Were the nonprofit ballet organization's performance admissions exempt from Florida sales tax?

Subject

Admissions Exemption

Plain-English summary

The ballet organization's admission charges were exempt from Florida sales tax. The Department concluded that the organization qualified as a nonprofit sponsoring organization under the cited statute and rule.

The ruling relied on the organization's federal section 501(c)(3) exemption letter, insurance certificate, submitted facts, and university agreement. Those materials led the Department to find that the organization met the sponsorship criteria in Rule 12A-1.005(3)(g)-(h).

What this means for you

Nonprofit status alone was not the whole analysis. The cited rule also looked to the organization's role in planning and conducting the event, responsibility for safety and success, entitlement to proceeds, and responsibility for costs and losses.

Common questions

Did the Department tax the performance admissions? No. It found the admission charges exempt on the stated facts.

Was section 501(c)(3) status relevant? Yes. The statute and rule required qualifying nonprofit status, and the ruling relied on the organization's IRS exemption letter.

Does this exempt every nonprofit event? No. The ruling was based on this organization's facts and its satisfaction of the sponsorship criteria.

Citations and references

• Fla. Stat. §§ 212.04(2)(a)2.a. and 213.22
• Fla. Admin. Code r. 12A-1.005(3)(g)-(h)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 94A-053

Original ruling text

Oct 03, 1994

Re: TAA 94A-053
Sales Tax; Admissions Exemption
Section 212.04, Florida Statutes
Rule 12A-1.005, Florida Administrative Code

Dear :

This is in response to your letter of June 20, 1994,
requesting a Technical Assistance Advisement concerning the
exempt status of XXX (hereafter "Organization") from sales tax
on admission charges. A Letter of Technical Advice was provided
on June 3, 1994, regarding the same issue.

Your letter of May 15, 1994, provides the following
information:

"[Organization] is a 501(c)(3) not-for-profit organization
as can be seen from the enclosed materials. The
organization is incorporated in the State of Florida under
document XXX as can be seen from enclosed materials.

"The organization presents between four and six productions
annually that service adults and children. Surveys are
taken several times annually to assist in planning and
determining community needs.

"[Organization] is responsible for the safety and success
of the event. The organization carries over $1,000,000 in
general liability insurance. The organization is entitled
to gross proceeds from events and responsibility for
payment of costs of events.

"The mission of the organization is to maintain a
professional ballet company in XXX; the purpose of which is
to engage, entertain and educate through performances,
educational programs and touring.

"I believe [Organization] meets the sponsoring organization
requirements for exemption of admissions sales tax as set
forth in the guide lines and would appreciate documentation
from the Department of Revenue so stating."

Enclosed with your letter of June 20, 1994, you provided a
copy of your certificate of insurance and a representative copy
of your agreements with the XXX.

Relevant Authority

Section 212.04(2)(a)2.a., F.S., states:
"2.a. No tax shall be levied on dues, membership fees, and
admission charges imposed by not-for-profit sponsoring
organizations. To receive this exemption, the sponsoring
organization must qualify as a not-for-profit entity under
the provisions of s. 501(c)(3) of the United States
Internal Revenue Code of 1954, as amended."

Rule 12A-1.005(3)(g),(h), F.A.C., provides:

"(g)1. Through June 30, 1987, no tax shall be levied on
dues, membership fees, and admission charges imposed by
not-for-profit sponsoring organizations or community or
recreational facilities. To receive this exemption, the
organization making any such charges must qualify as a
not-for-profit entity under the provisions of s. 501(c)(3)
of the United States Internal Revenue Code of 1986, as
amended.

"2. Effective July 1, 1987, this exemption was limited to
dues, membership fees, and admission charges imposed by
not-for-profit religious sponsoring organizations.

"3. Effective January 1, 1988, this exemption was restored
to any sponsoring organization which qualifies under s.
501(c)(3) of the United States Internal Revenue Code of
1986, as amended.

"(h) For the purposes of this rule, sponsorship of an event
is determined by using the following criteria:

"1. Active participation by the entity in the planning and
conduct of the event;

"2. Assumption by it of responsibility for the safety and
success of the event, such that it will be subject to a
suit for damages for alleged negligence in its conduct;

"3. Entitlement by it to the gross proceeds from the event
and to the net proceeds after payment of its costs; and

"4. Responsibility by it for payment of costs of the event
and for bearing any net loss if the costs exceed gross
proceeds."

Response

The above stated rule provides the criteria used in
determining sponsorship of an event. Based on the Internal
Revenue's letter of exemption as a 501(c)(3) organization, the
copy of certificate of insurance, the information provided in
your letters, and the provisions contained in your agreement
with the University, the Department concurs that Organization
meets the criteria set forth under Rule 12A-1.005(g),(h),
F.A.C., as a not-for-profit sponsoring organization. Therefore,
the admission charges to the performances of Organization are
exempt.

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,

Bonnie Everton
Technical Assistant

/e
Cont. #16257