Under this pre-October 1989 ruling, were long-term mobile-home site rent and government impact or permit fees included in Florida's sales tax base?

Plain-English summary

This ruling is historical: its official status line says the law concerning § 212.03(7)(c) was amended effective October 1, 1989. The conclusions below describe the Department's April 1989 position only.

Under the facts presented, lease payments for mobile-home sites were exempt because the lots were rented for at least one year as the purchasers' principal or permanent residences.

The seller also asked whether government charges had to be included in the taxable selling price of the mobile home. The listed charges included solid-waste, emergency-medical, parks-and-recreation, and road-and-transportation impact fees, a building-permit surcharge funding the Radon Trust Fund, and building-permit fees.

DOR made the result depend on who was legally obligated to pay the charge:

• If a governmental unit imposed the charge on the buyer, and the buyer was also the party paying sales tax, the charge was excluded from the mobile home's taxable selling price.
• If the charge was the seller's obligation as landowner, it was included in the taxable selling price.

Even when a buyer-obligation government fee qualified for exclusion, it had to be separately stated. If the seller bundled it into the total without separately stating it, DOR required the charge to be included in the taxable selling price.

What this means for you

Mobile-home sellers and park operators

Treat this page as historical research only. For the 1989 transactions described, the Department separated residential site rent from the mobile-home sale and then classified government fees by the legally responsible party.

Buyers and closing teams

The ruling's fee exclusion depended on the buyer being directly responsible for the government charge and on the charge appearing separately from the mobile home's selling price.

Accountants and tax professionals

Do not apply the one-year lease conclusion without researching the October 1, 1989 amendment and later law. The source does not state how that amendment changed the result.

Common questions

Were the minimum one-year mobile-home site leases taxed under the ruling? No, because the sites were intended as the purchasers' principal or permanent residences.

Were buyer-paid impact and permit fees part of the taxable mobile-home price? Not when the governmental unit imposed them directly on the buyer who also paid the sales tax and the charges were separately stated.

What if the seller owed the fee as landowner? The fee was included in the taxable selling price.

What if a qualifying buyer fee was not separately stated? It was included in the taxable selling price.

Does this state current law? No. The official source expressly flags a law amendment effective October 1, 1989.

Citations and references

• § 212.03(7)(c), Florida Statutes — historical residential mobile-home-site rental exemption addressed by the ruling and flagged as amended.
• § 212.02(4) and (17), Florida Statutes — “cost price” and “sales price” provisions discussed by DOR.
• § 212.03(1) and (6), and § 212.031(1)(c), Florida Statutes — rental-tax terms used in the government's charge analysis.
• § 212.05(3), Florida Statutes — provision DOR construed in explaining government charges.
• § 404.056, Florida Statutes, and Chapter 88-285, Laws of Florida — radon-related building-permit surcharge cited in the ruling.
• § 213.22, Florida Statutes — taxpayer-specific effect of the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 89A-023

Original ruling text

Title:

Fees/Taxable Sales Price of Mobile Homes

Status: Law Amended - Eff. 10/1/89 - s. 212.03(7)(c). F.S.

Apr 12, 1989

RE: TAA-89(A)-023
Whether Certain Fees Are Included in Taxable Sales Price of Mobile Homes Sections 212.02(4)(17), 212.03(1),(6),(7)(c), 212.031(1)(c), 212.05(3), 404.056, F.S.

Dear

This is a response entitled a Technical Assistance Advisement, to your letter dated October 29, 1988, in which you, as a general partner of XXX, doing business as XXX, hereinafter (Seller), pose questions on whether certain fees are to be included in the sales price of a mobile home which is attached to land owned by the Seller, which land is leased to the mobile home purchaser.

Your letter reads in pertinent part as follows:

"It is our understanding that no sales tax applies to leased mobile home sites which are covered by a one-year lease. All of our lots will be rented with a minimum one-year lease, thus being exempt from tax.

"There is attached to this letter a copy of our Purchase Agreement form. We wish your Advisement to cover the following items:

"1) Confirmation that impact fees and building permits (including the fee now assessed for the State in connection with radon gas) are not considered part of the selling price of the mobile home and are not subject to sales tax; "2) Various fees', line 6 belowUnit Price' (see red arrow) would include the total of the impact fees and

building permits and comprise the total amount due from the purchaser. If the customer desires an itemization of these fees, we could provide it on an addendum to the purchase agreement. However, we need to know if, under the law, it is mandatory to have such a separate statement for the omission (sic) of these fees from sales tax; and "3) Copies of receipts for impact/hook-on fees and building permits for a typical home sale."

Firstly, the lease of a mobile home site as a principal place of residence in a mobile home park is exempt from the imposition of sales tax. Section 212.03(7)(c), F.S., reads in full as follows:

"(c) The rental of facilities, including trailer lots, which are intended primarily for rental as a principal or permanent place of residence is exempt from the tax imposed by this chapter. The rental of facilities that primarily serve transient guests is not exempt by this subsection. In the application of this law, or in making any determination against the exemption, the department shall consider and be guided by, among other things: "1. Whether or not a facility caters primarily to the traveling public; "2. Whether less than half of the total rental units available are occupied by tenants who have a continuous residence in excess of 3 months; and "3. The nature of the advertising of the facility involved."

Accordingly, under the facts you present, no sales tax is applicable to the lease payments received by Seller from lessees of the mobile home sites when, as here, the lease terms are a minimum of one (1) year duration.

You also question whether the following fees are to be included in the total sales price against which the sales tax rate is applied:

(a) Impact Fees which are further designated as solid waste, emergency medical, parks and recreation, and road and

transportation impact fees including the surcharge on building permits used to fund the Radon Trust Fund provided by Chapter 88-285, L.O.F., which amended Chapter 404.056, F.S., and; (b) Building Permit Fees

The term "sales price" means the total amount paid for tangible personal property. In s. 212.02(17), F.S., the total amount includes:

"... any amount for which credit is given to the purchaser by the seller, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service cost, interest charged, losses, or any other expense whatsoever."

However, it is the position of the Department that any charge, as herein defined, placed on any transaction taxed under Part I, Chapter 212, F.S., by any governmental unit the payment of which is the obligation of the charged party, the charged party being the one who pays the sales tax, and is requisite to the receipt of the property or service sought by such party, the charge is not an element of the "total amount" as that term is used in s. 212.02(17), F.S., nor an element of "total rent or license fee", or of "total rental charged", as these terms are used in, respectively, s. 212.031(1)(c), F.S., and in s. 212.03(1),(6), F.S. Nor is such charge construed to be an "expense" as that word appears in s. 212.02(4), F.S. The exclusion of such charge from the taxable sale or rental amount does not conflict with s. 212.05(3), F.S., since that statute is construed to mean that the sales tax shall not be displaced or substituted by another tax or fee.

The word "charge" is defined for purposes of this letter as meaning any tax, license fee, special assessment, maintenance fee, building permit fee, impact fee or other similar charge levied by any governmental unit with respect to a transaction the payment of which rests directly on the person charged.

Accordingly, the governmental charges enumerated in your letter as impact fees, which are further designated as, solid waste, emergency medical, parks and recreation, and road and

transportation impact fees, including the surcharge on building permits used to fund the Radon Trust Fund, as well as the building permit fees, may not be included in the total taxable selling price of the mobile home if such charges are levied by a governmental unit on the charged party who is also the party who is obligated to pay the sales tax. If the enumerated charges are obligations of the Seller to pay as the owner of the land, similar to federal income tax, such charges shall be included in the taxable selling price of the mobile home. However, if such charges are the responsibility of the buyer to pay, and the buyer also pays the sales tax, the charge may not be included in the taxable sales price.

You are alerted that any government charges which, by the above analysis, are not part of the selling price must be separately stated; if not, the charges shall be included in the total taxable selling price.

This response constitutes a Technical Assistance Advisement 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 and your request are public records under Chapter 119, F.S., which are subject to disclosure to the public under of s. 213.22, F.S. Your name, address, and any other details which might lead to identification of the taxpayer must be deleted by the department before disclosure. In an effort to protect confidential information, we request you to notify the undersigned in writing within 15 days of any deletions you wish made to the request or this response.

Sincerely,

Robert G. Parsons
Technical Assistant

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