Were cruise tickets taxable admissions when passengers could disembark at a stop before returning?

Subject

Admissions Tax on Cruises With and Without Stopovers

Plain-English summary

Cruise tickets were exempt from Florida sales tax as transportation when passengers could disembark at a location other than the starting point before the vessel returned. The company's sightseeing, shopping, dining, and dinner cruises included destination stopovers where passengers went ashore.

The opposite rule applied when passengers stayed aboard and simply returned to the origination point. Those charges were taxable admissions for sightseeing, dinner, recreation, or similar activity. The company's occasional private cruise with an onboard function and no disembarkation stop fell within that taxable pattern.

The Department separately warned that meals or tangible personal property sold while the vessel was dockside or in Florida waters were taxable transactions, even where the transportation charge itself was exempt.

What this means for you

The ticket's label—cruise, charter, sightseeing, or dinner—did not control. The practical route mattered: an actual stop where passengers could leave the vessel made the charge transportation under this ruling.

A temporary docking without passenger disembarkation would not satisfy the stated test. Operators also had to analyze onboard or dockside meals and merchandise separately.

Common questions

Q: Were cruises with shopping or dining stopovers taxable? No. The ruling treated their ticket charges as exempt transportation because passengers could disembark away from the starting point.

Q: What about a cruise that sailed and returned without a stop? Its charge was a taxable admission.

Q: Was a private onboard function taxable? Yes, under the company's described no-disembarkation private cruise.

Q: Did the ruling exempt every meal connected with an exempt cruise? No. It said meals or tangible goods sold dockside or in Florida waters were taxable. It did not separately analyze every bundled dinner component in the stated ticket facts.

Q: Did passengers actually have to leave the vessel? The rule focused on whether they could disembark at another point; the company's qualifying cruises gave them stopovers ashore.

Citations and references

• Fla. Stat. § 212.02(1) — definition of admissions
• Fla. Stat. § 212.04(1)(a) — taxable privilege of selling admissions
• Fla. Admin. Code r. 12A-1.005(4)(o), (p) — cruises, sightseeing, and transportation stopovers
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 97A-087

Original ruling text

Dec 09, 1997

Re: Technical Assistance Advisement 97A-087 Sales and Use Tax - Admissions/Cruises Sections: 212.02, 212.04, F.S. Rule: 12A-1.005, F.A.C.

Dear :

This is a response styled a Technical Assistance Advisement to your letter dated June 24, 1997, concerning the above referenced matter as applied to the XXX ("Company"). Your correspondence has been carefully examined and the Department finds it to be in compliance with the 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:

[Company] operates daily and evening dinner cruises that transport passengers to various locations, where they disembark for a period up to two (2) hours and then transport them back to the original point of embarkation. We offer 10:00 A.M. and 2:00 P.M. cruises for $10.95, that drop off passengers at a tropical location where they disembark to shop for souvenirs, purchase food, and see alligators, birds and monkeys. We also offer a daytime cruise for $14.95 that delivers passengers to another city for a 2 1/2 hour stopover for shopping and eating. In the evening we offer our Dinner Cruise for $23.95 that cruises to a tropical island-type restaurant where passengers disembark for two (2) hours for dinner and a show ashore and then return to the original point of embarkation. The dinner is included.

On rare occasions we will charter the boat for a private cruise where the passengers just cruise and have a function

on board. In those instances, I assume we would be required to add sales tax since the passengers are not disembarking.

The transactions are made on a daily basis when customers purchase tickets of admission at our Box Office. There are not contracts as this is a walk up business where most people pay on the day they go on the cruise. A brochure is enclosed and a sample of tickets that are exchanged for admission fee.

REQUESTED ADVISEMENT

You ask, if the vessel docks and passengers can disembark, whether the charge is considered to be for transportation and exempt from tax.

LAW AND ANALYSIS

Section 212.02(1), F.S., defines the term "admissions" as follows:

(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 212.04(1)(a), F.S., provides the legislative intent as follows:

(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.

Rule 12A-1.005(4)(o) and (p), F.A.C., clarifies the taxability of charges for cruises to nowhere and charges for transportation services made by other type vessels. This rule provides:

(o) When the owner of a boat or vessel operated as a "head-boat" or "party boat" supplies the crew, which remains under the control and direction of the owner, and makes a charge measured on an admission or entrance or length of stay aboard the vessel for the privilege of participating in sightseeing, dinner cruises, sport, recreation, or similar activities including fishing, the charge is taxable as an admission.

1. Effective July 1, 1991, charges made by foreign
   registered vessels carrying passengers to international waters are exempt from the tax on admissions.

2. Effective July 1, 1992, charges made by foreign
   registered vessels carrying passengers to international waters where passengers cannot disembark from the vessel at points other than the origination point (cruises to nowhere) are taxable. If the vessel docks, and passengers can disembark, the charge is considered to be for transportation and is exempt from tax.

(p) Charges measured on an admission or entrance or length of stay for rides on helicopters, sightseeing trolley cars, sightseeing buses or trains, or any sightseeing or amusement ride where the participant is normally returned to the origination point are taxable. This does not apply to charter or regularly scheduled aircraft, bus, taxi,

trolley, or train travel where the passengers may disembark for shopping, dining, or other activities at points other than the origination point.

RESPONSE

The sales tax imposed by Chapter 212, F.S., does not extend to charges made for the transportation of persons. Charges made by vessels from which passengers can disembark at points other than the origination point are considered to be transportation charges and exempt from sales tax. Charges made where passengers cannot disembark from the vessel at points other than the origination point are considered to be for an admission and are taxable. However, if meals or items of tangible personal property are sold while the vessel is dockside or in Florida waters such transactions would be 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 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.

Sincerely,

Janet Cumbie

Tax Law Specialist
Technical Assistance & Dispute Resolution (850)922-4847

JCC\
Control No: 29768