After a recreational club merges into a homeowners' association, are mandatory Sports Membership assessments and optional Full Membership assessments taxable Florida admissions?

Plain-English summary

The described mandatory Sports Membership assessments were not taxable, but the Full Membership assessments were taxable. Florida generally taxes dues and fees paid to private or membership clubs providing recreational facilities. A narrow rule excludes mandatory homeowners' association charges when the required conditions are met.

The Department accepted the requester's assertions that the Sports assessments were mandatory, paid to a homeowners' association, required as a condition of owning property where the common areas were located, and used for common-area maintenance rather than entitlement to use the recreational property. The Full Membership assessments failed that test because they were not mandatory payments required as a condition of ownership.

What this means for you

Homeowners' associations and community managers

Document why each assessment is mandatory, who must pay it, how it relates to property ownership, and how the money is used. The label assigned to a membership or fee does not replace those facts.

Private clubs considering an HOA merger

A merger does not make every recreational charge exempt. Separate qualifying ownership-based maintenance assessments from optional or upgraded membership charges that purchase additional club rights.

Accountants and tax professionals

Florida construes exemptions narrowly. Trace the governing documents and accounting use of each assessment to every element of Rule 12A-1.005(4)(d), and collect admissions tax when a charge falls outside it.

Common questions

Q: Why were the Sports Membership assessments not taxed? A: On the stated facts, they were mandatory HOA payments required by property ownership and used for common-area maintenance, not payments for entitlement to use the club's recreational property.

Q: Why were Full Membership assessments taxable?
A: They were not mandatory payments to the association as a condition of owning property and therefore did not strictly satisfy the exemption.

Q: Does payment to a homeowners' association automatically make club dues exempt? A: No. The charge must meet all the conditions stated in the rule, including the ownership and use-of-funds conditions.

Q: Did the ruling decide every initiation charge, contribution, or capital assessment after the merger? A: No. The Department expressly limited the TAA to assessments payable by property owners for common-area and club-facility maintenance.

Citations and references

• Fla. Stat. §§ 212.02(1), 212.04(1)-(2), and 212.08(13)
• Fla. Stat. § 720.301(9)
• Fla. Admin. Code r. 12A-1.005(4)(d)3.
• Fla. Stat. § 213.22; Fla. Admin. Code ch. 12-11
• Department of Revenue v. Anderson, 403 So. 2d 397 (Fla. 1981)
• State ex rel. Szabo Food Services, Inc. v. Dickinson, 286 So. 2d 529 (Fla. 1973)
• Asphalt Pavers v. Department of Revenue, 584 So. 2d 55, 57 (Fla. 1st DCA 1991)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 26A19-004

Original ruling text

Florida Department of Revenue
Office of Technical Assistance

5050 West Tennessee Street Tallahassee FL 32399

Jim Zingale
Executive Director

floridarevenue.com

QUESTION: Taxpayer requests advisement on whether any fees, contributions or capital assessments relating to the use of Taxpayer’s recreational facilities would be subject to Florida sales and use tax after the contemplated Merger of Taxpayer and Association, wherein the surviving entity is Association. More specifically, as the Sports Membership would be the lowest membership level of the merged entity (Association), and as the dues paid for this level of membership would be a mandatory payment to Association as a condition of ownership of property, these dues may be categorized as nontaxable admissions. ANSWER: Assessments for Sports Memberships would not be subject to tax due to the following assertions made by Taxpayer regarding such Assessments: 1) Assessments addressed in this advisement are mandatory; 2) Assessments addressed in this advisement are paid to Association, which is a homeowner’s association under s. 720.301(9), F.S.; 3) Assessments addressed in this advisement are required to be paid as a condition of ownership of real property where the common areas are located; and 4) Assessments addressed in this advisement are used for Association’s costs for common area maintenance and are not for the entitlement to use Taxpayer’s Community Property. QUESTION: Further, Assessments paid for the remaining membership (Full Membership) would be subject to sales tax to the extent the payments were in excess of the mandatory fees for the Sports Membership, as these Assessments are not mandatory payments to Association as a condition of ownership of property. ANSWER: Assessments paid for the remaining membership (Full Membership) would be subject to sales tax as these Assessments are not mandatory payments to Association as a condition of ownership of property and such Assessments are not in strict compliance with the conditions of the exemption found in Rule 12A-1.005(4)(d), F.A.C.

Technical Assistance Advisement
March 3, 2026
Page 2

March 3, 2026

Via email:
Re:

Technical Assistance Advisement – TAA #: 26A19-004
(“Taxpayer/Club”)
Sales and Use Tax – Admissions
Sections 212.02 and 212.04, and Florida Statutes - (“F.S.”)
Rule 12A-1.005, Florida Administrative Code - (“F.A.C.”)
FEI#:
BP #:

Dear
This is in response to your letter dated
, requesting this Department’s issuance of a
Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S., and Rule Chapter 12-11 F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request has been carefully examined, and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S. Requested Advisements Taxpayer requests advisement on whether any fees, contributions or capital assessments relating to the use of Taxpayer’s recreational facilities would be subject to Florida sales and use tax after the contemplated Merger of Taxpayer and Association, wherein the surviving entity is Association. More specifically, as the Sports Membership would be the lowest membership level of the merged entity (Association), and as the dues paid for this level of membership would be a mandatory payment to Association as a condition of ownership of property, these dues may be categorized as nontaxable admissions. Further, Assessments paid for the remaining membership (Full Membership) would be subject to Florida sales tax to the extent the payments were in excess of the mandatory fees for the Sports Membership, as these membership fees and assessments are not mandatory payments to Association as a condition of ownership of property.

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March 3, 2026
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Facts
In email correspondence dated,

, Taxpayer asserted the following:

•
The Assessments addressed in this advisement are mandatory.
•
The Assessments addressed in this advisement are paid to Association, which is a homeowner’s association under s. 720.301(9), F.S.
•
The Assessments addressed in this advisement are required to be paid as a condition of ownership of real property where the common areas are located.
•
The Assessments addressed in this advisement are used for Association’s costs for common area maintenance and aren’t for the entitlement to use the common areas. Taxpayer is a member-owned not-for-profit Florida corporation that has members. Additionally, equity members of Taxpayer are Association homeowners as well. Taxpayer is governed by Chapter 617, F.S., and by the Taxpayer’s Articles of Incorporation, By-Laws, and Rules and Regulations. Taxpayer currently owns, operates, and maintains certain “Taxpayer Facilities” which consist substantially of recreational amenities, including, but not limited to, golf, tennis, pool, clubhouse, fitness, restaurants, spa, and social facilities. Association is a master homeowner’s association, which is a not-for-profit Florida corporation, consisting of residential properties. Association is governed by Chapter 617 and 7201, F.S., and also by recorded restrictive covenants including, but not limited to, the Declaration of Master Covenants, Articles of Incorporation, By- laws, and Rules and Regulations, as originally recorded and as same has been amended and restated from time to time (collectively referred to as “Master Association Documents”). Association is responsible to maintain, amongst other things, the community’s entrance area, streets, perimeter gates, perimeter walls, streetlights, lakes, and other areas designated as “Common Properties” by Association’s Declaration of Master Covenants. Association and Taxpayer each conduct their operations within the property located in
, Florida, and are comprised of substantially the same memberships except for Full Equity Non-Resident Members, Social Non-Resident Member, and Invitational Members as of the anticipated merger date, all of whom are not members of Association. A limited number of non-equity Invitational Memberships may be offered by Taxpayer on an annual or seasonal basis in order to promote the sales of residences and home sites in the Taxpayer’s community and to introduce Taxpayer to prospective members.

1

Section 720.301(9), F.S., provides, “Homeowners’ associations” or “association” means a Florida corporation responsible for the operation of a community or mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. The term “homeowners’ association” does not include a community development district or other similar taxing district created pursuant to statute.

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These Invitational Memberships may not be acquired by persons who own property in Taxpayer’s community. The Invitational members are not entitled to vote on any Taxpayer matters and do not have any equity or ownership interest in Taxpayer or Taxpayer facilities. It is important to emphasize that following the effective date of the Merger, each person who acquires a residence or homesite in Taxpayer’s community must acquire a Club Membership unless they are one of the very few who are eligible for Grandfathered Tennis Owner status, discussed later. Taxpayer and Association desire to merge, effective
, in a transaction pursuant
to which Association will be the surviving corporation. A Plan of Merger has not been fully finalized at this time, however, there are certain conditions and requisites that will be met as required by Florida Statutes. As a condition of the proposed Merger, the respective Board of Directors will vote first, followed by a positive vote by the requisite number of Association members and Taxpayer members. It is contemplated that the Merger will be consummated substantially in accordance with a Plan of Merger pursuant to which: (i) Taxpayer will be merged with and into Association as authorized by
§617.0302(16), F.S.; (ii) Association, as the surviving corporation, will continue to be a Florida not-for-profit corporation and a homeowner’s association pursuant to §720.301(9),F.S.; (iii) all other matters pertaining to the terms and conditions of the Merger, including the manner and basis of converting the memberships of Taxpayer into memberships of the surviving corporation; recitation of the approval of the plan of Merger by the boards of directors of both Association and Taxpayer respectively, and recitation of the voting approvals required by both Association members and Taxpayer members will be incorporated into the finalized merger documents. Further, the Declaration, By-Laws of Association, and the Articles of Incorporation of Association will be amended and restated per the Merger Documents. Pursuant to §617.1103(1)(a), F.S., a Plan of Merger will be adopted by the members of the corporation entitled to vote on a Plan of Merger, and the Board of Directors of each corporation will adopt a resolution approving the proposed Merger plan and directing it to be submitted to a vote of the members at a meeting called for such purpose. Pursuant to the proposed merger documents, and by operation of law, Association, as the surviving corporation, will own and control all property previously owned by Taxpayer as part of the Common Property, including without limitation, all of Taxpayer’s recreational facilities. Further, the Equity Social Memberships certificates previously issued by Taxpayer will be exchanged for membership certificates of Association to be held by each and every owner of property within Taxpayer’s community (“Owner”) as part of the retained equity ownership structure. Once Taxpayer’s recreational facilities become part of the Common Property, each Owner will have a right and easement of enjoyment to use the swimming pool, exercise and clubhouse facilities, and dining facilities within the Common Property ("Common Facilities") during the general operating hours for such facilities and subject to Association Documents, including without limitation, payment of all applicable amounts to Association. However, in order for an Owner to use the golf facilities or racquets facilities (collectively referred to as “Club Property”) an Owner must acquire a Club Membership in Association. An Owner who does not acquire a Club Membership shall not

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be permitted to use the Club Property, even as a guest, unless they are one of the few remaining Grandfathered Tennis Owners who are only permitted to use the racquets facilities and not the golf facilities. Following the effective date of the merger, an applicable Owner shall be required to purchase a Club Membership upon conveyance of any Lot. Following the effective date, there will be two classifications of Club Memberships: (i) Full Memberships and (ii) Sports Memberships. There will also be a very limited number of Grandfathered Tennis Owners. However, The Grandfathered Tennis Owner classification will cease to exist by attrition following the effective date of the merger. A Full Membership entitles the Club Member to use the golf and racquets facilities provided at the property. Full Members shall not be charged green fees or court fees for use of the golf and racquets facilities but shall pay the applicable golf cart fees or annual trail fees. Full Members shall have such advance sign-up privileges to reserve golf starting times and racquets’ court times as may be established by the Board of Directors from time to time. A Sports Membership entitles the Club Member to use the racquets facilities provided at the property. Sports Members may also use the golf facilities, including the practice range and putting green, from without the payment of green fees. Sports Members may play golf, whether as a guest or otherwise, up to from and must pay the required green fees. The Board may, from time to time, permit additional use of the golf facilities by Sports Members during off-peak times. Sports Members shall always have a lessor advance signup privilege to reserve golf starting times than Full Members and shall pay the required golf cart fees or annual trail fees for use of the golf facilities. Sports Members shall have the same advance signup privilege to reserve racquets’ court times as Full Members and shall not pay court fees for use of the racquets facilities. A Grandfathered Tennis Owner is a person who has the ability to use the racquets facilities but who has not acquired a Club Membership. Grandfathered Tennis Owners will have the same privileges that they had prior to the Merger and will only be entitled to vote on matters related to the racquets’ facilities. Note that following the effective date of the merger, all applicable owners shall be required to acquire a Club Membership in either the Full Membership or Sports Membership Category (except for the very few who are eligible for Grandfathered Tennis Owner status). Thus, a Sports Membership is the lowest category that will be available to all new owners because the lower categories (social membership and tennis membership) will not be available to purchasers and, over a relatively short period of time, any remaining memberships that are not Full Memberships or Sports Membership will cease to exist by attrition. Pursuant to the proposed Merger Documents, each Owner shall have vote for each Unit it owns in connection with all Association matters other than those related to the Club Property. Club Members will have the following additional voting rights related to Club Property (golf facilities and racquets facilities):

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March 3, 2026
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Full Members shall be all those persons or entities who have acquired a Full Membership and shall have votes in matters related to the Club Property. Sports Members shall be all those persons or entities who have acquired a Sports Membership and shall have votes in matters related to the Club Property. In addition to all other Assessments payable to Association by Owners, Club Members shall pay Club Assessments in connection with access to and use of the Club Property based upon the subbudget for the Club Property as determined by the Board in accordance with the Master Covenants and By-Laws. These Club Assessments shall be apportioned among the Club Members as follows: (a) Full and Sports Members shall pay on an equal basis for amounts related to the golf facilities; and (b) all Club Members, and any remaining Grandfathered Tennis Owners, shall pay on an equal basis for amounts related to racquets facilities. Taxpayer Position Taxpayer believes, based on the relevant Florida Statutes and Administrative Code, that the required Assessments to be paid to Association, as the surviving entity of the merger in connection with membership, will represent nontaxable admissions pursuant to Rule 12A-1.005(4)(d)3., F.A.C. because, such amounts are: (i) mandatory fees payable by property owners in the Community; (ii) paid to a homeowners association; (iii) required to be paid as a condition of ownership; and (iv) the Club Community Property will be part of the common elements or common areas of the real property constituting the Community. The governing documents require that all existing and new owners become Club Members, except for the few who are grandfathered. Further, upon conveyance of a Lot, the applicable owner shall be required to acquire a Club Membership. The Full Equity Non-Resident Members, Social Nonresident Member, Invitational Members Grandfathered Tennis Owners are de minimis, inconsequential and should be disregarded in determining that the Sports Membership assessments are exempt. Further, the initiation charges paid to join the Master Association as the surviving entity of the Merger should be exempt from sales tax pursuant to Rule 12A-1.005(4)(a)1. a., F.A.C. as the initiation charge would be paid to join or obtain an equitable ownership interest in the organization. Finally, Taxpayer believes that, if the Master Association establishes capital assessments payable by members of the Master Association, the surviving entity of the merger, then these capital assessments should be exempt pursuant to Rule 12A-1.005(4)(a)2., F.A.C. because any such Master Association capital assessments will (i) be separately accounted for and not recorded in an operating revenue account; (ii) not be paid for the right to use the organization’s recreational, physical fitness, or other facilities without subsequent periodic payments; (iii) not be used to decrease user fees or periodic membership dues; and (iv) not be used to pay for the operating expenses of the organization.

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March 3, 2026
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Law and Applicable Rule
Section 212.04(1) and (2), F.S., provide that it is the legislative intent that every person is exercising a taxable privilege who sells or receives anything of value by way of admissions and such person must add 6% sales tax to each admission sold, unless a specific exemption2 applies. Section 212.02(1), F.S., defines the term, “admissions,” as “. . . the net sum of money after deduction of any federal taxes for admitting a person or vehicle or persons to any place of amusement, sport, or recreation . . . and all dues and fees paid to private clubs and membership clubs providing recreational or physical facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, exercise, and fitness facilities, . . .” Rule 12A-1.005(4)(d), F.A.C., provides in part as follows: (d) Fees paid to private clubs or membership clubs that do not entitle the payor to the use of the club’s recreational or physical facilities are not subject to tax. Examples of such fees are:

3. Mandatory dues and fees paid to a condominium association, homeowners’ association,
   or cooperative association when they are required to be paid as a condition of ownership or occupancy of real property and the club facilities are part of the common elements or common areas of the real property. Accordingly, pursuant to the Rule non-taxable dues and fees must be:
   ▪ mandatory;
   ▪ paid to a condominium, homeowners, or cooperative association;
   ▪ required to be paid as a condition of ownership or occupancy of real property; and
   ▪ do not entitle the payor to use of the club’s recreational or physical facilities. Conclusion
   ** Please note that this TAA will only opine on Assessments used for Association’s costs for Taxpayer/Club common areas and Taxpayer/Club facilities’ maintenance, which are payable by property owners.

2

Section 212.08(13), F.S.., provides that no transactions shall be exempt from the tax imposed by Chapter 212, F.S., except those expressly exempt. In this regard, Florida courts have consistently held that exemptions must not be expanded beyond their express terms and must be strictly and narrowly construed against the taxpayer. See Department of Revenue v. Anderson, 403 So.2d 397 (Fla. 1981); State ex rel. Szabo Food Services. Inc. v. Dickinson, 286 So.2d 529 (Fla. 1973). See also Asphalt Pavers v. Dept. of Revenue, 584 So.2d 55 (Fla. 1st DCA 1991), at 57 (citing the rule that exemptions from tax are strictly construed against the taxpayer, with any ambiguity resolved in favor of the administrative agency).

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March 3, 2026
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Assessments for Sports Memberships would not be subject to tax due to the following assertions made by Taxpayer regarding such Assessments: 1) Assessments addressed in this advisement are mandatory; 2) Assessments addressed in this advisement are paid to Association, which is a homeowner’s association under s. 720.301(9), F.S.; 3) Assessments addressed in this advisement are required to be paid as a condition of ownership of real property where the common areas are located; and 4) Assessments addressed in this advisement are used for Association’s costs for common area maintenance and are not for the entitlement to use Taxpayer’s Community Property. Assessments paid for the remaining membership (Full Membership) would be subject to sales tax as these Assessments are not mandatory payments to Association as a condition of ownership of property and such Assessments are not in strict compliance with the conditions of the exemption found in Rule 12A-1.005(4)(d), F.A.C. This response constitutes a TAA under s. 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 s. 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 s. 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 TAA, 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 ten (10) days of the date of this letter. If you have any further questions with regard to this matter and wish to discuss them, you may contact me directly at (850)717-6363. Sincerely,

Leigh L. Ceci
Leigh L. Ceci, MAcc
Tax Law Specialist
Office of Technical Assistance
CC:

Record ID: 7001516307

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March 3, 2026
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Office of Technical Assistance Satisfaction Survey
The Florida Department of Revenue invites you to complete the online Office of Technical Assistance Satisfaction Survey to help us identify ways to improve our service to taxpayers. The survey is an opportunity to provide feedback on your recent experience with the Department’s office of Office of Technical Assistance. To access the survey, place the following address in your browser’s access bar: https://tadr.questionpro.com When you open the survey, you’ll be asked to enter the following information. This information will enable you to complete and submit the survey. Notification number:

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