Florida Sales Tax on Ticket Sales for the Sunshine State’s Nonprofits

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Cory D. Halliburton

Cory D. Halliburton



Cory Halliburton serves as general counsel and business adviser to a nationwide nonprofit / tax-exempt client base, as well as for multi-state professional service companies. He is a results-oriented attorney, with executive-level strategy and an understanding of the intersection of law and business judgment. With a practical upbringing, he pushes for process-driven results in internal governance, strategy and compliance with employment law, and complex or unique contracts and business relationships.

He dedicated the first ten years of his practice to mainly commercial litigation matters in West Texas and the Dallas-Fort Worth Metroplex. During that experience, Mr. Halliburton transitioned his practice to a more general counsel role, with an emphasis on nonprofit and tax-exempt organizations, advising those organizations through formation, dissolution, litigation, governance, leadership succession, employment law, contracts, intellectual property, tax exemption issues, policy creation, mergers and other. He has served as borrower’s counsel for tax-exempt bond and loan transactions near $100 million aggregate; some with complex pre-issue construction, debt payoff and other debt financing challenges.

Mr. Halliburton also serves as outside legal and business advisor for executive professionals in multi-state engineering firms, with a focus on drafting and counsel on significant service agreements, employment law matters, and protection of trade secrets.

Sales tax . . .  A (if not the most) commonly overlooked tax for nonprofit organizations.  This Freeman Law Insights blog focuses on sales tax regime applicable to “admissions” collected by or for nonprofit organizations in the State of Florida.

General Rule. The state of Florida imposes a tax on “admissions,” which is defined as the net sum of money for admitting a person to any place of amusement, sport, or recreation, including theaters, outdoor theaters, shows, exhibitions, games, races, or any place where charge is made by way of sale of tickets.  See Fla. Stat. §§ 212.02(1), 212.04(1)(b). The tax is required to be collected by every person who exercises the privilege of selling or receiving anything of value by way of admissions. Id. § 212.04(1)(a), (b).

Exception for 501(c)(3) Organizations. No tax is levied on dues, membership fees, and admission charges solely imposed by a not-for-profit sponsoring organization. See id. § 212.04(2)(a)(2); Fla. Admin. Code Ann. § 12A-1.005(2)(f). To receive this exemption, the sponsoring organization must qualify as a not-for-profit entity under I.R.C. § 501(c)(3). Fla. Stat. § 212.04(2)(a)2.; Fla. Admin. Code Ann. § 12A-1.005(2)(f).

Co-Promotion of Events. In Fla. Tech. Assistance Advisement No. 09A-051 (Oct. 8, 2009) the Florida agency held that an event co-promoted by a governmental body and a non-profit organization did not qualify for exemption because the governmental body is not a qualified organization under section 501(c)(3) of the Internal Revenue Code. The agency noted:

[T]he event was not solely sponsored by the Foundation, and the admissions were not solely imposed by the Foundation. Rather, as expressed in the agreement . . . , both parties were responsible for imposing and collecting the ticket charges regarding this issue. Therefore, since the exemption must be narrowly construed against the taxpayer seeking the exemption, the event in question does not qualify for the exemption found in Section 212.04(2)(a)2.a., F.S.

Agency Liability for Tax on Admissions.  Under the Florida Administrative Code:

An agent who collects admissions on behalf of a principal may forward the collected tax funds to the principal to be remitted by the principal to the Department. Both the principal and agent can be held liable for any failure to timely remit such tax funds to the Department. An agent shall not, however, be liable for its principal’s failure to timely remit tax funds to the Department if [1] the agent has obtained the principal’s active Florida sales tax number and [2] has disclosed in writing to the principal that when such agent remits proceeds from the sale of an admission to the principal the proceeds may include amounts that represent admissions tax and that it is the principal’s obligation to timely remit any taxes due and owing to the Department or other taxing authority.

Fla. Admin. Code Ann. § 12A-1.005(2)(f) (emphasis added).

That Administrative Code provision does not indicate if sales tax is owed for the admissions collected by the agent – the provision merely relieves the agent of responsibility, if an agency relationship exists and the noted requirements are met.

Technical Assistance Advisement No. 17A-024 fills that gap, albeit on a non-precedential basis. In that Advisement, the Florida Department of Revenue provides non-precedential guidance stating that admissions that an agent that collects on behalf of a nonprofit organization that is exempt from tax under Florida Statutes § 212.04(2)(a)(2) may also qualify for exemption from tax if the requirements of Florida Administrative Code § 12A-1.005(2)(f) are met. See Fla. Tech. Assistance Advisement No. 17A-024 (Dec 28, 2017); see also Fla. Stat. § 213.22(1) (stating that technical assistance advisements have “no precedential value except to the taxpayer who requests the advisement and then only for the specific transaction addressed in the technical assistance advisement, unless specifically stated otherwise in the advisement.”).

The facts in the Technical Assistance Advisement No. 17A-024 are, in relevant part, as follows:

The contract is with Licensor/Agent. Licensor/Agent rents the performance center to Taxpayer for the performance events. Taxpayer pays Licensor/Agent a flat rental fee and a rental charge for fifteen percent (15%) of the gross receipts of ticket sales. The contract provides that Licensor/Agent will act as the Taxpayer’s agent in connections with the collection of sales revenue from the sale of admission tickets for Taxpayer. Licensor/Agent has the right to collect fees for when making sales on Taxpayer’s behalf. The contract requires Taxpayer to remit sales taxes collected on the sale of admission tickets. Taxpayer understands that Taxpayer will be required to collect and remit sales tax on Taxpayer’s sales of tangible personal property.

In the analysis, the state agency held:

The exemption provided by s. 212.08(7)(p), F.S., only applies to the purchases and leases made by Taxpayer. The exemption does not apply to the sales of admissions, sales of tangible personal property, sales of taxable services, or rental income of Taxpayer. Section 212.04, F.S., requires admission providers and collectors of the admission to charge and collect the sales tax on the sales price or actual value received from the sale of admissions.

Section 212.04(2)(a)2., F.S., provides an exemption for a not-for-profit entity under s. 501(c)(3) of the Internal Revenue Code of 1954, such as Taxpayer. Therefore, the sales of admission tickets by Taxpayer are not subject to sales tax. When Taxpayer makes sales of admission tickets through its agents, such as Licensor/Agent, the sale of admission tickets may qualify for the exemption provided by s. 212.04(2)(a)2., F.S. The actions of Taxpayer and Agent must comply with Rule 12A-1.005(1)(c)2., F.A.C. Based on the contract provided, Taxpayer’s admission ticket sales made through Licensor/Agent are not subject to sales tax.

Sales of food and tangible personal property by Taxpayer and Agent are subject to sales tax.

Fla. Tech. Assistance Advisement No. 17A-024 (Dec 28, 2017).

Insights. Nonprofit organizations—whether in Florida or other states—are wise to engage competent legal counsel to evaluate their potential sales tax liabilities arising from admissions from events, concerts, and the like. Contract terms and review is critical on this subject and others. Speaking from much experience, sales tax is but one of many considerations to take into account for liability exposure in these types of events or programs.

My Freeman Law colleague and sales tax guru, TL Fahring, contributed greatly to this blog and our collective effort to serve Freeman Law’s nonprofit clients throughout the country.