Could short condominium rentals qualify for Florida's longer-than-six-month transient-rental exemption based only on an oral lease?

Subject

Lease Longer Than Six Months

Plain-English summary

The short condominium rentals were taxable because they were not supported by bona fide written leases longer than six months. The taxpayer argued that an oral lease could be legally valid in Florida, but the Department said validity was not enough: the tax exemption expressly required the qualifying longer-term lease to be in writing.

Because the rentals lasted less than six months and lacked the required written lease, they were subject to the state transient-rental tax and the county convention development tax described in the ruling.

What this means for you

The ruling treated the exemption's documentation condition as mandatory. An enforceable oral agreement did not substitute for the statute's express written-lease requirement.

Common questions

Q: Did a valid oral lease qualify? No.

Q: What written term was required for the advance exemption? A bona fide written lease longer than six months for continuous residence.

Q: Did the state exemption affect the county tax? Yes. Because the rentals were not exempt under section 212.03, they were not exempt from the convention development tax either.

Citations and references

• Fla. Stat. § 212.03(1), (4) — tax on living accommodations and longer-than-six-month lease exemption
• Fla. Stat. § 212.0305(3)(a) — convention development tax on transient rentals
• Fla. Stat. §§ 212.08(13) and 212.21(2) — express exemptions and legislative intent
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-042

Original ruling text

Jul 15, 1993

RE: TAA 93A-042
XXX ("Taxpayer")
Lease Longer Than Six Months
Sections 212.03(1) and (4), 212.0305(3)(a) 212.08(13),
212.21(2), F.S.

Dear :

This is in response to your letter of April 6, 1993, in
which you requested the issuance of a technical assistance
advisement on behalf of XXX (hereinafter "County") concerning
the taxability of rental payments from tenants of a condominium
not covered by a bone fide written lease for longer than six
months.

Your letter provides in part:

"1. Pursuant to Rule of the Department of Revenue Chapter
12-11.003, the [County] respectfully requests a technical
assistance advisement in the above case.

"2. [County] has imposed a special district convention
development tax pursuant to Florida Statute 212.0305(4)(c)
implemented by [County] Ordinance No. 84-11, as amended.

"3. The [County] auditor conducted an audit at the above listed
taxpayer's condominium for the period covering April 1, 1990 to
July 31, 1992. The taxpayer claimed an exemption for rentals
for periods less than six months which were not supported by
written leases as indicated in the County audit findings, page
2, paragraph (1). (Exhibit 1)

"4. On February 3, the Taxpayer through her attorney, XXX
claimed that a `written' lease was not necessary to claim the
exemption and that since an oral lease for less than 12 months
is valid in the State of Florida, [Taxpayer] was exempt from the
assessed taxes. See Exhibit (2)

"5. The [County's] position is that in order to be exempt from
the convention development taxes under Chapter 212.0305 that the
provisions of (3)(a) which state `any payment made by a person
to rent, lease, or use any living quarters or accommodations
which are exempt from the tax imposed under Section 212.03 shall
likewise be exempt from any tax imposed under this section', and
as Florida Statute 212.03(4) requires a bona fide written lease
[emphasis added] to qualify for the exemption, the taxpayer must
have bona fide written leases in the instant situation to
qualify for the exemptions. Your advice as to this position is
respectfully requested."

APPLICABLE AUTHORITY

Section 212.03(1), and (4), F.S., provides in part:

"(1) It is hereby declared to be the legislative intent
that every person is exercising a taxable privilege who
engages in the business of renting, leasing, or letting any
living quarters or sleeping or housekeeping accommodations
in, from, or a part of, or in connection with any hotel,
apartment house, roominghouse, or tourist or trailer camp.
For the exercise of such privilege, a tax is hereby levied
in an amount equal to 6 percent of and on the total rental
charged for such living quarters or sleeping or
housekeeping accommodations by the person charging or
collecting the rental. Such tax shall apply to hotels,
apartment houses, roominghouses, or tourist or trailer
camps whether or not there is in connection with any of the
same any dining rooms, cafes, or other places where meals
or lunches are sold or served to quests.
"(4) The tax levied by this section shall not apply to, be
imposed upon, or collected from any person who shall have
entered into a bona fide written lease for longer than 6
months in duration for continuous residence at any one
hotel, apartment house, roominghouse, tourist or trailer
camp, or condominium, or to any person who shall reside
continuously longer than 6 months at any one hotel,
apartment house, roominghouse, tourist or trailer camp, or
condominium and shall have paid the tax levied by this

section for 6 months of residence in any one hotel,
roominghouse, apartment house, tourist or trailer camp, or
condominium...." (Emphasis Supplied)

Section 212.0305(3)(a), F.S., provides:

"(3) APPLICATION; ADMINISTRATION; PENALTIES.
"(a) The convention development tax on transient rentals
imposed by the governing body of any county authorized to
so levy shall apply to the amount of any payment made by
any person to rent, lease, or use for a period of 6 months
or less any living quarters or accommodations in a hotel,
apartment hotel, motel, resort motel, apartment, apartment
motel, roominghouse, tourist or trailer camp, mobile home
park, recreational vehicle park, or condominium. When
receipt of consideration is by way of property other than
money, the tax shall be levied and imposed on the fair
market value of such nonmonetary consideration. Any
payment made by a person to rent, lease, or use any living
quarters or accommodations which are exempt from the tax
imposed under s. 212.03 shall likewise be exempt from any
tax imposed under this section."

Section 212.21(2), F.S., provides in part:

"(2) It is hereby declared to be the specific legislative
intent to tax each and every sale, admission, use, storage,
consumption, or rental levied and set forth in this
chapter, except as to such sale, admission, use, storage,
consumption, or rental as shall be specifically exempted
therefrom by this chapter subject to the conditions
appertaining to such exemption...."

Section 212.08(13), F.S., provides in part:

"(13) No transactions shall be exempt from the tax imposed
by this chapter except those expressly exempted herein...."

DEPARTMENT RESPONSE

As indicated in the above quoted sections of Chapter 212,

F.S., the construction of the sales and use tax law is to tax
specific sales and to provide specific exemptions from some of
those otherwise taxable transactions. In order for a taxpayer
to claim an exemption, he must clearly show he is entitled to
the exemption. The law is to be strictly construed against the
taxpayer in the application of exemptions.

Although oral leases are recognized as valid in Florida,
the statute is clear that for leases for longer than six months,
they must be in writing in order to be exempt from tax. This is
stressed by Attorney General Opinion 082-51 which states in part
that only those persons who enter into a bona fide written lease
for longer than six months would be exempt from the tax imposed
by Chapter 212, F.S., for the first six months.

Therefore, all rentals of the condominiums for periods less
than six months which are not supported by bona fide written
leases for longer than six months are subject to tax.

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 the conditions 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 the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

Richard S. Harrod
Technical Assistant

RSH/pb
Con. #8309