Were voluntary donations from shopping-complex retailers to an affiliated nonprofit taxable as part of the retailers' commercial rent?

Plain-English summary

Florida held that voluntary donations from retailers at a shopping complex to an affiliated nonprofit were not subject to sales and use tax as commercial rent.

The retailers leased their stores from a separate landlord. The nonprofit provided cultural, charitable, and entertainment activities for the complex. Retailers could fund it through donations, but the lease did not require payment, and the nonprofit gave the retailers no goods or services in exchange.

Fla. Stat. Sec. 212.031 taxes consideration paid for the privilege of using or occupying commercial real property. These donations were not part of that consideration because they were voluntary and not a condition of the lease.

The ruling separately noted that retailers solicited optional customer contributions and collected sales tax on those customer amounts, but that practice was not the question decided by the TAA.

What this means for you

Commercial landlords and tenants

The label “donation” was not enough by itself. The Department examined whether payment was required by the lease or purchased any property right, goods, or services.

Nonprofits affiliated with shopping centers

Voluntary support outside the lease was not taxable rent on these facts. A required payment or a payment tied to occupancy could produce a different result.

Common questions

Were the retailer donations taxable? No.

Why were they excluded from rent? They were voluntary, not required by the lease, and did not buy goods, services, or occupancy rights.

Did the ruling decide the tax treatment of customer contributions? No. The TAA said that issue was not relevant to the question presented.

Citations and references

• Fla. Stat. Sec. 212.031
• Fla. Admin. Code R. 12A-1.070

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 22A-011

Original ruling text

Question: Are voluntary donations paid to Taxpayer by retailers located at a Florida shopping
complex subject to Florida sales and use tax?
Answer: The voluntary donations paid to Taxpayer by retailors located at the Florida shopping
complex are not subject to Florida sales and use tax.

June 1, 2022

XXXXXX
XXXXXX
XXXXXX
XXXXXX
XXXXXX
Re:

Technical Assistance Advisement 22A-011
Sales and Use Tax – Rentals, Leases Tangible Personal Property
XXXXXX (“Taxpayer”)
FEI No. XXXXXX
BP No. XXXXXX
Section 212.031, Florida Statutes (F.S.)
Rule 12A-1.070, Florida Administrative Code (F.A.C.)

Dear XXXXXX:
This letter is a response to your petition dated XXXXXX, for the Florida Department of Revenue’s
(the “Department’s”) issuance of a Technical Assistance Advisement ("TAA") with regard to
whether voluntary donations received are subject to Florida sales and use tax. 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 section 213.22, F.S.
Requested Advisement
Are voluntary donations paid to Taxpayer by retailers located at a Florida shopping complex
subject to Florida sales and use tax?

Technical Assistance Advisement
June 1, 2022
Page 2

Facts as Provided
Retailers located in the XXXXX, Florida, rent their commercial property from XXXXX (the landlord).
Taxpayer is a non-profit 501(c)(3) company associated with landlord for the purpose of providing
cultural, charitable, and entertainment activities for the shopping complex. Activities are funded
by voluntary donations paid by the retailers to Taxpayer.1 All donations collected by the retailers
are forwarded to Taxpayer, along with a 5.5% sales tax2 which Taxpayer remits to the state.
No goods or services are provided by Taxpayer to the retailers. In addition, Taxpayer has provided
a copy of written lease agreement between the retailers and the landlord, which confirms that
funding of Taxpayer is not a requirement of the lease.
Applicable Law and Discussion
Section 212.031(1), F.S., provides the following, in pertinent part:
(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….

(c) For the exercise of such privilege, a tax is levied at the rate of 5.5 percent of and on
the total rent or license fee charged for such real property by the person charging or
collecting the rental or license fee. The total rent or license fee charged for such real
property shall include payments for the granting of a privilege to use or occupy real
property for any purpose and shall include base rent, percentage rents, or similar charges.
Such charges shall be included in the total rent or license fee subject to tax under this
section whether or not they can be attributed to the ability of the lessor’s or licensor’s
property as used or operated to attract customers…. (Emphasis added)
Rule 12A-1.070(1)(a),(4)(a)(b)(f), F.A.C., provides the following, in pertinent part:
(1)(a) Every person who rents or leases any real property or who grants a license to use,
occupy, or enter upon any real property is exercising a taxable privilege….

(4)(a) The tenant or person actually occupying, using, or entitled to use any real property
from which rental or license fee is subject to taxation under s. 212.031, F.S., shall pay the
1

The retailers solicit contributions from their customers, calculated as 2% of the retail sales transactions. Retailers
can choose whether to solicit contributions from their customers, and customers are free to contribute or not as they
choose. Although not relevant to the question being presented, it is noted that the retailers collect and remit sales tax
from the customer on any contribution the customer makes.
2
This is presumed to be the tax rate due on the rental of commercial property under s. 212.031, F.S.

Technical Assistance Advisement
June 1, 2022
Page 3

tax to his immediate landlord or other person granting the right to such tenant or person
to occupy or use such real property.
(b) The tax shall be paid on all considerations due and payable by the tenant or other
person actually occupying, using, or entitled to use any real property to his landlord or
other person for the privilege of use, occupancy, or the right to use or occupy any real
property for any purpose. The amount of tax due must be calculated with the use of the
applicable effective sales tax brackets. (Emphasis added)

(f) The tax shall be due and payable at the time of the receipt of the rental or license fee
payment by the lessor or other person who receives the rental or payment. The owner,
lessor, or person receiving the rent or license fee shall remit the tax to the Department at
the times and in the manner provided in Rule 12A-1.056, F.A.C.
Absent a specific exemption, the lease or rental of real property in Florida is subject to Florida
sales and use tax. The tax due is levied at the rate of 5.5 percent on the total consideration to
use or occupy the real property. See s. 212.031, F.S., and Rule 12A-1.070, F.A.C.
A review of the documentation and lease agreement provided shows that the voluntary donation
is not a part of the consideration for the lease or rental of real property located at the shopping
complex. Donations are not required to be paid to Taxpayer or the landlord as a condition of the
lease. In addition, no goods or services are provided to the retailers by Taxpayer. Therefore, the
voluntary donations received by Taxpayer from the retailers at the shopping complex are not
subject to tax.

Conclusion
The voluntary donations paid by retailors located at the Florida shopping complex to Taxpayer
are not subject to Florida sales and use tax.
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

Technical Assistance Advisement
June 1, 2022
Page 4

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.
Kind Regards,

Alan R. Fulton
Alan R. Fulton
Revenue Program Administrator I
Technical Assistance & Dispute Resolution
Record ID: 591533