Were carnival ride admissions exempt when the carnival operator sold tickets as a Florida fair association's agent?

Plain-English summary

Carnival admissions sold on behalf of the fair association were exempt from sales tax. The agreement appointed the carnival operator to sell the association's tickets as its agent. The operator furnished and ran the carnival, including rides, shows, food, and games, under a revenue-sharing arrangement with the association.

The exemption stopped where the operator acted for itself. Admissions to amusement devices or attractions operated on the operator's own behalf were taxable, and the operator had to collect tax on all food and other concession sales.

What this means for you

Operating at a qualifying fair does not make every carnival receipt exempt. The key question is whether the operator is selling the fair association's admission as its agent or selling its own admission.

Businesses should also separate ticket receipts from food, games, and other concession activity. The ruling expressly left those concession sales taxable even though qualifying fair-association admissions were exempt.

Common questions

Q: Were tickets sold as the fair association's agent exempt? Yes. The Department treated amounts received for the association's admissions as exempt.

Q: What if the carnival operator runs a ride or attraction on its own behalf? Admissions collected for that activity are taxable.

Q: Did the exemption cover food and concession sales? No. The operator had to collect tax on those sales.

Q: Did section 212.13(6) make the fair association pay a vendor's tax? No. It imposed fairground reporting duties but did not make the association responsible for collecting or remitting tax owed by a concessionaire, vendor, exhibitor, or licensee.

Citations and references

• Fla. Stat. § 212.02(1) — definition of admissions
• Fla. Stat. § 212.04(1) — tax on admissions
• Fla. Stat. § 212.08(7)(jj) — fair-association exemption
• Fla. Stat. § 212.13(6) — fairground concessionaire and vendor reporting
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-077

Original ruling text

Nov 19, 1997

Re: Technical Assistance Advisement 97A-077
Sales and Use Tax
Admissions for Fair Associations
Section 212.08(7)(j), F.S.
Section 212.13(6), F.S.
XXX Inc. ("Taxpayer")
XXX ("Fair Association")

Dear :

This is in response to your letter of June 9, 1997,
requesting a technical assistance advisement (TAA) regarding
whether sales tax must be collected on behalf of the fair

association.

FACTS

Taxpayer entered into an agreement with the Fair
Association, which is a Fair Association pursuant to section
616.08, F.S., and section 212.08(7)(jj), F.S. The agreement is
included. The agreement provides that the Taxpayer agreed to
sell tickets on behalf of the Fair Association as its agent.

The Taxpayer agreed to provide, operate, and exhibit a complete
carnival at the fairgrounds owned or leased by the Fair
Association. The Taxpayer agreed to provide between 32-37 rides
and family type shows to include 5 or 6 spectaculars along with
an appropriate mix of food and games of skill with a minimum of
35 games. At the discretion of the Fair Association, the
Taxpayer agreed to either pay on a daily basis 35 percent of the
ride gross receipts after applicable taxes had been deducted or
the Fair Association would collect all revenues and retain 65
percent of the gross receipts from rides after applicable taxes
are deducted. The Taxpayer agreed to provide a certificate of
insurance in the amount of one million dollars for personal

injury and property damage liability. The Fair Association
agreed to provide all required licenses and permits and trash

containers and final clean up of the Midway area.

QUESTION

Is the Taxpayer responsible for collecting sales tax on

admission charges?

YOUR POSITION

It is your position that the taxpayer is a sales agent of
the Fair Association acting on its behalf, and no sales tax is

due on admission charges pursuant to section 212.08(7)(jj), F.S.

STATUTORY AUTHORITY

Section 212.04(1), F.S., states in part:

(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....

Section 212.02(1), F.S., states:

(1) The term "admissions" means and includes the net sum of
money after deduction of any federal taxes 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,
including, but not limited to, theaters, outdoor theaters,
shows, exhibitions, games, races, or any place where charge
is made by way of sale of tickets, gate charges, seat

charges, box charges, season pass charges, cover charges,
greens fees, participation fees, entrance fees, or other

fees or receipts of anything of value measured on an

admission or entrance or length of stay or seat box
accommodations in any place where there is any exhibition,
amusement, sport, or recreation, 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.

Section 212.08(7)(jj), F.S., states:

(jj) Fair associations.--Also exempt from the tax imposed

by this part is the sale, use, lease, rental, or grant of a
license to use, made directly to or by a fair association,

of real or tangible personal property; any charge made by a
fair association, or its agents, for parking, admissions,

or for temporary parking of vehicles used for sleeping
quarters; rentals, subleases, and sublicenses of real or
tangible personal property between the owner of the central
amusement attraction and any owner of amusement devices and
amusement attractions, as those terms are used in ss.
616.15(1)(b) and 616.242(3)(a) and (i), for the furnishing

of amusement devices and amusement attractions at a public
fair or exposition; and other transactions of a fair
association which are incurred directly by the fair
association in the financing, construction, and operation

of a fair, exposition, or other event or facility that is
authorized by s. 616.08. As used in this paragraph, the
terms "fair association" and "public fair or exposition"

have the same meaning as those terms are defined in s.
616.001. This exemption does not apply to the sale of
tangible personal property made by a fair association
through an agent or independent contractor; sales of
admissions and tangible personal property by a
concessionaire, vendor, exhibitor, or licensee; or rentals
and subleases of tangible personal property or real
property between the owner of the central amusement
attraction and a concessionaire, vendor, exhibitor, or
licensee, except for the furnishing of amusement devices or

amusement attractions, which transactions are exempt.

(Emphasis supplied)

Section 212.13(6), F.S., states:

(6) Any fair association subject to chapter 616 which
leases or licenses its real property to, or allows its
assets or property to be used by, any concessionaire,
vendor, exhibitor, or licensee shall distribute to the
concessionaire, vendor, exhibitor, or licensee a form
suggested by the department which requests, at a minimum,
the name, business address, and telephone number of the
concessionaire, vendor, exhibitor, or licensee; its sales
tax registration number; and the amount of the daily
revenue that it receives as a result of activities and

sales on the fairgrounds or as a result of the use of the
assets or other property of the fair association. Each
vendor, concessionaire, exhibitor, or licensee that uses a
fair association's real property or other assets shall
complete and submit such a form to the management of the
fair association daily within 24 hours after the close of a

day's business, and the fair association shall make the

completed forms available to the department as requested by

the department. The failure of a vendor, concessionaire,
exhibitor, or licensee to complete and submit such a form
must be reported to the department by the fair association
within 24 hours after the form becomes due. This
subsection does not require the fair association to be
responsible for collecting or remitting the tax owed by any

such concessionaire, vendor, exhibitor, or licensee.

DETERMINATION

If a central amusement attraction owner sells the tickets
on its own behalf, the sales of the admission tickets are
taxable. However, if a fair association contracts with the
central amusement attraction owner to sell ride admission
tickets as an agent on behalf of the fair, the sale of the
tickets is exempt. Although admissions as defined in section
212.02(1), F.S., are taxable pursuant to section 212.04, F.S.,
the admissions here are exempt under section 212.08(7)(jj),

F.S., which provides that the agents are not liable to collect

sales tax on the admissions of the fair association. Here, you
indicate that the agreement provides that the taxpayer is to be
the agent of the Fair Association. Also, as the central
amusement operator, the amounts received for admissions on
behalf of the Fair Association are exempt from sales tax. If
the taxpayer is to operate amusement devices or attractions on
its own behalf, then the Taxpayer is responsible for collecting
sales tax on admissions collected on its own behalf. The
Taxpayer is responsible for collecting tax on all food and other
concession sales as provided in sections 212.08(7)(jj), F.S.,
and 212.13(6), F.S.

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,

Charles Wallace

Senior Tax Specialist

Technical Assistance and Dispute Resolution

CW!
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