX XXXXXXXXX XXXXXXXXXXX XXXXXXXXXX
XXXXX XXXXXXXXXX XXXXXXX XXXXXXXXXX XXXXXX
XXXXXX XXXXX XXXXXXX XXXXXXXXX XXXXXXXXXXX
XXXX XXXXXXXXX XXXXXXX XXXXXXXXX XXXXXXXXX
XXXXX
XXXXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXXX
XXXXXXXXX XXXXXXX XXXXXXXX XXXXXXXX XXXXXX
XXXXX XXXXXXX XXXXXXX XXXXXXXXXX XXXXXXXXX
XXXXXX XXXXXXXX XXXXXXXX XXXXXXXXX XXXXXXX
XXXXXXXX XXXXXXXXX XXXXXXXXXXXX XXXXXXXXX
XXXXX XXXXXXX XXXXXXXX XXXXXXXXXX XXXXXXXX
XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXX
XXXXXX XXXXXXXX XXXXXX XXXXXXXX XXXXXXXXXX
XXXXXXXXX XXXXXXXX XXXXXXX XXXXXXXX XXXXXX
XXXXX XXXXX

Page 4 of 5
Technical Assistance Advisement

XXXXXXXX XXXXXXXXX XXXXXXXX XXXXXXX XXXXXX
XXXXXX XXXXXXX XXXXXXXXX XXXXXXX XXXXXXXXX
XXXXXXXX XXXXXXXXXX XXXXXXX XXXXXXXX XXXXX
XXXXXXXXXX XXXXXXXXXX
Section XXXX, F.S., provides in pertinent part:
XXXXXXXXX XXXXXXXXXXXXX XXXXXXXXXXXX XXXXXXXXXX
XXXXXX XXXXXXXXXXX XXXXXXXXXXXX XXXXXXXXX XXXXXX
XXXXXXX XXXXXXXXXXXXX XXXXXXXXXXXXX XXXXXXXXXXX
XXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXX XXXXXXXX
XXXXX XXXXXXXX XXXXXXXX XXXXXXXXX XXXXXXXXXXXXX
XXXXXXXXX XXXXXXXXX XXXXXXXX XXXXXXXXXX XXXXXXX
XXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXX XXXX
XXXXXXXXXX XXXXXXXXXX XXXXXXX XXXXXXXX XXXXXXXX
XXXXXX XXXXXXXXXX XXXXXXXXX XXXXXXXX XXXXXXXXXX
XXXXXXXXXX XXXXXXXX
The subject real property lease indicates the exempt purpose per sections 212.031(1)(a)X., F.S.
and XXXX, F.S.
Conclusion
The Lease between the Taxpayer and the Lessor is not subject to Florida’s sales and use tax.
Accordingly, the Taxpayer should provide a copy of its XXXX (XXXX) to the landlord.
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.

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Technical Assistance Advisement

Respectfully,
R. Clay Brower
Technical Assistance & Dispute Resolution
(850) 717-6306
Control No: 28978