Which association charges for trade shows, tournaments, meetings, auctions, seminars, dinners, and publications were subject to Florida sales tax?

Subject

Rental of Real Property

Plain-English summary

The tax result depended on exactly what the association charged for and who paid tax earlier in the transaction. Trade-show admission and auction admission were taxable. A trade-show sponsor's prime lease was taxable, but qualifying booth subleases were exempt when the sponsor held the taxed prime lease or received an assignment of the lease rights; making a profit on the booth charges did not change that exemption.

Tournament fees were taxable when a golf or tennis facility was provided free. When the association instead paid the host club's taxable course, cart, and related charges and passed them to participants, the participant charge was not taxable even if it included an organizational markup.

Educational or networking meeting charges were not admissions unless they granted recreational-facility access or covered a taxable meal or cover charge. Educational seminar fees were exempt when no tangible personal property was sold with them. Monetary sponsorships did not create sales tax, while donors of taxable merchandise were responsible for tax on the donated property's acquisition cost.

For an annual dinner without an admission component, tax could be computed on the caterer or restaurant's charge rather than the association's higher member price. When the combined charge covered dinner plus a guest lecture or entertainment as a taxable admission, the total member admission was taxable and the association could buy the meals for resale. Retail sales of maps, directories, and publications were taxable on the stated assumptions.

What this means for you

This ruling is a transaction map, not a blanket exemption for associations. The decisive facts included whether a charge was an admission, a service, a meal, a retail sale, a prime lease, or a qualifying sublease, and whether tax had already been paid at the underlying facility or vendor level.

Common questions

Q: Were trade-show booth charges always taxable? No. Qualifying subleases were exempt when a taxable prime lease existed or the prime lessee assigned its rights. The donated-space accounting described in the ruling could change which agreement was treated as the prime lease.

Q: Were tournament participant fees taxable? They were taxable when the facility was free, but not when the association paid the club's taxable charge and passed the cost to participants under the stated facts.

Q: Were ordinary educational or networking meetings taxable admissions? No, unless the charge also granted access to recreational facilities or covered another taxable component.

Q: Were monetary sponsorships taxable? No. Donated taxable merchandise raised a separate use-tax obligation for the donor.

Q: Were maps, directories, and publications taxable? Yes, as retail sales of tangible personal property on the ruling's assumptions.

Citations and references

• Fla. Stat. §§ 212.02(1) and 212.04(1)(a) — admissions
• Fla. Stat. § 212.031(5) — trade-show prime leases and subleases
• Fla. Stat. § 212.05 — retail sales of tangible personal property
• Fla. Stat. § 212.08(7)(v) — service transactions with inconsequential sales
• Fla. Admin. Code rr. 12A-1.005, 12A-1.011, and 12A-1.077 — admissions, meals, and donated property
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-051

Original ruling text

Jul 27, 1993

RE: TAA 93A-051
Sales Tax; Rental of Real Property
ss. 212.02(1), 212.031(5), 212.04(1)(a), 212.05,
212.08(7)(v), F.S.
Rules 12A-1.005, 12A-1.011, 12A-1.077, F.A.C.

Dear:

This is in response to your request dated April 22, 1993,
for the issuance of a Technical Assistance Advisement on various
transactions conducted by members of the XXX. It is your desire
for this advisement to be binding not only upon the association
but also upon the 143 members who are referenced in your
request. As presented in Rule 12-11.003(1)(a), F.A.C., written
requests for technical assistance advisements must disclose the
taxpayer and his identifying number. Rule 12-11.003(2)(a),
F.A.C., additionally provides that names, addresses, and
taxpayer identifying numbers of all interested parties must be
contained in the request. However, the cite does state that the
term "all interested parties" is not to be construed as
requiring a list of all members of an association should the
association request the advisement. Therefore, this advisement
is being issued to the association referenced above.

Your request provides in part:

"... The common thread running through each of these
questions is a determination of whether the XXX [hereinafter
"Organization"] needs to collect sales tax when charges are made
for attendance at functions....

"... The following is a list of the types of events which
`organizations' hold. After listing these a brief explanation
is provided with regard to the procedures for putting on each
function. Please respond to each function within the parameters
set forth in the explanation and/or [explanation(s)] laid out in
the attached materials.

"1. Trade Shows/ Display Space

5. Auction

6. Golf and/or Tennis Tournament 6. Educational Seminars

7. Membership Meeting Socials

8. Festivals

9. Annual or Special

Event Dinners

8. Publications

"Item 1. Booth or table space is sold to local businesses
to display their services or products. These businesses do not
sell their services or products at the `show'. This is the only
opportunity for others to become familiar with the businesses,
services or products. Persons wishing to enter the trade
show/exhibit hall are charged admission for the purposes of
viewing the goods and services.

"A. Is sales tax collectable on the admission charged to
those who wish to view the goods and services?"

In accordance with s. 212.04(1), F.S., tax is due on
charges for admitting persons to the exhibition.

"B. Must sales tax be collected from the business which
buys booth or table space if the space for the show is donated
to the `organization'?"

As presented in the letter of technical advice issued to
you on February 10, 1993, s. 212.031(5), F.S., provides:

"When space is subleased to a convention or industry trade
show in a convention hall, exhibition hall, or auditorium,
whether publicly or privately owned, the sponsor who holds
the prime lease is subject to tax on the prime lease and
the sublease is exempt."

Therefore, should a sponsor pay for the use of the
facility, then the amount paid by the sponsor for the use of the
facility is subject to sales tax. The sponsor's sublease of
booth space to exhibitors would be exempt from tax in accordance
with the above cite.

As stated in the letter of technical advice issued to you

on March 24, 1993, the sponsor holding the prime lease for the
trade show must pay tax. Should the publicly or privately owned
hall or auditorium donate the space free of charge to
Organization, then the sublease of the space by Organization to
the exhibitors remains exempt. This response assumes that the
hall or auditorium had accrued use tax on the cost expensed for
the donation.

Should the convention hall, exhibition hall, or auditorium
donate the space free of charge to Organization and not expense
the cost of the donation on its books and records and not accrue
use tax on the donation, then Organization must collect sales
tax on the consideration it receives from the businesses renting
the booths or tables, as the agreement between Organization and
the businesses is considered the prime lease. In this instance
considering the information you have provided it is understood
that there would be no lease executed between the hall or
auditorium and Organization.

"C. Must sales tax be collected on a rental of booth or
table space if the sponsoring Organization' pays to rent an exhibit hall where the show is held when: "1. The rent theorganization' charges only covers the
Organization's' costs? "2. The rent theOrganization' charges allows the
`Organization' to make money in excess of its costs?"
Item 1. C.1. and 2.: The sales tax exemption afforded in s.
212.031(5), F.S., specifically exempts the subleasing of space
to a convention or industry trade show from tax. The statute
does not mandate that the taxable prime lease be greater or less
than the consideration received for the subleases. Therefore,
provided Organization pays tax on its prime lease of the
convention hall, exhibition hall, or auditorium, the subleases
to exhibitors are exempt from tax. It is immaterial whether or
not Organization breaks even or recognizes a profit from its
subleases.

"D. Does the response to C.1. or C.2. change if an entity
other than the Organization' pays to rent the exhibit space but theOrganization' still receives the proceeds
from the rental of table or booth space? If so, what is

the `Organization's' sales tax collection obligation?"

During our telephone conversation on Friday, June 25, 1993,
you restated this question as follows:

"Assume an entity other than Organization leases the hall
or auditorium where the trade show is to be held. This entity
pays the applicable tax on the lease. This entity then allows
Organization to sublease the booth space to the exhibitors and
retain 100% of the proceeds from these subleases. Are
Organization's subleases to the exhibitors exempt from tax?"

Assuming that the entity which has entered into the prime
lease with the hall or auditorium assigns its rights to the hall
or auditorium to Organization, then Organization's subleases to
the exhibitors are exempt from tax.

"E. Are those persons who pay for the rental of the exhibit
hall (business member(s) of the Organization', or theOrganization') required to pay sales tax to the renter of the
exhibit space?"

Clarification was also sought during our telephone
conversation on Friday, June 25, 1993, for this question.
Simply stated, you desire to know whether or not Organization is
required to pay sales tax should it enter into a prime lease
agreement with the hall or auditorium where the trade show is to
be held. Organization will sublease booth space to the show's
exhibitors. In accordance with s. 212.031(5), F.S., this
question is answered in the affirmative.

"Item 2. Organization' members participate in aOrganization' sponsored golf or tennis tournament and are
charged for the privilege of playing in the tournament. The
payment for this privilege is made payable to the
`Organization'.

"A. Must the Organization' collect admission on the price of the tournament if the golf or tennis facility provides the use of the facilities free of charge to theOrganization'?"

This response assumes that the tournaments described herein
are similar to those discussed in our meetings (i.e., there is
no taxable admission charge to spectators). Section
212.04(1)(a), F.S., provides that "... every person is
exercising a taxable privilege who sells or receives anything by
way of admissions." The term "admissions" as defined in s.
212.02(1), F.S., includes participation fees, entrance fees, or
other receipts of anything of value.

Additionally, Rule 12A-1.005(4)(k), F.A.C., provides that
when no taxable admission charge is made to spectators,
participation or entrance fees are taxable unless, as described
in subparagraph (3)(g)1., the sponsoring organization qualifies
under s. 501(c)(3) of the United States Internal Revenue Code.
Organization addressed herein does not meet this qualification.
Therefore, should a golf or tennis facility allow Organization
to use its golf course, golf carts, and so forth in the conduct
of a tournament free of charge the participation fees paid to
Organization to participate in the tournament are subject to
sales tax.

"B. Must the Organization' collect sales tax on the price of participation if theOrganization' has had to rent the
facility?"

As clarified during our telephone conversation this
question pertains to Rule 12A-1.005(4)(k)2., F.A.C. You desire
to know the proper tax treatment assuming Organization pays the
host club for the use of its golf course, golf carts, and so
forth. Organization will pass these charges along to the
tournament's participants. The cited rule provides:

"2. EXAMPLE: A sponsoring golf association enrolls
participants to participate in a tournament for a fee of
$100.00 with $20.00 of the fee attributable to
organizational services provided by the sponsor and $80.00
attributable to the club's charges for an unlimited number
of rounds and the use of a golf cart, with the excess being
used to purchase gifts, gift certificates, and trophies to
be given to the winners. No tax is due on the $100.00 fee
paid by the participant to the sponsoring organization.

The $80.00 entry fee paid by the sponsoring organization to
the club is taxable, as are gifts, trophies, food,
beverages, and other promotional items purchased by the
association from the club. If, instead of the entry fee
covering the greens fees, cart rentals, and meal, there is
a separate charge made for each, such charges are also
taxable. When participants are given gift certificates to
be redeemed for merchandise from the club's pro shop, the
club is deemed to be selling the merchandise and shall
collect tax from the gift certificate holders at the time
the holder redeems the certificate for merchandise."

As presented above, the entry fee paid by Organization to
the club is subject to sales tax. The charge made by
Organization to the participants is not subject to sales tax.
"C. Does it make a difference whether the `Organization'
expects to break even or expects to make a profit?"

As provided in the above cited example the association
added a charge for its organizational services to the charge it
passed on to its members participating in the tournament. The
entire charge passed on was exempt from sales tax even though it
exceeded the taxable admission paid by the association to the
hosting club. Therefore, it is immaterial whether Organization
passes on the same amount it has paid to the hosting club to the
tournament's participants or whether the amount passed on to the
participants includes an additional fee imposed by Organization.

"Item 3. The members attend a regularly scheduled monthly
meeting, such as Business After Hours, and are charged a fee to
attend. The purpose may be social, educational, or strictly for
the purposes of networking.

"A. Must the `Organization' collect sales tax on the cost
of admission and does this vary depending on the nature of the
regularly scheduled meeting?"

As stated in one of our earlier meetings, these funds may
be used by Organization to purchase food and beverages to be
served at the meeting. Additionally, these funds may assist
Organization in recouping any costs it may have encountered in

leasing a facility in which to conduct the meeting.

Charges made by Organization to individuals attending its
monthly meetings for educational or networking purposes are not
considered as an admission. Thus, these charges would not be
subject to tax. However, this response assumes that should the
monthly meeting be held in a facility which has recreational
facilities (i.e., country club or physical fitness facility)
Organization is not granted the right to use the recreational
facilities. Should the charge made by Organization to those
attending the meeting grant access to the recreational
facilities then the charge is a taxable admission.

Should Organization conduct its meeting at a restaurant or
nightclub which charges a cover charge then please be advised
that pursuant to Rule 12A-1.011(14), F.A.C., these charges are
taxable. For example, should the restaurant or nightclub impose
a $5 charge to enter its facility and Organization pays for
those in attendance, tax is due on the entire amount charged to
Organization. Should Organization then charge each person
attending the meeting the $5 there would be no additional tax
due. This is in accordance with Rule 12A-1.005(6)(b), F.A.C,
which provides that if the purchaser of an admission resells an
admission for the same amount or less no tax is to be collected.
Please remember that there is no tax exempt sale for resale of
an admission.

"B. If the function is held at the business of a[n]
`Organization' member and the member pays the cost of all food
and beverage served must sales tax be collected on the admission
charge?"

This response assumes that the fee charged by Organization
to those attending the meeting does not qualify as a charge for
the sale of a meal. If the term "admissions" as used in your
question implies that meals are to be sold by Organization, then
the charge is subject to tax in accordance with Rule
12A-1.011(25), F.A.C.

As stated in the response to Item 3. A., charges to attend
Organization's meetings which are for educational or networking

purposes are exempt from sales tax. The fact that Organization
provides food or beverages to those attending the meeting will
not subject the charge to tax (assuming Organization is not
charging for a meal).

"C. If one or more businesses pay to sponsor the event and
the payment thereof is used to pay the cost of all food and
beverages provided, must sales tax be collected on the admission
charge?"

Please refer to the response given in Item 3. B.

"If the answers to A, B, or C vary based on the nature of
the event (social, etc.) please indicate the differences."

Please refer to the responses given in Items 3. A. and 3.
B.

[The questions posed in your request jumped from Item 3 to Item
5.]

"Item 5. The Organization' sponsors an auction and will receive the benefit of all proceeds from the items sold at the auction. All items which are auctioned will be donated at no charge to theOrganization'. Those who wish to participate in
the auction or to attend the auction will be charged an entrance
fee. One or more businesses may pay a fee to be a sponsor of the
auction.

"A. Must the `Organization' collect sales tax on the price
charged for entrance to the event?"

The admission charged for entering the auction is taxable
pursuant to Section 212.02(1), F.S., which provides in pertinent
part:

"The term `admissions' means and includes the net sum of
money after deduction of any federal taxes for admitting a
person or vehicle or persons to... any place where charge
is made by way of sale of tickets, gate charges, seat
charges..."

"B. Must the `Organization' collect sales tax from those
businesses that sponsor the event?"

During our telephone conversation it was requested that
this response address the proper tax treatment when businesses
donate funds to Organization to be used in the conduct of the
auction as well as the proper tax treatment should businesses
donate tangible personal property to be sold at the auction.

There is no sales tax impact to either the donor or
Organization should a business make a monetary contribution to
Organization for use in the conduct of the auction.

Should anyone donate taxable merchandise to be sold at the
auction then Rule 12A-1.077(1), F.A.C., is governing. This
subsection provides that the person donating the taxable
property is responsible for the payment of tax on the
acquisition cost of the donated property. Should the business
remove the item from a tax free inventory account, then the
business must accrue use tax on its sales and use tax return
when the item is removed from the inventory account.
Organization is not to collect any tax from the business making
the donation.

"Item 6. The `Organization' sponsors a seminar and invites
a person or persons to educate or train its members on some
aspect of managing or operating a business. Those who wish to
attend the seminar must pay a fee to attend. One or more
businesses may pay the cost of putting on the seminar and/or to
pay the cost of bringing the speaker.

"A. Must the `Organization' collect tax on the price
charged to those who attend the seminar?"

Pursuant to section 212.08(7)(v), F.S., professional,
insurance, or personal service transactions that involve sales
as inconsequential elements for which no separate charges are
made are exempt from sales tax. Therefore, assuming there is no
sale of tangible personal property in conjunction with the
charge made by Organization to individuals attending the

seminar, sales tax is not due on the charges made to attend the
educational seminar.

"B. Must the Organization' collect tax from those who pay to sponsor the event if the sponsors pay the money directly to theOrganization'?"

As stated throughout this response, monetary donations
subject neither the donor nor the donee to sales tax liability.

"Item 7. The `Organization's' annual dinner, or such other
special event as it may choose to hold throughout the year, and
available to those members who wish to pay the cost of
attendance. The event may include an entertainment or a dinner
speaker.

"A. Must the `Organization' collect sales tax on the cost
of the tickets purchased to attend the event?"

Dinner:

During our meetings, this writer was informed that
Organization will be charging those attending the annual dinner
an amount in excess of the charge made to Organization by the
caterer or restaurant. As provided in Rule 12A-1.011(23)(b),
F.A.C., should Organization charge those attending the dinner an
amount greater than it paid to the caterer or restaurant then
tax may be computed on the charge made by the caterer or
restaurant to Organization. Tax would not be due on the
inflated amount Organization charged those attending the dinner.

"B. Will the response to A vary depending on whether or not
there is a guest speaker? If so, how?"

In this question Organization purchases meals for x number
of people from either the restaurant or caterer preparing the
dinner. Organization then charges its members a fee to attend
the dinner as well as to be entertained by a guest lecturer.
Sales tax is due on the total admission charged to the members
attending the dinner and the guest lecture. Organization should
extend a resale certificate to the restaurant or caterer in

order to exempt its purchase of the meals from tax.

"C. Will the response to A vary depending on whether or not
entertainment is provided? If so, how?"

Should the charge made by Organization to attend its annual
dinner represent a taxable admission as that term is defined in
s. 212.02(1), F.S., then please refer to the response issued to
Item 7. B.

"D. If one or more businesses pay to sponsor the event,
must the Organization' collect sales tax from a sponsoring business when those businesses make the payment directly to theOrganization'."

Should one or more businesses give Organization the funds
necessary to purchase the taxable meals in Item 7. A.
Organization is still responsible for paying sales tax to the
caterer or restaurant. However, there is no additional tax due
on the funds donated by the businesses to Organization.

[The following additional questions were not preceded by an
Item number.]

"If the Organization' sells directly to its members, maps, membership directories, or any publications, is theOrganization' required to collect sales tax on the sale of each
of these items?

"A. Maps?
"B. Membership Directories?
"C. Publications?"

As presented in Section 212.05, F.S., sales tax is due on
the retail sale of tangible personal property in this state.
This response assumes that the membership directories sold by
Organization to its members are not construed as being
information of a personal or individual nature.

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,

Betsy Turner
Technical Assistant
Statutory Compliance Section

BT/
Control # 8419