Was the markup on Florida attraction admissions taxable when vouchers were resold to customers outside Florida?

Subject

Out-of-State Resale of Florida Attraction Admissions

Plain-English summary

The markup on the resold Florida attraction admissions was taxable even though the customers bought their vouchers in the United Kingdom. The foreign corporation purchased admissions from Florida attractions, paid Florida tax, and resold the admission rights at a higher price.

The Department focused on the privilege represented by the voucher, not the physical ticket or the place where the voucher was sold. Because customers exercised the admission privilege at Florida places of amusement, selling abroad did not remove the markup from Florida admissions tax.

Section 212.04 required tax on the full resale price. The reseller could take credit for the Florida tax previously paid when the attraction billed it or its Florida affiliate.

What this means for you

For admissions, Florida looked to where the underlying privilege was exercised. An overseas or out-of-state voucher sale could still be taxable when it entitled the customer to enter a Florida attraction.

The result was the same across all three submitted billing and redemption structures, including arrangements where a Florida affiliate exchanged vouchers or paid the attraction before reimbursement.

Common questions

Q: Why did Florida tax a voucher sold outside the state? The thing sold was the privilege of admission, and that privilege was exercised in Florida.

Q: Was only the reseller's markup taxed? The statute required collection on the full resale price, but allowed credit for tax previously paid on the admission.

Q: Did using a Florida affiliate change the result? No. The TAA reached the same conclusion whether customers redeemed directly at attractions or first exchanged vouchers through the affiliate.

Q: Was the attraction's initial charge already taxed? Yes. The TAA says the attraction correctly imposed Florida tax when billing for the admissions.

Citations and references

• Fla. Stat. § 212.04(1)(a) — taxable privilege of selling admissions
• Fla. Stat. § 212.04(1)(b) — tax on actual value received
• Fla. Stat. § 212.04(1)(c) — tax on full admission resale price and credit for tax previously paid
• Fla. Admin. Code r. 12A-1.005 — admissions
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98A-017

Original ruling text

SUMMARY

A taxpayer located outside of Florida purchased admission
tickets and paid tax on such purchases. Taxpayer
subsequently resold the tickets outside Florida for a
higher amount. The actual admissions occurred in Florida.
Taxpayer sought advisement on whether tax was due when the
tickets were resold at a higher amount outside of Florida.

Section 212.04(1)(a), F.S., provides that every person is
exercising a taxable privilege who sells or receives
anything of value by way of admissions. Section
212.04(1)(c), F.S., provides that if a purchaser of an
admission subsequently resells the admission for more than
the amount paid, the purchaser must collect tax on the full
sales price and may take a credit for the amount of tax
previously paid.

This TAA determined that the item sold is not the ticket;
rather the privilege represented by the ticket is what is
sold, and the privilege will be exercised in Florida.
Therefore, the markup is subject to tax and should not
escape taxation because the tickets are resold outside of
Florida.

Mar 30, 1998

Re: Technical Assistance Advisement 98A-017
Sales and Use Tax - Admissions
Section: 212.04, F.S.
Rule: 12A-1.005, F.A.C.
Petitioner: XXX (herein "Taxpayer")
FEI: XXX

Dear :

This letter is a response to your petition dated December
2, 1997, for the Department's issuance of a Technical Assistance

Advisement ("TAA") concerning the above referenced party and
matter. 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.

DISCUSSION OF FACTS

You provided the following information concerning all three
scenarios, which have been presented below for review and
advisement thereon:

Taxpayer is organized as a foreign corporation operating in
the United Kingdom. Taxpayer has a Florida affiliate, XXX
("Affiliate"). Taxpayer purchases admission tickets from
tourist attractions, located in Florida, at a discounted
rate. These tickets are then resold, at a marked-up amount,
to Taxpayer's customers who are located in the United
Kingdom. When the customer makes a purchase, a voucher is
issued to the customer. The voucher is later redeemed for
admission to the attraction.

Scenario #1:

When the Taxpayer's customers come to Florida, they redeem
the vouchers at the various attractions in order to gain
entrance. After the vouchers have been redeemed, the
attraction bills the Taxpayer for the cost of the tickets
represented by the number of vouchers received. This
amount paid to the attractions for the admission tickets
includes Florida sales tax.

Scenario #2:

When the Taxpayer's customers come to Florida, they redeem
the vouchers through the Affiliate. The Affiliate issues
new vouchers to the customers. These vouchers are used to
gain entrance to the various attractions. After the
vouchers have been redeemed, the attraction bills the
Taxpayer for the total cost of the tickets represented by

the vouchers received. This amount paid to the attractions
for the admission tickets includes Florida sales tax.

Scenario #3:

When the Taxpayer's customers come to Florida, they redeem
the vouchers through the Affiliate. The Affiliate issues
new vouchers to the customers, which are used to gain
entrance to the various attractions. The Affiliate is
billed by the attractions for the total cost of tickets
represented by the vouchers received. This amount includes
Florida sales tax. The Taxpayer then reimburses the
Affiliate for this cost.

REQUESTED ADVISEMENT

You seek advisement on whether any of the above described
scenarios are subject to sales and use tax.

Discussion, Analysis, and Conclusion of Law

In all of the above described scenarios, a sale of an
admission occurs in Florida between the Florida attraction and
the Taxpayer. Tax is correctly imposed on this transaction.

Taxpayer issues vouchers which allow its customers to enter
Florida places of amusement and these places of amusement bill
Taxpayer for the cost of such admissions. The price paid by
Taxpayer's customers exceeds the amount billed to Taxpayer.

Section 212.04(1)(a), F.S., provides that every person is
exercising a taxable privilege who sells or receives anything of
value by way of admissions. Pursuant to s. 212.04(1)(b), F.S.,
the admissions tax is imposed on the "actual value received"
from such admissions. Section 212.04(1)(c), F.S., provides that
if a purchaser of an admission subsequently resells the
admission for more than the amount paid, the purchaser must
collect tax on the full sales price and may take a credit for
the amount of tax previously paid. The item sold is not the
ticket; rather the privilege represented by the ticket is what
is sold, and the privilege will be exercised in Florida.

Therefore, the markup is subject to tax and should not escape
taxation because the tickets are resold outside of Florida.

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 upon 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 from that
which is 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 that 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 this response.

Sincerely,

Leigh L. Ceci
Tax Law Specialist

Enclosure
Control #32126