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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