Were fees for swimming or snorkeling in structured and unstructured dolphin programs subject to Florida sales tax when spectators paid a separate taxable admission?

Subject

Admissions

Plain-English summary

The Department concluded that charges for participating in the operator's structured and unstructured dolphin programs were not subject to Florida sales tax. The operator maintained a controlled entrance to the aquatic site and charged every entrant either a spectator fee or a program-participation fee.

Florida taxed amounts received for admission to a place of amusement, sport, or recreation. But the cited rule exempted charges for entering or engaging in an activity when spectators paid a taxable admission to watch that activity. The operator told the Department that it collected admissions tax from each spectator entering the controlled area, so the participant-fee exemption applied to both programs.

The result did not depend on whether direct dolphin contact was guaranteed. The unstructured program involved experienced swimmers or snorkelers entering deep water with no promise of direct contact. The structured program included an educational briefing and a half-hour in-water session with guaranteed contact whose form depended on the dolphin and handler.

What this means for you

Under the rule applied in this 1997 advisement, a recreation operator's participant charge could be exempt when spectators paid a separate taxable admission for the same activity. The factual link between the taxable spectator admission and the participant activity was decisive.

The ruling did not treat every charge at the facility as exempt. Spectators did not enter the water or participate, and the operator stated that it collected admissions tax on their entry fees.

Common questions

Q: Were fees for both dolphin programs exempt? Yes. The Department applied the exemption to participant fees for both the structured and unstructured programs.

Q: Were spectator or observer fees exempt too? No. The ruling relied on the operator's statement that admissions tax was collected from each spectator entering the controlled area.

Q: Did it matter that the activity took place in natural water rather than a pool? The Department recorded that the site was connected to or part of a natural body of water, but its tax analysis focused on the controlled entrance and taxable spectator admission.

Q: What did the programs cost? The unstructured session cost between $80 and $135. The structured in-water program cost $90, while listed observer charges were $7.50 for adults and $5 for students or children.

Citations and references

• Fla. Stat. § 212.04(1)(a) — taxable privilege of selling or receiving value by way of admissions
• Fla. Stat. § 212.02(1) — definition of admissions to places of amusement, sport, or recreation
• Fla. Admin. Code R. 12A-1.005(4)(k) — exemption for entering or engaging in an activity when spectators pay a taxable admission
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-034

Original ruling text

May 08, 1997

Re: Technical Assistance Advisement 97(A)-034
XXX (herein Taxpayer)
Admissions - participation with dolphins in aquatic
activity
Sections 212.02(1), 212.04(1)(a), F.S.
Rule 12A-1.005(4)(k), F.A.C.

Dear:

This is a response, styled a Technical Assistance Advisement, to
your letter dated February 24, 1997, wherein you ask whether
certain charges collected by Taxpayer, for participation in
aquatic activities involving dolphins, are subject to sales tax
imposed on admissions. You attached to your letter a copy of
four pages which is a facsimile of an advertising brochure of
Taxpayer in which are described the aquatic activity of
participants who are exposed to, as expressed in the first page
of the brochure, "... the study of inter-species interaction
between dolphins and humans...." This page also describes the
two aquatic programs offered by the Taxpayer in the following
manner:

We offer two educational programs, one is a structured
program and the other is an unstructured program. Both are
designed for those interested in learning more about
dolphins and their environment and will produce a total
role reversal experience with the human entering the
dolphin world as a swimmer or snorkeler.

The brochure describes the unstructured program in the following
manner:

(The participant) will be swimming in deep water and...
will be swimming with other human beings and large animals,
neither of which we will have full control over.
Participants must be experienced in the use of mask and
fins.

The brochure also notes that the Taxpayer is not operating an
amusement park and that it "... makes no promises of any direct
contact between human participants and dolphins in our
nonstructured programs." The nonstructured program is at least
2 hours in duration. Longer periods are also offered. A charge
is made between the price range of $80 and $135 for the
nonstructured session. You ask whether such a charge is subject
to sales tax.

The structured program is described as "... offering a
structured in-water orientation program for those who are
interested. In this program you will be involved with dolphins
taking part in our in-water therapy programs." The brochure adds
that "(t)he program will begin with an educational briefing
about these dolphins, followed by a half-hour structured
session. Contact is guaranteed but the type of interaction will
vary depending on the dolphin and handler."

The cost to participate in the structured program is described
as "$90.00 plus tax per in-water participant. Cost for a
nonswimming participant/observer for either the structured or
nonstructured program is: Adults, $7.50 plus tax;
Students/Children, $5.00 plus tax." You ask whether these
charges are subject to sales tax.

Note is made that the Department issued a Letter of Technical
Advice on this issue dated February 18, 1997.

Department Response

In a conversation on March 17, 1997, the Department learned that
the site of this aquatic activity was in a body of water not
artificially contained as in a swimming pool or reservoir, but
in water connected to or a part of a natural body of water.
However it is the understanding of the Department that the
Taxpayer maintains a controlled entrance area to this body of
water in a manner which requires each person seeking ingress to
the site to pay either a spectator fee, or a fee as described
above for the participation in either of the nonstructured or
structured programs. The spectator class does not enter the

water nor engage in any way in the aquatic activity.

Section 212.04(1)(a), F.S., declares that "... every person is
exercising a taxable privilege who sells or receives anything of
value by way of admissions." The term "admissions" is defined,
in part, in s. 212.02(1), F.S., to include "... the net sum of
money ... for admitting a person or vehicle or persons to any
place of amusement, sport, or recreation or for the privilege of
entering or staying in any place of amusement, sport or
recreation...."

Rule 12A-1.005, F.A.C., interprets the statutes, and the
provision in paragraph (4)(k) is dispositive of the instant
issue. This rule provision states in part that " (c)harges made
for the privilege of entering or engaging in any kind of
activity for which a taxable admission is made to spectators are
exempt." In the conversation on March 17, 1997, you stated that
an admissions tax is collected from each spectator who enters
the controlled area discussed above. Thus, in applying the
statutes and Rule 12A-1.005(4)(k), F.A.C., to the information
conveyed to the Department, the participation fee required of
those who engage in either the nonstructured or structured
program is not subject to sales tax.

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.28060