Was a radio broadcaster's lease of tower space exempt because the tower stood on a privately owned dirt access road?

Plain-English summary

Florida exempted a radio broadcaster's lease of tower space and fixtures under the real-property rental exemption for communications property on a public or private street or right-of-way.

The Department had previously concluded that the tower site was not a right-of-way. Additional facts showed, however, that the tower had been constructed on a privately owned dirt access road serving several structures and other operations on the parcel. Florida treated that access road as a private street.

The broadcaster was a communications-services provider and used the tower for radio communications. With the private-street requirement satisfied, the lease qualified for the exemption in section 212.031(1)(a)5.

What this means for you

Radio broadcasters and tower tenants

The physical and legal character of the land beneath a tower can determine whether rent is taxable. Here, the exemption rested on evidence that the site was on a private street, not merely on calling it a right-of-way.

Property and tax teams

Parcel records, permit activity, access-road use, and the communications use of the equipment all mattered to the conclusion.

Common questions

Was the site a right-of-way? No, according to the Department's analysis.

Why did the exemption still apply? The dirt access road qualified as a private street, and the tower was used by a communications provider for communications purposes.

Did the mobile-communications branch of the exemption apply? No. The ruling says the taxpayer was not a mobile communications provider.

Citations and references

• Fla. Stat. Sec. 212.031(1)(a)5.
• Fla. Stat. Sec. 177.031(17)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 21A-001

Original ruling text

QUESTION: Whether Taxpayer’s lease qualified for an exemption for radio broadcasters
provided for by s. 212.031(1)(a), F.S.?

ANSWER: Yes. The leased premises were on a private street or right-of-way and used
for the required equipment for broadcasting communications purposes by a radio
broadcaster.

January 8, 2021
XXXXX
XXXXX
XXXXX
RE:

Technical Assistance Advisement No. 21A-001
Sales and Use Tax – Lease of Communication Tower Space
XXXXXX (“Taxpayer”)
FEI No. XX-XXXXXXX
Sections 177.031, 212.031, 403.503, and 610.103, Florida Statutes (F.S.);
Rule 12A-1.070, Florida Administrative Code (F.A.C.)
XXXXXXX (“Tower Licensor”)
XXXXXXX (“Prior Broadcast Company”)
XXXXXXX (“Ground Lessee”)
XXXXXXX (“Tower Site”)
XXXXXXX (“Landowner”)

Dear XXX XXXXXXXXXX:
This letter is a response to your petition on behalf of XXXXXX (“Taxpayer”), dated March 11,
2020 (received March 16, 2020), for the Florida Department of Revenue’s (the
“Department’s”) issuance of a Technical Assistance Advisement ("TAA") with regards to the
sales tax implications on the lease of space on a communications tower. Your petition has
been carefully examined and the Department finds it 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 s. 213.22, F.S. The response to
Taxpayer on July 10, 2020 is fully incorporated by reference.

Florida Department of Revenue
Page 2

Requested Advisement
Whether Taxpayer’s lease of tower space and fixtures for the transmission of radio signal
qualifies for the sales tax exemption provided in section 212.031(1)(a)5., F.S.
Facts
Taxpayer, a radio broadcaster, has use rights to a tower provided by Tower Lessor for the
purpose of radio transmission. Taxpayer acquired use rights of Tower Site from Prior
Broadcast Company. Tower Site is built on a portion of property subject to ground lease from
Landowner to Ground Lessee. Ground Lessee assigned a portion of the land to Tower Licensor
who provided Tower Site use rights to Prior Broadcast Company pursuant to the Site License
Agreement. Taxpayer obtained its use rights pursuant to an Asset Purchase Agreement with
Prior Broadcast Company.
Taxpayer provided copies of the Asset Purchase Agreement, the Site License Agreement, the
Consent to Assignment from Ground Lessor, copies of the original Memorandum of Lease
between Landowner and Ground Lessee, and the Assignment and Assumption of Ground
Lease between Prior Broadcast Company and Ground Lessee.
The parcel involving the ground lease is XXXXXX acres, and the Site License Agreement is for
XX square feet. In addition to the Tower Site rental location, there are other tenants located
on the parcel. The parcel includes a dirt track access road not part of the County road system.
Since the previous response was issued, the Department was able to identify additional facts
not previously submitted. The property tax appraiser identifies several structures on the
parcel owned by Landowner that were on the parcel prior to the construction of the Tower
Site. These include an office building, storage facilities, and other structures. The parcel’s
dirt track access road provides access to the structures and to accommodate heavy duty
trucks, other off-road vehicles, and various other equipment and vehicles for other
operations conducted by landowner on the parcel. The operations include storage of boats
and equipment for others, cutting of wood chips, fill dirt operations, and other types of
operations related to licensed general construction operations by Landowner.
Based on the permit activity, Tower Site was constructed on the dirt access road privately
owned by Landowner. The road was widened at the Tower Site to accommodate traffic on
the parcel to its current dimensions.
Taxpayer Argument
Taxpayer argues that section 212.031(1)(a)5., F.S., applies because the tower is built on a
right-of-way.

Florida Department of Revenue
Page 3
Applicable Law and Discussion
Section 212.031(1)(a)5, F.S., provides:
(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:

5. A public or private street or right-of-way and poles, conduits, fixtures, and
   similar improvements located on such streets or rights-of-way, occupied or
   used by a utility or provider of communications services, as defined by s.
   202.11, for utility or communications or television purposes. For purposes of
   this subparagraph, the term “utility” means any person providing utility
   services as defined in s. 203.012. This exception also applies to property,
   wherever located, on which the following are placed: towers, antennas,
   cables, accessory structures, or equipment, not including switching
   equipment, used in the provision of mobile communications services as
   defined in s. 202.11. For purposes of this chapter, towers used in the provision
   of mobile communications services, as defined in s. 202.11, are considered to
   be fixtures.
   Two separate exemptions from taxation on the rental, lease, or license to use real property
   are contained within s. 212.031(1)(a)5, F.S. One exemption applies to property that
   constitutes a public or private street or right-of-way, on which certain improvements or
   fixtures are located, while the other applies to property used for mobile communication
   services. Since Taxpayer is not a mobile communication provider, it is only pertinent to
   discuss the exemption given to property located on a right-of-way.
   To qualify for the exemption for the property that constitutes a public or private street or
   right-of-way, on which certain improvements or fixtures are located, the following elements1
   must be satisfied:
   1) The property is a public or private street or right-of-way;
   2) Poles, conduits, fixtures, and similar improvements are located on such street or
   right-of-way;
   3) The property is occupied or used by a utility or provider of communications services
   as defined by s. 202.11; and
   4) The property is used for utility, communications, or television purposes.
   Taxpayer asserts that it leases tower space and fixtures on a communications tower located
   on a private “right-of-way.” As provided in the previous letter to Taxpayer dated July 10,
   2020, the location is not a “right-of-way.” Therefore, the Tower Site is not built on a right-ofway.
   1

See Cox Radio, Inc., Case Number DOR-07-2-DS.

Florida Department of Revenue
Page 4

In regard as to whether the access road is a “private street”, the legislature did not define the
word “street” for purposes of the exemption contained in section 212.031(1)(a)5., F.S.
Streets are typically considered a type of a road and are located in a town or city. While the
words “road” and “way” are frequently used interchangeably, the word “way” is more
generic, including many things besides roads. Section 177.031(17), F.S., defines the word
“Street” to include “[A]ny access way such as a street, road ….” The word road can include
dirt track roads as the one here. Since Taxpayer is a communication services provider and is
using the tower for communication purposes, the exemption applies.

Concluding Statement
Based on the information obtained after the response issued July 10, 2020, Taxpayer’s lease
of space on the Tower Site qualifies for the exemption provided by s. 212.031(1)(a)5., F.S.
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 that 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 15 days of the date of this letter.
Sincerely,

Chuck Wallace
Technical Assistance & Dispute Resolution
Florida Department of Revenue
Record ID: 449377