How did Florida tax multistate campground memberships sold by a Florida preserve?

Subject

Membership Resort Facilities

Plain-English summary

Memberships sold by the Florida preserve were taxable as transient rentals because they granted rights to overnight campground accommodations. Florida required tax on the full initial membership fee and later dues or maintenance fees without allocating part of the price to out-of-state resorts.

Purchaser residence and actual use did not change that result. For financed initial fees, the cash payment and face amount of the note were taxable when the down payment was received and the note executed; unstated interest or finance charges were also included. A Florida preserve's sale granting access only to out-of-state facilities was outside Florida sales tax.

What this means for you

The ruling tied the tax to the overnight-accommodation right and the preserve recognizing the sale. Multistate access did not permit proration of a Florida sale.

Common questions

Did a nonresident purchaser avoid Florida tax? No, when buying the taxable membership from the Florida preserve.

What about memberships purchased outside Florida that included Florida access? Their sale was governed by the law of the state where the recognizing preserve was located, though separate taxable Florida-facility charges remained subject to Florida tax.

Did applicable county taxes also apply? Yes, the ruling identified convention, surtax, tourist-impact, and tourist-development taxes where imposed.

Citations and references

• Fla. Stat. §§ 212.03 and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94A-011

Original ruling text

Jan 25, 1994

RE: TAA 94A-011
Sales Tax; Application of Sales Tax to Membership Resort
Facilities
Section 212.03, F.S.

Dear :

This is in response to your letter dated September 3, 1993,
which seeks the issuance of a Technical Assistance Advisement on
the above referenced issue. As presented in your letter, XXX
[hereinafter Dealer] operates a membership based campground
system. The following documentation was also submitted for
review: an eight page Membership Agreement/Retail Installment
Contract; a four page Membership Agreement/Retail Installment
Contract; and XXX [hereinafter Corporation] Disclosure
Statement.

Your request provides in part:

"... Members purchase a membership which allows them access
to campgrounds (preserve) in many, or all states, depending on
the terms of their contract. Examples of typical contracts have
been included. In general, the contract provides a lifetime
membership which grants to the member access to the resort and
the non-exclusive use of campsite accommodations and
recreational facilities for a specified price. The price
consists of an initial membership fee, plus periodic membership
dues or maintenance fees.

"The initial membership fee is paid in cash up front, or
more typically, with a cash down payment and the execution of a
promissory note, which finances the initial membership fee. The
member th[e]n pays annual membership dues.

"The park where a member joins is designated as their `home
park'. Their home park and state of residence are not
necessarily the same. In fact, currently only about 28% of the

members who pay dues to the Orlando preserve (the only park we
have in Florida) are Florida residen[ts]. The result is that
many members who pay dues
to Florida may not in fact even use the preserve...."

The eight page Membership Agreement/Retail Installment
Contract provides in pertinent part:

"2. WHAT YOU ARE PURCHASING. You are purchasing the right
to use the following preserves: (Check one)
"_ Unlimited Resort Membership. Your unlimited
membership entitles you to use all existing and future
preserves.
" Area Resort Membership. Your area membership
entitles you to use all existing and future preserves in Area
__ described on the map on page 5. You may also purchase at
any time the right to use all existing and future preserves in
the five other Areas described on the map on page 5 for an
additional $500 per Area. As of the date of this Contract, you
have purchased the right to use all existing and future
preserves in the following Areas (Check if applicable).

" Area 1 __ Area 2 __ Area 3 __ Area 4 __ Area 5 __ Area 6
__

"... 3. PRIVILEGES OF MEMBERSHIP. You and your guests are
entitled to use all recreational facilities at the preserves
where you have membership rights, subject to the following:

"The number, size, location, and nature of our preserves
and facilities, existing or intended, are subject to change by
us, but we will use our best efforts to continue operating
preserves in the same general areas now serving our membership.
We are continually engaged in developing new facilities and/or
improving existing facilities at our preserves...."

The third page of the above referenced agreement contains
"Most Often Asked Questions About Membership in `Dealer'". The
fifth question which concerns how often members may use the
preserves provides "There is no limit to the total number of
days you can use the preserves each year. However, because we

sell a recreational program rather than a residential program,
there are guidelines and rules which prohibit continuous or
permanent type usage. You may stay at one preserve up to 14
days at a time. If you stay at a preserve for more than 4
consecutive nights, you must wait 7 days before you can stay
again at any preserve. However, one time each year you may
request a vacation exemption which allows you 60 days of
continuous use of our preserves without the 7 day waiting period
(14 day maximum at one preserve still applies). To qualify for
the certificate you must be on `vacation', defined as any period
from 5 to 60 days in which you devote your time primarily to
recreational activities."

The nineteenth question, which appears on page four,
provides:

"Are there any charges other than initiation fees and dues?
"Yes, there is a charge for use of rental units, guest use
of campsites and rental units, coin-operated washers and dryers,
coin-operated vending machines, coin-operated game machines,
trailer storage, firewood, or use of some sports equipment,
miniature golf, horse and canoe rentals, and other miscellaneous
items. There are no additional charges for water, power, or use
of recreation centers, swimming pools, saunas, tennis courts,
dump stations, use of campsites with your own RV, and other
basic facilities. You will receive a monthly copy of the
publication XXX at no charge."

As shown on Dealer's map of its network and preserves (page
five of the agreement), only one preserve is located in Florida.
In fact, the XXX preserve is the only preserve located in Area 4
which is comprised of XXX.

The second contract submitted for review (four pages)
provides in pertinent part:

"2. WHAT YOU ARE PURCHASING. You are purchasing the
membership indicated below (check one and initial):

"_____ RANGE Membership (includes One Region indicated
below)

"_____ SUMMIT Membership (includes all Five Regions)

"Your membership includes the following Region(s):

"Applicable

Not Applicable

"Northwest Region

[ ]

[ ]

"Northeast Region

[ ]

[ ]

"Western Region

[ ]

[ ]

"Southeast Region

[ ]

[ ]

"Southwest Region

[ ]

[ ]

"The preserves that are currently available in each region for
use by members are described on the map and facilities charts in
the attached disclosure statement.

"You may convert a Range Membership to a Summit Membership at
any time upon payment to us of the difference between the price
of your original membership and the price of the Summit
Membership at the time of your conversion. When you convert:
(a) your annual membership dues will increase to the rate of
dues charged by us on new Summit Memberships at the time of your
conversion, and (b) the amount paid for your original membership
will be applied against the price of the Summit Membership. We
will finance your conversion to a Summit Membership provided
that the minimum down payment and finance charge on any
installment purchase are acceptable to us.

"3. TERMS OF MEMBERSHIP. As a member in good standing, you
are entitled to use all preserves that are designated by
[Dealer] and [Corporation] as available for use by members in
the Region(s) included in your membership, subject to the
following:

"You must use the preserves in accordance with this Contract and
the Member Rules. We have Member Rules regarding, among other
things: (a) advance notification or first-come, first-choice
space arrangements; (b) length of stay; (c) frequency of use;
(d) charges for benefits or services, including rental units,
pet fees, food services, goods purchased, gasoline, and other
services made available by us from time to time; (e) number of

guests allowed and guest fees; (f) length of season for use of
the preserves...."

"The location of, and facilities and amenities at, all of
[Dealer's] and [Corporation's] preserves are described in the
attached disclosure statement and are subject to change by
[Dealer] and [Corporation]. Preserves and facilities may be
added to or subtracted from those which existed at the time of
execution of this Contract. [Dealer] and [Corporation] are
under no obligation to increase the number of or improve
existing preserves. [Dealer] and [Corporation] reserve the
right to sell memberships with rights and privileges different
from your membership.

"Your membership constitutes merely a contractual license to use
the facilities provided by [Dealer] and [Corporation] from time
to time at the preserves where you have membership rights....

"You may not possess, hold, or own more than one membership in
either [Dealer] or [Corporation], and if you acquire more than
one membership under any circumstances, we will terminate all
memberships held by you in excess of one. Your membership
cannot be divided and, if you transfer it, or if it is
transferred by operation of law, as in the event of divorce,
inheritance, descent, or attachment, all membership privileges
must be transferred together. You may not transfer membership
rights in particular regions or preserves separately...."

The "Disclosure Statement" accompanying the above Agreement
provides in part:

"2. What is the relationship between [Dealer] and
[Corporation]?
"[Dealer] and [Corporation] are separate corporations which
each operate a system of membership-based campground resorts
referred to as `preserves'.... [Dealer] and [Corporation] have
integrated their separate campground systems through a joint
marketing program. The agreement between [Dealer] and
[Corporation] for this program, which is subject to change,
provides that persons purchasing memberships at [Dealer] or
[Corporation] preserves will receive membership rights to use

both [Dealer's] and [Corporation] preserves in the Region(s)
included in his or her membership.

"5. What is [Dealer's] and [Corporation's] experience in
the membership camping resort industry?
"[Dealer] began selling memberships in 1972, and now owns
or operates 36 membership campgrounds in 14 states and British
Columbia, Canada, serving more than 100,000 member families.

"[Corporation] was founded as an outdoor resort development
company in 1967, and now owns or operates 24 membership
campgrounds in 12 states serving more than 80,000 member
families and eight resort communities in 7 states serving more
than 40,000 resort property owners...."

The preserve map contained on page four of the Disclosure
Statement provides that the Southeast Region is composed of
preserves located in North Carolina (1), South Carolina (1),
Tennessee (2), Florida (1), Mississippi (1), and Texas (8).

As discussed during our telephone conversation on Tuesday,
October 5, 1993, Dealer as a member of the Florida Membership
Resort Association was issued TAA 91A-009 on March 22, 1991.
Please be advised that the Department maintains its position as
stated in the above referenced Technical Assistance Advisement.
The contracts submitted for review grant a right to use
overnight accommodations, and as such, are taxable as transient
rentals under s. 212.03, Florida Statutes.

Regarding sales of memberships by Dealer's Florida
preserve, Dealer is required to collect and remit tax on the
total of the initial membership fee, and on subsequent
membership dues or maintenance fees, without proration,
regardless of the fact that members may also access resorts
located in other states. It is immaterial whether the person
purchasing the membership from the Florida preserve resides in
this state or not. As to the initial membership fee, the cash
payment and the face value of the note, as well as interest or
finance charges if not separately stated, are taxable at the
time of receipt of the down payment and the execution of the
note. The tax is due and payable on periodic membership dues or

maintenance fees when they are billed by the resort.

The taxability of membership agreements purchased outside
this state which grant access to facilities located in Florida
(i.e., member purchases membership in "Southeast Region") are
governed by the tax laws of the state in which the preserve
recognizing the sale is located. However, any taxable charges
made by the Florida preserve to persons patronizing its facility
are subject to Florida tax. Taxable charges, include, but are
not limited to, charges made for the use of cabins, Rvs, and so
forth.

As you know, preserves which are located in a county
levying a local tax (convention development, discretionary sales
surtax, tourist impact, or tourist development tax) must collect
the local tax(es) on the preserve's sales of membership fees,
membership dues, and maintenance fees.

Should an arrangement exist which allows the Florida
preserve to sell memberships granting access to resorts or
campgrounds located in other "regions", without granting access
to facilities located in Florida, then the transaction (i.e.,
the sale of a membership to resorts located outside this state)
is not subject to this state's sales tax. The taxability of the
transaction will be governed by the tax laws of the state in
which the preserve recognizing the sale is located.

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 #10899