How did Florida tax mandatory cleaning and guard charges for transient condominium rentals?

Plain-English summary

The association had to collect transient-rental taxes on every mandatory amount charged to guests, including separately stated cleaning, guard, and processing fees. Separate pricing did not remove a required charge from the taxable rental total.

The tax treatment was different when the association bought services for the property. Cleaning a residential condominium was treated as residential cleaning and was not taxable even though guests' stays were subject to transient-rental taxes. Guard services were taxable whether supplied to residential or nonresidential facilities.

What this means for you

For transient accommodations, a required fee can be taxable as rent even when the underlying service would receive different treatment if the property operator bought it directly. Keep the guest charge and the operator's vendor purchase as separate tax questions.

Common questions

Q: Does separately stating a mandatory cleaning fee make it nontaxable? No. The ruling included it in the total transient-rental charge.

Q: Did the association owe sales tax when buying residential cleaning? No, because the condominium qualified as residential under the cited definition.

Q: Were guard services exempt for residential condominiums? No. The ruling treated guard services as taxable for residential and nonresidential facilities.

Citations and references

• Fla. Stat. § 212.03(1)-(2) — transient-accommodation tax
• Fla. Admin. Code r. 12A-1.061(3) — required guest charges
• Fla. Stat. § 212.05(1)(j) — protection and nonresidential cleaning services
• Fla. Stat. § 718.103(22) — residential condominium
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99A-058

Original ruling text

SUMMARY

QUESTION 1: Should sales tax and the tourist development
tax be charged on rental consideration, when the rental
consideration includes a separately stated mandatory charge
for cleaning services?

ANSWER 1 - Based on Facts Below: Yes. When charges for
"rental fees", "guard fees", "processing fees", and
"cleaning", are separately stated and are mandatory
charges, the charges are part of the total charge to rent
the transient accommodations. Therefore, sales tax, plus
any locally imposed discretionary sales surtax or tourist
tax, must be charged and collected on the total amount
charged to the guest.

QUESTION 2: Is the purchase of cleaning services for
residential condominiums taxable, when the condominiums are
rented?

ANSWER 2 - Based on Facts Below: No. Charges for cleaning
services to "residential condominiums" are considered to be
for residential use and are therefore not taxable,
notwithstanding the fact that the rental of a condominium
unit is subject to the transient rental taxes.

QUESTION 3: Is the purchase of guard services by a
residential condominium taxable?

ANSWER 3 - Based on Facts Below: Sales tax is imposed on
all charges for guard services to nonresidential or
residential facilities, including condominiums.

Oct 18, 1999

Re: Technical Assistance Advisement 99A-058
Sales and Use Tax - Taxability of Cleaning Services;
Transient Rentals

Sections: 212.03(1), (2), 212.05(1)(j), 718.103(22), F.S.
Rule: 12A-1.061, F.A.C.
Petitioner: XXX (herein "Association")
FEI: XX

Dear :

This letter is a response to your petition dated April 21, 1999,
requesting that the Department issue a Technical Assistance
Advisement (TAA) concerning the above-referenced taxpayer and
tax issue. Your petition has been carefully examined and the
Department finds that it is in compliance with the requisite
criteria set forth in Rule 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.

FACTS

The Association is a resort condominium consisting of XXX, of
which approximately XXX are operated under a rental program.

REQUESTED ADVISEMENT

The Association seeks confirmation that it is correctly charging
a six percent sales tax and a three percent tourist development
tax on the rental consideration, which includes the cleaning
service charge. Also, the Association wants to confirm that no
tax is due on the purchase of the cleaning services from the
cleaning service providers.

APPLICABLE STATUTES AND RULES

Section 212.03(1) and (2), Florida Statutes (F.S.), provides in
pertinent part:

(1) It is hereby declared to be the legislative intent that
every person is exercising a taxable privilege who engages
in the business of renting, leasing, letting, or granting a
license to use any living quarters or sleeping or
housekeeping accommodations.... For the exercise of such
taxable privilege, a tax is hereby levied in an amount

equal to 6 percent of and on the total rental charged for
such living quarters or sleeping or housekeeping
accommodations by the person charging or collecting the
rental....

(2) The tax provided for herein shall be in addition to the
total amount of the rental, shall be charged by the lessor
or person receiving the rent in and by said rental
arrangement to the lessee or person paying the rental, and
shall be due and payable at the time of the receipt of such
rental payment by the lessor or person, as defined in this
chapter, who receives said rental or payment....

Rule 12A-1.061(3), Florida Administrative Code, provides in
pertinent part:

(3) RENTAL CHARGES OR ROOM RATES.
(a) Rental charges or room rates for the use or possession,
or the right to the use or possession, of transient
accommodations are subject to tax....

(b)1. Rental charges or room rates include any charge or
surcharge to guests or tenants for the use of items or
services that is required to be paid by the guest or tenant
as a condition of the use or possession, or the right to
the use or possession, of any transient accommodation.
Such charges or surcharges are included even when the
charges to the transient guest are:

a. separately itemized on a guest's or tenant's bill,
invoice, or other tangible evidence of sale; or

b. made by the owner or the owner's representative to the
guest or tenant for items or services provided by a third
party.... (Emphasis Supplied)

Section 212.05(1)(j), F.S., provides in pertinent part:

It is hereby declared to be the legislative intent that
every person is exercising a taxable privilege who... rents
or furnishes any of the things or services taxable under

this chapter,....

(1) For the exercise of such privilege, a tax is levied on
each taxable transaction or incident, which tax is due and
payable as follows:

*

*

*

*

*

(j)1. At the rate of 6 percent on charges for all:

a. Detective, burglar protection, and other protection
services (SIC Industry Numbers 7381 and 7382)....

b. Nonresidential cleaning and nonresidential pest control
services (SIC Industry Group Number 734). (Emphasis
Supplied)

Section 718.103(22), F.S., provides, in pertinent part:

(22) "Residential condominium" means a condominium
consisting of condominium units, any of which are intended
for use as a private temporary or permanent residence,
except that a condominium is not a residential condominium
if the use for which the units are intended is primarily
commercial or industrial and not more than three units are
intended to be used for private residence, and are intended
to be used as housing for maintenance, managerial,
janitorial, or other operational staff of the condominium.
With respect to a condominium that is not a timeshare
condominium, a residential unit includes a unit intended as
a private temporary or permanent residence as well as a
unit not intended for commercial or industrial use. With
respect to a timeshare condominium, the timeshare
instrument as defined in s. 721.05(30) shall govern the
intended use of each unit in the condominium. If a
condominium is a residential condominium but contains units
intended to be used for commercial or industrial purposes,
then, with respect to those units which are not intended
for or used as private residences, the condominium is not a
residential condominium. A condominium which contains both
commercial and residential units is a mixed-use condominium

subject to the requirements of s. 718.404. (Emphasis
Supplied)

CONCLUSION

Charges by Association to its guests for the rental of the
resort condominium units are subject to the taxes imposed on
transient accommodations. When the Association rents a unit to
its guest, it separately states each charge for "rental fees,"
"guard fees," "processing fees," and "cleaning," and requires
that the guest pay all separately stated charges. Any
separately stated mandatory charges to the guests are a part of
the total charge to rent the transient accommodations.
Therefore, Association is required to collect sales tax, plus
any locally imposed discretionary sales surtax or tourist tax,
on the total amount charged to the guest.

Sales tax is imposed on charges for nonresidential cleaning
services. Charges for cleaning services to "residential
condominiums," as defined in s. 718.103(22), Florida Statutes,
are considered to be for residential use and are therefore not
taxable, notwithstanding the fact that the rental of a
condominium unit is subject to the transient rental taxes.
Therefore, the purchase of cleaning services by Association for
its residential condominium is not taxable.

Sales tax is imposed on all charges for guard services to
nonresidential or residential facilities, including
nonresidential condominiums. Therefore, the purchase of guard
service by Association is taxable.

This response constitutes a Technical Assistance Advisement
under issued pursuant to s. 213.22, F.S., which is binding on
the Department only under the facts and circumstances described
in your 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, your request, and
related backup documents are public records under Chapter 119,
F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request that your provide the undersigned
with an edited copy of your request for a Technical Assistance
Advisement, the backup material, and this response, deleting
names, addresses, and any other details which might lead to
identification of the taxpayer. Your response should be
received by the Department within 15 days of the date of this
letter.

Sincerely,

Charles Strausser
Revenue Program Administrator II
Technical Assistance and Dispute Resolution

Control # 37591