Did a nonprofit community club have to collect Florida admissions tax on voluntary member payments for recreational activities?

Subject

Admissions Paid to a Club

Plain-English summary

In the original ruling, the club had to collect and remit Florida sales tax on its admissions charges. The nonprofit private club organized sporting and recreational activities for community residents, including tennis, shuffleboard, shows, dances, dinners, and other member functions. The Department treated dues and fees for its recreational or physical-fitness facilities as taxable admissions.

The exception for certain condominium, homeowners, or cooperative-association payments did not apply to the stated facts. The club had not clearly established that it was a homeowners association, and the petitioner said the payments were not required as a condition of owning or occupying real property.

The official document begins with a status notice directing readers to revised TAA 97A-041R, issued November 10, 1997. This page therefore explains the original ruling only.

What this means for you

For the original facts, limiting activities to residents and invited guests and operating as a nonprofit did not remove the admissions tax. The property-association exception depended on mandatory payments tied to ownership or occupancy and qualifying common facilities, not simply on the club's community purpose.

Common questions

Q: Were the club's recreation-related member payments taxable? Yes, under the original ruling.

Q: Did nonprofit status create an exemption? No exemption was granted on that basis in this ruling.

Q: Why did the property-association exception fail? The club's status as a homeowners association was unclear, and the payments were not mandatory as a condition of property ownership or occupancy under the original facts.

Q: Can this original ruling be read without the revision? No. The official text expressly says to see revised TAA 97A-041R.

Citations and references

• Fla. Stat. § 212.04 — tax on admissions
• Fla. Stat. § 212.02(1) — definition of admissions, including certain private-club dues and fees
• Fla. Admin. Code r. 12A-1.005(5)(d)2.d. — exception for qualifying mandatory property-association payments
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-041

Original ruling text

Status: See Revised TAA 97A-041R issued November 10, 1997

Jun 12, 1997

Re: Technical Assistance Advisement 97(A)-041 Sales and Use Tax - Admissions Paid to a Club Sections: 212.02, 212.04, F.S. Rule: 12A-1.005, F.A.C. Petitioner: XXX

Dear:

This is a response to your petition received April 3, 1997, for the Department's issuance of a Technical Assistance Advisement ("TAA") concerning the above referenced matter as applied to XXX (Club). Your petition has been carefully examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.

STATED FACTS

You provide the following facts, in part:

Club, is a Not-For-Profit Corporation organized pursuant to the Not-For Profit Law of the State of Florida, set forth in part one of Chapter 617 of the Florida Statutes.

The primary purpose for which this Corporation was formed is to promote better living conditions throughout the... Community....

In furtherance of such purpose, the corporation shall have power to promote fellowship, goodwill, entertainment, organize sporting, recreational and fund raising activities among the residents of the... Community, and provide services of a general nature to the members of the Club.
....

As outlined above, we are a Club organized specifically for the residents of the... Community. We do not hold ourselves out as a commercial Club where admission is open to the public. One must be a member of the... Community or their invited guest to attend a function.

The following are functions that are provided for and by the members: shows made up of members, dances, Koffee Klatch, dinners prepared and served by members. The charges for these functions are to primarily cover costs and in some cases are free will donations....

You also indicate in your letter that you are a member of the club.

By telephone conference, you indicated that the dues or fee payments were not required to be paid as a condition of ownership or occupancy of real property. You further stated that "recreation" as provided in your request included but was not limited to tennis, shuffleboard, and other sports activities.

REQUESTED ADVISEMENT

You ask whether Club is required to collect and remit Sales tax on the admissions charge.

LAW AND ANALYSIS

Section 212.04, F.S, provides in part:

*212.04 Admissions tax; rate, procedure, enforcement.-(1)(a) It is hereby declared to be the legislative intent that every person is exercising a taxable privilege who sells or receives anything of value by way of admissions.

(b) For the exercise of such privilege, a tax is levied at the rate of 6 percent of sales price, or the actual value received from such admissions, which 6 percent shall be added to and collected with all such admissions from the

purchaser thereof, and such tax shall be paid for the exercise of the privilege as defined in the preceding paragraph. (E.S.)

The term "Admissions" is defined in part under s. 212.02(1), F.S., as:

212.02 Definitions.
The following terms and phrases when used in this chapter have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

(1) The term "admissions" means and includes... and all dues and fees paid to private clubs and membership clubs providing recreational or physical fitness facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, exercise, and fitness facilities, except physical fitness facilities owned or operated by any hospital licensed under chapter 395. (E.S.)

Here, it is clear that Club, is a private club which collects dues and fees for the use of its recreational or physical fitness facilities. As you indicated, the club organizes sporting and recreational activities, including tennis, shuffleboard and other sports for its members.

Rule 12A-1.005(5)(d)2. d., F.A.C., interprets the statutes on the taxability of admissions regarding homeowner's associations. That section provides, in part:

12A-1.005 Admissions.
...
(5) DUES AND INITIATION FEES, EQUITY AND NONEQUITY MEMBERSHIPS, CAPITAL CONTRIBUTIONS AND ASSESSMENTS, REFUNDABLE AND NONREFUNDABLE DEPOSITS, AND USER FEES.
...
(d)...

2. The following payments made to private clubs or
   membership clubs are not "fees" which are subject to tax on admissions....

d. Mandatory dues and fees paid to a condominium association, homeowners' association, or cooperative association when they are required to be paid as a condition of ownership or occupancy of real property and the club facilities are part of the common elements or common areas of the real property. (E.S.)

It is not clear that Club is a homeowner's association. Even if Club were a homeowner's association, because the subject payments were not required to be made as a condition of ownership or occupancy of real property, the provisions of Rule 12A-1.005(5)(d)2.d., F.A.C., do not apply. Therefore, under the above statute and rule, the member payments made to club are taxable.

CONCLUSION

Club is required to collect and remit Sales tax on the admissions charge.

RECORD KEEPING

According to Florida law, every taxpayer has the duty to maintain adequate books and records.

Section 212.13(2), F.S., provides in part:

(2) Each dealer, as defined in this chapter, shall secure, maintain, and keep as long as required by s. 213.35 a complete record of tangible personal property or services received, used, sold at retail, distributed or stored, leased or rented by said dealer, together with invoices, bills of lading, gross receipts from such sales, and other pertinent records and papers as may be required by the department for the reasonable administration of this chapter; all such records which are located or maintained in this state shall be open for inspection by the department at all reasonable hours at such dealer's store, sales office, general office, warehouse, or place of business located in this state.... Any dealer subject to

the provisions of this chapter who violates these provisions is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083. (E.S.)

Section 213.35, F.S., provides:

Each person required by law to perform any act in the administration of any tax enumerated in s. 72.011 shall keep suitable books and records relating to that tax, such as invoices, bills of lading, and other pertinent records and papers, and shall preserve such books and records until expiration of the time within which the department may make an assessment with respect to that tax pursuant to s. 95.091(3). (E.S.)

Section 212.12(6), F.S., expressly provides, in part:

(6)(a) ... It shall be the duty of every person required to make a report and pay any tax under this chapter,... to keep and preserve suitable records of the sales, leases, rentals, license fees, admissions, or purchases, as the case may be, taxable under this chapter; such other books of account as may be necessary to determine the amount of the tax due hereunder; and other information as may be required by the department.... (E.S.)

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 confidential information, we request you notify the undersigned in writing within 15 days of any deletions you wish made to the request or this response.

Should you have any further questions concerning this matter, please do not hesitate to contact me.

Sincerely,

Eric A. de Moya, Esq.
Tax Law Specialist
Technical Assistance and Dispute Resolution (904)922-4714

NOTICE UNDER THE AMERICANS WITH DISABILITIES ACT

Persons needing an accommodation to participate in any proceeding before the Department of Revenue, should contact the Department at (904)488-0717 (voice), or 1-800-DOR-8331 (TDD), at least five working days before such proceeding. You may also call via the Florida Relay System at 1-800-955-8770

Control No. 28538