Could a condominium association treat cable television included in a transient room charge as a service bought for resale?

Plain-English summary

Florida found that the condominium association was not reselling cable television service to its transient guests.

The association paid tax when it bought cable service, included a $2.50 daily cable amount in the quoted room rate, and let a guest decline the service for a $2.50 reduction. But the invoice still showed only one charge for room accommodations. It did not separately bill or separately state tax on a second cable-service sale.

Because the invoice evidenced a single transient-rental transaction, the association was the consumer of the cable service. It could not give the cable provider a resale certificate. It had to pay the provider's cable-service tax and collect and remit tax on the total rental charged to the guest.

What this means for you

• Calling part of a room rate an optional cable charge did not establish a resale when the guest invoice showed only one rental charge.
• A resale certificate was unavailable because the association consumed the cable service in providing the accommodation.
• The transient-rental tax applied to the total rental shown on the invoice.

Common questions

Q: Did the guest's ability to reject cable service make it a separate sale?
A: No. The Department relied on what the invoice actually showed: one charge for accommodations.

Q: Could the association buy cable service tax free with a resale certificate?
A: No.

Q: What tax did the association collect from guests?
A: The tax on the total transient-accommodation rental.

Citations and references

• Fla. Stat. § 212.02(15)(b) — leases of accommodations as sales
• Fla. Stat. § 212.03(1) — tax on total transient-accommodation rental
• Fla. Stat. § 212.05(1)(e)1.b. — television system program services
• Fla. Stat. § 212.07(2) — collection and separate statement of tax
• Fla. Admin. Code rr. 12A-1.038, 12A-1.046(11)(b)1.b., 12A-1.086
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-026

Original ruling text

Apr 18, 1996

Re: Technical Assistance Advisement 96A-026
Resale of Cable Television Services
Sections 212.02(16)(b), 212.03(1), 212.05(1)(e)1., and
(1)(e)1.b., 212.07(2), F.S.
Rules 12A-1.038, 12A-1.046(11)(b)1.b., 12A-1.086, F.A.C.

Dear :

This is a response, styled a Technical Assistance Advisement, to
your undated letter received in the Department's offices on
September 27, 1995, in which you seek the Department's
determination of the appropriate manner of applying sales tax on
the provision of cable television service by XXXX (herein
Association), to condominium units which are rented by
Association, in behalf of the unit owners, as transient
accommodations in the instance when the cable television service
is initially purchased by Association from the cable television
provider. You state that the Association pays sales tax to the
cable television provider.

You state in paragraph 3. that the Association "... then resells
[the] cable television service to its transient guests. The
charge for such cable service is included in the quoted room
rate at $2.50 per day." In paragraph 6. you describe the
provision of this service as "... an additional luxury item..."
which is not "... necessary for the rental or occupancy of the
guest room." In paragraph 5. you state that "[s]hould any
transient guest choose not to purchase cable television
service... [the Association] will disconnect cable service in
the guest room for the duration of the guest's stay, and deduct
$2.50 per day from the total bill."

If the option to reject the service is not exercised, as you
explain in paragraph 7., the "[a]pplicable state sales tax on
the total amount of the bill, including the daily cost of cable
television, is charged to the guest." You state in the same

paragraph that the tax collected from the transient guests is
remitted to the Department by Association. You also, in
paragraph 9., explain that Association "... pays less sales tax
each month to its cable television service provider than it
collects from its customers."

You propose alternative methods of paying and collecting the
tax.

In paragraph 8. you opine that pursuant to Rule 12A-1.038,
F.A.C., a resale certificate could be extended by the
Association to the cable television provider.

In the same paragraph you alternatively suggest that the
provision in Rule 12A-1.046(11)(b)1.b., F.A.C., is applicable.
This rule provision, which relates to local telephone service,
reads in part that if a person "... pays less sales tax to the
telecommunication service provider than it collects from
customers, the [business] must remit the sales tax collected,
less the amount paid to the telecommunication service provider,
directly to the state. If the amount of taxes paid to the
telecommunication service provider is greater than the amount
collected from the customers, no additional sales tax will be
due to the state for the local service."

Department response

Sales tax was initially imposed on cable television service by
Section 4, Chapter 71-360, L.O.F., which taxed the provision of
"wired television service." Section 18, Chapter 90-132, L.O.F.,
effective July 1, 1990, provided for the substitution in s.
212.05(1)(e)1., F.S., of the present wording, "television system
program service" for the words "wired television." The
taxability of television system program services is currently
expressed in s. 212.05(1)(e)1.b., Florida Statutes. Thus, cable
television service is presently taxable, and has been taxable
since 1971.

Section 212.07(2), F.S., requires a dealer "... as far as
practicable, [to] add the amount of the tax imposed under this
chapter to the sale price, and the amount of the tax shall be

separately stated as Florida tax on any charge ticket, sales
slip, invoice, or other tangible evidence of sale." This
statute is interpreted in Rule 12A-1.086, Florida Administrative
Code.

Thus, on the invoice or billing issued by Association to a
lessee, in which the lessee did not exercise the option to
refuse the cable television service, the charge for the
transient accommodations is in one amount, part of which, you
state, is the cable television service charge. However, this
latter amount is not separately stated. The lessee gains from a
review of the invoice that a single charge has been made for the
accommodations.

It is evident from the invoice that Association bills the lessee
only for a room rental. It does not bill the lessee for room
accommodations, and a charge for the cable television service.

The tax which appears on the invoice is separately stated as
required in the cited portion of s. 212.07(2), Florida Statutes.
However, the tax amount which appears on the invoice is the tax
on the room rental as imposed by s. 212.03, Florida Statutes.
There is no tax separately stated for the other sale which, you
contend, is the sale of cable television service.

Sales tax is a "privilege or occupation" tax as imposed on
discrete transactions. See, Gaulden v. Kirk, 47 So. 2d 567, 579
(Fla. 1950). Here, the lease of transient rental space is a
"sale" as that term is defined in s. 212.02(15)(b), Florida
Statutes. Subsection (1) of s. 212.03, F,.S., imposes the
"privilege or occupation" tax on the "... total rental..."
charged for transient living accommodations.

Having found that only a single sale is evident on the invoice,
the Department takes the position that Association is not
engaged in reselling cable television service. Rather,
Association is the consumer of such service and is obligated to
pay the appropriate tax to the cable television service
provider. Consequently, Association may not extend a resale
certificate to the cable television service provider.

Association should pay the appropriate sales tax to the cable
television service provider, and collect and remit to the
Department the appropriate sales tax on the total rental, as
herein discussed, which it charged the transient rental lessee.

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,

Robert G. Parsons
Tax Law Specialist
Tax Policy and Dispute
Resolution

RGP/rp
Ctrl. No. 23334