Florida Senate - 2017                                     SB 820
       By Senator Hutson
       7-01076-17                                             2017820__
    1                        A bill to be entitled                      
    2         An act relating to taxation of the rental of
    3         commercial real property; amending s. 212.031, F.S.;
    4         providing an exemption from the tax for property with
    5         a total annual rental payment under a specified limit;
    6         defining the terms “total annual rental payment” and
    7         “affiliated group”; providing construction; providing
    8         an exception to the exemption; providing
    9         applicability; providing an effective date.
   11  Be It Enacted by the Legislature of the State of Florida:
   13         Section 1. Paragraph (a) of subsection (1) of section
   14  212.031, Florida Statutes, is amended to read:
   15         212.031 Tax on rental or license fee for use of real
   16  property.—
   17         (1)(a) It is declared to be the legislative intent that
   18  every person is exercising a taxable privilege who engages in
   19  the business of renting, leasing, letting, or granting a license
   20  for the use of any real property unless such property is:
   21         1. Assessed as agricultural property under s. 193.461.
   22         2. Used exclusively as dwelling units.
   23         3. Property subject to tax on parking, docking, or storage
   24  spaces under s. 212.03(6).
   25         4. Recreational property or the common elements of a
   26  condominium when subject to a lease between the developer or
   27  owner thereof and the condominium association in its own right
   28  or as agent for the owners of individual condominium units or
   29  the owners of individual condominium units. However, only the
   30  lease payments on such property shall be exempt from the tax
   31  imposed by this chapter, and any other use made by the owner or
   32  the condominium association shall be fully taxable under this
   33  chapter.
   34         5. A public or private street or right-of-way and poles,
   35  conduits, fixtures, and similar improvements located on such
   36  streets or rights-of-way, occupied or used by a utility or
   37  provider of communications services, as defined by s. 202.11,
   38  for utility or communications or television purposes. For
   39  purposes of this subparagraph, the term “utility” means any
   40  person providing utility services as defined in s. 203.012. This
   41  exception also applies to property, wherever located, on which
   42  the following are placed: towers, antennas, cables, accessory
   43  structures, or equipment, not including switching equipment,
   44  used in the provision of mobile communications services as
   45  defined in s. 202.11. For purposes of this chapter, towers used
   46  in the provision of mobile communications services, as defined
   47  in s. 202.11, are considered to be fixtures.
   48         6. A public street or road which is used for transportation
   49  purposes.
   50         7. Property used at an airport exclusively for the purpose
   51  of aircraft landing or aircraft taxiing or property used by an
   52  airline for the purpose of loading or unloading passengers or
   53  property onto or from aircraft or for fueling aircraft.
   54         8.a. Property used at a port authority, as defined in s.
   55  315.02(2), exclusively for the purpose of oceangoing vessels or
   56  tugs docking, or such vessels mooring on property used by a port
   57  authority for the purpose of loading or unloading passengers or
   58  cargo onto or from such a vessel, or property used at a port
   59  authority for fueling such vessels, or to the extent that the
   60  amount paid for the use of any property at the port is based on
   61  the charge for the amount of tonnage actually imported or
   62  exported through the port by a tenant.
   63         b. The amount charged for the use of any property at the
   64  port in excess of the amount charged for tonnage actually
   65  imported or exported shall remain subject to tax except as
   66  provided in sub-subparagraph a.
   67         9. Property used as an integral part of the performance of
   68  qualified production services. As used in this subparagraph, the
   69  term “qualified production services” means any activity or
   70  service performed directly in connection with the production of
   71  a qualified motion picture, as defined in s. 212.06(1)(b), and
   72  includes:
   73         a. Photography, sound and recording, casting, location
   74  managing and scouting, shooting, creation of special and optical
   75  effects, animation, adaptation (language, media, electronic, or
   76  otherwise), technological modifications, computer graphics, set
   77  and stage support (such as electricians, lighting designers and
   78  operators, greensmen, prop managers and assistants, and grips),
   79  wardrobe (design, preparation, and management), hair and makeup
   80  (design, production, and application), performing (such as
   81  acting, dancing, and playing), designing and executing stunts,
   82  coaching, consulting, writing, scoring, composing,
   83  choreographing, script supervising, directing, producing,
   84  transmitting dailies, dubbing, mixing, editing, cutting,
   85  looping, printing, processing, duplicating, storing, and
   86  distributing;
   87         b. The design, planning, engineering, construction,
   88  alteration, repair, and maintenance of real or personal property
   89  including stages, sets, props, models, paintings, and facilities
   90  principally required for the performance of those services
   91  listed in sub-subparagraph a.; and
   92         c. Property management services directly related to
   93  property used in connection with the services described in sub
   94  subparagraphs a. and b.
   96  This exemption will inure to the taxpayer upon presentation of
   97  the certificate of exemption issued to the taxpayer under the
   98  provisions of s. 288.1258.
   99         10. Leased, subleased, licensed, or rented to a person
  100  providing food and drink concessionaire services within the
  101  premises of a convention hall, exhibition hall, auditorium,
  102  stadium, theater, arena, civic center, performing arts center,
  103  publicly owned recreational facility, or any business operated
  104  under a permit issued pursuant to chapter 550. A person
  105  providing retail concessionaire services involving the sale of
  106  food and drink or other tangible personal property within the
  107  premises of an airport shall be subject to tax on the rental of
  108  real property used for that purpose, but shall not be subject to
  109  the tax on any license to use the property. For purposes of this
  110  subparagraph, the term “sale” shall not include the leasing of
  111  tangible personal property.
  112         11. Property occupied pursuant to an instrument calling for
  113  payments which the department has declared, in a Technical
  114  Assistance Advisement issued on or before March 15, 1993, to be
  115  nontaxable pursuant to rule 12A-1.070(19)(c), Florida
  116  Administrative Code; provided that this subparagraph shall only
  117  apply to property occupied by the same person before and after
  118  the execution of the subject instrument and only to those
  119  payments made pursuant to such instrument, exclusive of renewals
  120  and extensions thereof occurring after March 15, 1993.
  121         12. Property used or occupied predominantly for space
  122  flight business purposes. As used in this subparagraph, “space
  123  flight business” means the manufacturing, processing, or
  124  assembly of a space facility, space propulsion system, space
  125  vehicle, satellite, or station of any kind possessing the
  126  capacity for space flight, as defined by s. 212.02(23), or
  127  components thereof, and also means the following activities
  128  supporting space flight: vehicle launch activities, flight
  129  operations, ground control or ground support, and all
  130  administrative activities directly related thereto. Property
  131  shall be deemed to be used or occupied predominantly for space
  132  flight business purposes if more than 50 percent of the
  133  property, or improvements thereon, is used for one or more space
  134  flight business purposes. Possession by a landlord, lessor, or
  135  licensor of a signed written statement from the tenant, lessee,
  136  or licensee claiming the exemption shall relieve the landlord,
  137  lessor, or licensor from the responsibility of collecting the
  138  tax, and the department shall look solely to the tenant, lessee,
  139  or licensee for recovery of such tax if it determines that the
  140  exemption was not applicable.
  141         13. Rented, leased, subleased, or licensed to a person
  142  providing telecommunications, data systems management, or
  143  Internet services at a publicly or privately owned convention
  144  hall, civic center, or meeting space at a public lodging
  145  establishment as defined in s. 509.013. This subparagraph
  146  applies only to that portion of the rental, lease, or license
  147  payment that is based upon a percentage of sales, revenue
  148  sharing, or royalty payments and not based upon a fixed price.
  149  This subparagraph is intended to be clarifying and remedial in
  150  nature and shall apply retroactively. This subparagraph does not
  151  provide a basis for an assessment of any tax not paid, or create
  152  a right to a refund of any tax paid, pursuant to this section
  153  before July 1, 2010.
  154         14. Property for which the total annual rental payment does
  155  not exceed $50,000.
  156         a. For purposes of this subparagraph, the term “total
  157  annual rental payment” means the total of all rental fees
  158  required during the term of the lease divided by the number of
  159  days included in the term of the lease multiplied by 365.
  160         b. The $50,000 threshold is determined by including all
  161  leases between the lessor and lessee. For purposes of this
  162  subparagraph, lessors and lessees include related entities that,
  163  if corporations, would constitute an affiliated group of
  164  corporations, as that term is defined in s. 1504(a) of the
  165  Internal Revenue Code, 26 U.S.C. s. 1504(a).
  166         c. A license to use real property does not qualify for the
  167  exemption provided in this subparagraph.
  168         Section 2. The amendment made by this act to s. 212.031,
  169  Florida Statutes, applies to rental payments due under a lease
  170  on or after January 1, 2018.
  171         Section 3. This act shall take effect January 1, 2018.