Could a Florida amusement-machine owner assume the location owner's tax and certificate duties by written agreement while remaining the machine lessor?

Plain-English summary

The amusement-machine owner could assume the location owner's machine-receipt tax and certificate duties by written agreement without losing its status as the machine lessor. The proposed agreement identified the arrangement as a lease of the machines and assigned the amusement-machine certificate and receipt-tax responsibilities to the owner.

The Department said an agreement should state who remits tax on machine receipts, who purchases the certificate as operator, and whether the arrangement is a lease of machines or real property. If the location owner signed the proposed agreement, it would be relieved of the assigned duties.

The machine owner still had separate obligations. It owed tax on the machine rentals to the location owner, and the tax on machine receipts had to be based on the full amount removed from the machine—not only the owner's 60% share. The rental tax and receipt tax had to be stated separately on the collection receipt.

What this means for you

A written allocation of duties can change who handles the amusement-machine tax and certificate, but it must clearly describe both the responsibilities and the underlying lease. It does not erase the separate tax on leasing the machines.

Common questions

Q: Could the machine owner take over the receipt-tax and certificate duties?
A: Yes, through the described written agreement.

Q: Did that make the machine owner something other than a lessor?
A: No. The agreement still designated the arrangement as a lease of machines.

Q: Was receipt tax calculated only on the owner's 60% share?
A: No. It was based on the full amount taken from the machine.

Citations and references

• Ch. 95-416, § 3, Laws of Florida — 1995 amendment
• Fla. Stat. § 212.05(1)(j)2.c. — amusement-machine tax responsibility
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-006

Original ruling text

Jan 17, 1996

Re: Technical Assistance Advisement 96A-006
Amusement Machines
Ch. 95-416, L.O.F. and s. 212.05(1)(j), F.S.

Dear :

This is in response to your request for a Technical Assistance
Advisement (TAA) dated August 23, 1995, regarding the
application of the provisions of section 3, Ch. 95-416, L.O.F.,
which amended s. 212.05(1)(j), F.S. The following facts were
presented in your request.

Facts Presented

You wish to assume the responsibilities of remitting the tax on
the machine receipts for the location owner, as well as assume
the responsibility of purchasing the Amusement Machine
Certificate. As you state, pursuant to the referenced Laws of
Florida, the location owner has those responsibilities unless
otherwise provided for in a written agreement between the
machine owner and the location owner. You wish to verify that
you can assume those responsibilities with a written agreement
without relinquishing your status as "lessor" of the amusement
machines. You have also provided a copy of a proposed written
agreement and have asked for an opinion regarding whether the
agreement would satisfy the requirements of s. 212.05(1)(j) as
amended by Ch. 95-416, L.O.F.

Relevant Authority

Effective July 1, 1995, section 3 of Ch. 95-416, L.O.F., has
amended s. 212.05(1)(j)2.c., F.S., to read:

"If the proprietor of the business where the machine is
located does not own the machine, he shall be deemed to be
the lessee and operator of the machine and is responsible

for the payment of the tax on sales, unless such
responsibility is otherwise provided for in a written
agreement between him and the machine owner." (Emphasis
supplied)

Advisement

In accordance with the recent amendment to s. 212.05(1)(j),
F.S., the location owner is deemed to be a lessee and is
responsible for remitting the tax on the machine receipts and is
also responsible for purchasing the Amusement Machine
Certificate. However, as emphasized above, the location owner
may have a written agreement with a machine owner that otherwise
provides for these responsibilities.

It is the Department's position that when the parties involved
choose to have a written agreement, it should contain the
following items:

• who is responsible for remitting the tax on the receipts;
• who is responsible for purchasing the certificate
  (operator); and,
• whether the arrangement is a lease of tangible property
  (machines) or a lease of real property

The proposed written agreement you have provided for review
clearly indicates the arrangement to be a lease of the machines,
and it also indicates that you (lessor/machine owner) are
assuming the responsibilities of purchasing the certificate and
remitting the tax on the machine receipts.

Therefore, the proposed written agreement meets the Department's
suggested requirements. If the location owner agrees to enter
into the agreement with your business, the location owner will
be relieved of the responsibilities of remitting the tax on the
receipts and the responsibility of purchasing the certificate.
At the same time, you will retain your status as "lessor" of the
machines, since the agreement designates the arrangement as one
of a lease of machines.

As lessor/machine owner you are also responsible for remitting

the tax collected to the Department of Revenue on the lease of
the machines to the location owner. Both the tax on the machine
receipts, and the rental tax on the machines should be
separately stated on the collection receipt you provide to the
location owner. The tax on the machine receipts should be based
on the amount taken from the machine, and not just on your 60%
of the split.

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

Sincerely,

Edith Sapp
Tax Law Specialist
Tax Policy and Dispute Resolution

ES/
CTRL# 23036