Were tickets for scheduled train rides between tourist attractions subject to Florida sales tax as admissions or equipment rentals?

Plain-English summary

The Florida Department of Revenue concluded that tickets for the proposed train were not subject to sales tax. The charge paid for transportation, not admission to an attraction and not a rental or license to use the train.

The train would operate on a regular schedule and carry passengers between points in the system. Riders could board and leave at different locations, and a ticket did not grant admission to a museum or other facility. The operator also stated that the service offered no sightseeing, lecture, or amusement.

The transaction was not a rental of tangible personal property because passengers did not take possession of the train or direct or control its physical operation. Florida therefore treated the arrangement as a nontaxable transportation service.

What this means for you

Transportation operators

The point-to-point function mattered. The service moved passengers through a system on a regular schedule rather than selling entry to recreation or amusement.

Tourist attractions and ticket sellers

The ticket covered only the ride. It did not include admission or special admission to any connected museum or facility.

Accountants and tax professionals

Analyze both what the customer receives and who controls the equipment. Here, neither the admissions definition nor the tangible-property rental rules applied.

Common questions

Q: Was the train ticket a taxable admission? A: No. It did not admit the passenger to a place of amusement, sport, or recreation.

Q: Did connecting tourist attractions make the ride an amusement? A: No under the stated facts. The ticket provided transportation only, with no sightseeing, lecture, amusement, or attraction admission.

Q: Was the passenger renting the train or a seat? A: No. The passenger did not possess or control the train's physical operation.

Q: Did the train return every passenger to the boarding point? A: No. Passengers normally traveled from one point in the system to another.

Citations and references

• Fla. Stat. §§ 212.02(1) and 212.04 — definition and taxation of admissions
• Fla. Stat. § 212.05(1)(c) and (d) — rentals or licenses of tangible personal property
• Fla. Admin. Code r. 12A-1.005(4)(p) — trolley or train travel with disembarkation at other points
• Fla. Admin. Code r. 12A-1.071(10)(d) — passenger transportation without possession or operational control is a service, not a rental
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 96A-064

Original ruling text

Dec 23, 1996

Re: Technical Assistance Advisement 96(A)-064 Consideration Paid for Railroad Train Ride XXXX (Taxpayer) Sections 212.02(1), 212.04, 212.05(1)(c), and (1)(d), F.S. Rule 12A-1.005(4)(p), 12A-1.071(10)(d), F.A.C.

Dear :

This is a response, styled a Technical Assistance Advisement, to your letter dated September 23, 1996, wherein you ask whether consideration paid for entrance to a railroad train is subject to sales tax as an admission, or as a rental of tangible personal property. You contend the charge is not subject to tax because the consideration is paid in exchange for a transportation service.

You state on page 2 of your letter that Taxpayer, "... has purchased, from out of State, a diesel powered steam railroad engine which pulls three passenger trolley type cars seating 65 passengers...." You add that this equipment is now being tested for expected operation in XXX and that service will connect various tourist attractions along right-of-way not owned by Taxpayer.

You describe, also on page 2, that Taxpayer "... will issue tickets for the privilege of riding on the train. A ticket authorizes riding from any point in the system to any other point in the system. Passengers are not normally returned to the point where they board the engine and passenger car system." You add that "... [n]o ticket authorizes any admission or special admission to any Museum or other facility." You state that "[t]he charge for the train ticket is for the purpose of utilizing the transportation system alone." The train, you reveal, will operate on a regular schedule irrespective of the number of passengers seeking transportation. You state that various authorized businesses sell the tickets and that such

tickets are valid only for one day. Further, you assert that "[t]here is no `sight seeing', lecture or amusement in the system."

As to these facts, you opine that the tickets are not sold as admissions taxable in accordance with the provisions of s. 212.04, F.S., nor is the ticket price given in exchange for a lease of, or license to use, tangible personal property as interpreted in Rule 12A-1.071(1)(a), Florida Administrative Code. You contend that the tickets are sold solely for the purpose of providing a transportation service which is not subject to sales tax as provided in Rule 12A-1.005(2)(p), Florida Administrative Code.

Department Response

Section 212.05, F.S., levies sales tax on the privilege of engaging in various activities including the furnishing of "... any of the things or services taxable under this chapter...." There is no provision within this statute or within Chapter 212, F.S., for the imposition of sales or use tax on the furnishing of transportation services. Thus, lacking such statutory basis, transportation services are not subject to such tax. The activity you describe is a transportation service because the service is tendered for the act of transporting passengers from one point to another within the transportation system provided by Taxpayer to or from which, at any point, the passengers may entrain or detrain.

This service is not included within the statutory definition of "admissions" as such term is defined in s. 212.02(1), F.S., because the charge for the ticket is not that which is paid to admit a person to, or for the act of entering or staying in, a place of amusement, sport, or recreation. Rule 12A-1.005(4)(p), F.A.C., expressly provides, as you cite in your letter, that charges are not taxable as an admission if made for "... trolley, or train travel where the passengers may disembark for shopping, dining and other activities at points other than the origination point."

Neither is the service you describe a rental of, or license to

use, tangible personal property, which is made subject to tax by s. 212.05(1)(c) and (1)(d), Florida Statutes. As these statutes are interpreted in Rule 12A-1.071(10)(d), F.A.C., the passenger "... does not take possession or have any direction or control over the physical operation, [of the train and consequently] the contract constitutes a service transaction and not the rental of tangible personal property, and no tax is due on the transaction."

In sum, the charge paid by a passenger to board the train, in accordance with the facts you provide, is not given for an admission, nor is the consideration paid by the passenger pursuant to a lease or license to use tangible personal property. It is payment made for a transportation service which is not taxable.

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

Ctrl. No. 26589