What Florida sales taxes did a festival host owe on admission charges and space rented to food, drink, and merchandise vendors?

Subject

Festivals

Plain-English summary

The festival host had to collect Florida sales tax on admission charges over nine cents and on all rent or license fees charged for vendor space. Vendor rent included a flat amount, a percentage of sales, or a combination when that percentage was consideration for the space.

If the owner donated the site directly to the host, no tax arose on that free use because there was no consideration. The same was true when another entity first leased the site, paid the applicable tax, and then donated its use to the host. In either case, the host still taxed its vendor subleases.

If the host paid tax on its own lease, it also collected tax on vendor subrentals but could claim a reasonable pro rata credit for tax paid on the portion subleased.

What this means for you

Free use of the overall festival site did not make vendor-space charges tax-free. The host's admission and subleasing activities were analyzed separately.

Common questions

Q: Was tax due when the site owner donated the property to the host? No, because no consideration was exchanged.

Q: Did the host tax vendor-space fees? Yes, including percentage-of-sales rent.

Q: Could the host credit tax paid on its own lease? Yes, on a reasonable pro rata basis for the space it subleased.

Citations and references

• Fla. Stat. § 212.031(1)(a) — renting or licensing real property
• Fla. Stat. § 212.04(1)(a) — taxable admissions
• Fla. Admin. Code r. 12A-1.070(7)(a), (8) — subrentals and tax credit
• Fla. Admin. Code r. 12A-1.005(5)(a) — admissions
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-064

Original ruling text

Sep 13, 1993

RE: TAA 93A-064
Sales Tax
Festivals conducted by a XXXXX
Sections 212.031(1)(a), 212.04(1)(a), F.S.
Rules 12A-1.070, 12A-1.005, F.A.C.

Dear :

This is in response to your letter dated August 11, 1993,
which requests the issuance of a Technical Assistance Advisement
on the above referenced issue on behalf of your client, the
XXXXX [hereinafter "Association"]. The questions posed in your
request refer to future events which may be conducted by a host
XXXXX [hereinafter "Host"].

Your letter provides in part:

"... I'm now requesting that an addendum to TAA 93A-051 be
prepared to cover festivals.

"A festival is to be considered an event open to the
general public. Admission is charged. Space is sold to food,
drink, and other vendors who sell their products. The [Host]
for the festival may take a percentage of the vendor sales
revenue. Entertainment may be provided. One or more businesses
may pay extra to sponsor the event. Admission generally covers
the cost of entertainment but not the purchase of food, drink or
other items from the vendors who have been charged to lease
space. A vendor's lease may be an amount plus a percentage of
sales, strictly a percentage of sales, or strictly a flat fee.

"Please respond to the collection and remittance of sales
tax responsibilities falling on the [Host] under each of the
following scenarios:

"A. The site for the festival is provided directly to the

[Host] without charge by the owner of the site.

"B. The site for the festival is provided, indirectly, free
of charge to the [Host] by some other entity which pays to the
owner a lease price.

"C. The [Host] which sponsors the festival pays the lease
cost...."

DETERMINATION

Question A:
s. 212.031(1)(a), F.S., provides:

"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 unless such
property is:
"1. Assessed as agricultural property under s. 193.461..."

When the property is donated to the Host free of charge
(i.e., no consideration is exchanged for the use of the land)
there is no basis on which to compute any tax due. Since Host
will sublet space to various vendors selling their wares at the
festival the Host is required to be a registered dealer with
this department. The Host must collect and remit the applicable
sales tax due on the total rent or license fee charged to the
vendors (this would include the percentage of the vendors' sales
due to the Host as rental consideration).

Question B:

In this scenario another entity leases the property where
the festival is to be conducted. It is assumed that the
applicable sales tax due on the property's original lease has
been paid by this entity. The entity then donates the property
to the host of the festival. The Host will then sublet the
property to the various vendors attending the festival.

No tax is due when the entity donates the property to the

festival's Host since no consideration is given or exchanged for
the Host's use of the property. In accordance with s.
212.031(1)(a), F.S., when the host subleases space to the
vendors sales tax must be collected on the total rental
consideration received.

Question C:

Should the Host be subject to tax on its original lease of
the property and sublet a portion to the vendors, please be
advised that Rule 12A-1.070(7)(a), F.A.C., provides:

"Where a tenant or person occupying, using, or entitled to
use any real property which is subject to tax sublets or
assigns and collects rentals or license fees on a taxable
portion of the leased or licensed premises, such tenant or
other person shall be required to register as a dealer and
collect and remit the tax on all such sub-rentals or
assignments."

Rule 12A-1.070(8), F.A.C., further provides:

"When a tenant (lessee) or other person occupying, using,
or entitled to use any real property (licensee) sublets or
assigns some portion of the leased or licensed property, he
may take credit on a pro rata basis for the tax that he
paid to his landlord or other such person on the space that
he subleases or assigns. Proration shall be computed on
square footage or some other basis acceptable to the
Executive Director...."

In accordance with s. 212.04(1)(a), F.S., and as described
in paragraph (5)(a) of Rule 12A-1.005, F.A.C., the Host of the
festival is required to charge sales tax when an admission in
excess of 9 cents is charged to gain entrance to the festival.

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
BT/
Control # 10375