Which electricity customers qualified for Florida's residential-use exemption, including employee housing, RV sites, vacation homes, and hunting lodges?

Subject

Exempt Residential Use of Electricity

Plain-English summary

The Department applied the residential electricity exemption according to how each property was used, whether the service included commercial or transient use, and in some cases how the customer was billed. A residence did not need to be the owner's primary home or occupied year-round to qualify.

When an RV park passed electricity through as part of a taxable lot-rental charge, tax applied to the full amount paid for use of the lot, including electricity. The park could take a credit for tax it had already paid on the electricity.

What this means for you

The exemption focused on residential household use rather than who paid the bill. That is why company-paid employee housing could qualify while an RV park's master bill did not.

Mixed or transient use was decisive. If any part of a master-metered supply served nonexempt purposes, the entire sale was taxable unless the nonexempt consumption was separately metered.

Common questions

Q: Must a vacation home be the owner's primary residence? No. The ruling imposed no minimum occupancy period on a second or vacation home that was not used for transient rentals.

Q: Why was the RV park's master electric bill taxable? The park served transient guests and commercial functions such as an office or vending machines, so at least part of the electricity was nonresidential.

Q: When could an RV resident's direct bill become exempt? When separately metered and the resident had continuously lived there longer than six months or had a bona fide written lease longer than six months.

Q: Did the account need to be in the resident's name for employee housing? No. Both company-billed and employee-billed residential employee housing were exempt.

Citations and references

• Fla. Stat. § 212.08(7)(j) — residential household utility exemption and mixed-use rule
• Fla. Stat. § 203.01 — gross receipts tax referenced by the utility exemption
• Fla. Stat. §§ 320.01(1)(b) and 513.01(9) — recreational vehicles and temporary or seasonal living quarters
• Fla. Stat. § 212.03(1) and (7)(c) — transient-rental tax and longer-term occupancy provision discussed in the ruling
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-024

Original ruling text

SUMMARY

An electric cooperative provides electrical service to a variety of customers who claim exemption from sales tax based on residential usage. The Department responded that sales of electricity for use at company-owned housing, second homes, and winter residences are exempt from tax. Electricity billed to the operator of an RV park is taxable, while electricity billed directly to a resident at an RV park is exempt, provided that person has continuously resided at the RV park for longer than six months or has signed a bona fide lease for longer than six months. Sales of electricity for use at a hunting lodge will be exempt, provided the lodge is not available for rent.

Apr 01, 1997

Re: Technical Assistance Advisement 97A-024 Sales and Use Tax; Exempt Residential Use of Electricity Section 212.08(7)(j), F.S.

Dear :

This is in response to your request for a Technical Assistance Advisement regarding the application of sales tax to certain purchases of electrical energy by customers of XXX, hereinafter "the cooperative." Your request presents the following types of customers:

1. A company-owned house which is provided to the company
   employee as part of his compensation (i.e. A dairy provides a house for its foreman) and the company pays the power bill and it is in the company's name.

2. Same as #1, except the employee pays the power bill and
   the account is in his name.

3. An RV park with rental lots on which renters park a

trailer or motor home, and the lot rental fee includes the cost of power. (Power bill is in the RV park's name[.])

4. Same as #3, except the rent[e]r pays the power bill
   directly to the cooperative.

5. A second home, typically used on weekends or vacations
   (not primary residence).

6. A weekend hunting lodge.

7. A house which is the residence of the owner for the
   winter months, but which he vacates to return to another state for the balance of the year.

RELEVANT AUTHORITY

The following passages from the Florida Statutes (F.S.) are pertinent to your request.

Section 212.08(7)(j), F.S., provides:

Household fuels.-- Also exempt from payment of the tax imposed by this chapter are sales of utilities to residential households or owners of residential models in this state by utility companies who pay the gross receipts tax imposed under s. 203.01, and sales of fuel to residential households or owners of residential models, including oil, kerosene, liquefied petroleum gas, coal, wood, and other fuel products used in the household or residential model for the purposes of heating, cooking, lighting, and refrigeration, regardless of whether such sales of utilities and fuels are separately metered and billed direct to the residents or are metered and billed to the landlord. If any part of the utility or fuel is used for a nonexempt purpose, the entire sale is taxable. The landlord shall provide a separate meter for nonexempt utility or fuel consumption.

Section 320.01, F.S., provides in part:

(1) "Motor vehicle" means:...
(b) A recreational vehicle-type unit primarily designed as temporary living quarters for recreational, camping, or travel use, which either has its own motive power or is mounted on or drawn by another vehicle....

Section 513.01(9), F.S., provides:

"Recreational vehicle" has the same meaning as provided for the term "recreational vehicle-type unit" in s. 320.01. However, the terms "temporary living quarters" and "seasonal or temporary living quarters" as used in s. 320.01, in reference to recreational vehicles placed in recreational vehicle parks, relate to the period of time the recreational vehicle is occupied as living quarters during each year and not to the period of time it is located in the recreational vehicle park. During the time the recreational vehicle is not occupied as temporary or seasonal quarters, it may be stored and tied down on the recreational vehicle site. The affixing of a recreational vehicle to the ground by way of tie-downs or other removable fasteners, and the attachment of carports, porches, screen rooms, and similar appurtenances by way of removable attaching devices, does not render the recreational vehicle a permanent part of the recreational vehicle site.

DETERMINATION

Pursuant to the above statute, the charge for electrical energy is exempt from tax when sold to residential households. The statute does not require the electricity to be directly billed to the resident. The relevant determination is whether a unit or facility receiving the electricity is a "residential" household as opposed to one which serves transient guests. Accordingly, the application of tax for the cooperative's customers is as follows.

The electrical charges to customers 1. and 2. will be exempt from tax, since the electricity is for residential purposes.

Recreational vehicles, including "travel trailers," "camping trailers," "truck campers," "motor homes," "private motor coaches," "park trailers," and "fifth-wheel trailers," are designed primarily as temporary living quarters. See ss. 320.01(1)(b) and 513.01(9), F.S. Thus, an RV park which provides parking for such vehicles, is a commercial enterprise which is renting at least some (and likely a significant number) of its facilities to transient guests. If an RV park pays the charges for electricity supplied to the park, such charges are subject to tax because, at minimum, a part of the electricity used is for commercial, and not residential, purposes. Even if the RV park becomes a facility exempt from the transient rentals tax pursuant to s. 212.03(7)(c), F.S., that does not mean that all of the electricity used by, and billed to the facility, will be for strictly residential use. Some of the electricity will still be used for commercial purposes, such as that supplied to the rental office, used to run any vending machines, or supplied to lots rented to transient guests. Therefore, because there still would be a commercial usage of at least part of the electricity, the exemption contained in s. 212.08(7)(j), F.S., is not applicable, and the charges for electricity to such a facility (customer 3.) would be subject to tax.

Where the rental of lots in the RV park is subject to the transient rentals tax under s. 212.03, F.S., and the RV park passes the electricity charges through to its customers as part of the lot rental fee, tax will be due on the entire consideration paid for the right to use the lots (including the charge for electricity). s. 212.03(1), F.S. The RV park may then take a credit for the tax that it already has paid on the electricity charges made to the facility.

The charge the cooperative makes to customer 4. is taxable, unless customer 4. has continuously resided at the RV park for longer than six months or has signed a bona fide written lease with the RV park for a lot for longer than six months. In that event, customer 4. will be considered a resident, as long as customer 4. continuously resides at that RV park. Accordingly, the charges for residential electrical service to customer 4. will be exempt from tax, provided the electrical service for

that renter is separately metered by the cooperative.

The electrical charges for customers 5. and 7. will be exempt from tax. There is no requirement that the owner of a second or vacation home, which is not used for transient rental purposes, must continuously reside at that home for any specified time period.

It is not clear from your letter whether the weekend hunting lodge (customer 6.) is a small, private dwelling or commercial facility. If the lodge is privately owned and not available for rent, the dwelling can be considered the same as a second or vacation home and charges for electricity will be exempt from tax. If the lodge is available for rent, it will be considered a transient facility and charges for electricity will be taxable.

This response constitutes a Technical Assistance Advisement under Section 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advise as specified in Section 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 advise 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 Section 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 response.

Sincerely,

Jeffery L. Soff

Tax Law Specialist
Technical Assistance and
Dispute Resolution

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