CAO 03-04 Pelican DevelopmentCITY OF MIAMI BEACH
CITY ATTORNEY'S OFFICE
TO:
FROM:
DATE:
SUBJECT:
Jorge M. Gonzalez
City Manager
Murray H. Dubbin.. ,~t~ 1~
City Attorney
March 14, 2003
CAO NO. 03-04
Request for Legal Interpretation regarding Sales Tax on Rent for Pelican
Development, L.L.C. per Lease Agreement dated 12/1/99
(Parking Garage at l0th Street and Collins Avenue)
The facts restated are:
Pelican Development L.L.C. is the prime lessee of a Parking Garage. The
City is lessor.
Pelican in the course of its business rents parking spaces to motor vehicle
operators.
Pelican has become registered as a dealer and has obtained a Certificate of
Registration as a Dealer (resale certificate) and (we are advised) files monthly
reports and pays the Florida Department of Revenue the prescribed sales tax,
which it collects from vehicle operators who park on the premises.
The question as I understand it is:
Is Pelican obligated to pay the rental tax to the City based upon its rental payment
under its Lease from the City?
ANSWER. F.S. Section 212.03 (6) provides:
(6) It is the legislative intent that every person is engaging in a taxable
privilege who leases or rents parking or storage spaces for motor vehicles in
parking lots or garages, who leases or rents docking or storage spaces for
boats in boat docks or marinas, or who leases or rents tie-down or storage
space for aircraft at airports. For the exercise of this privilege, a tax is hereby
levied at the rate of 6 percent on the total rental charged.
F.S. Section 212.031 (1) (a) 3 provides:
(1)(a) It is 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 for the use of any real property unless such property is:
3. Property subject to tax on parking, docking, or storage space under
Section. 212.03 (6).
F.S. Section 212.031 (2) (b) provides:
(b) It is the further intent of this Legislature that only one tax be collected on
the rental or license fee payable for the occupancy or use of any such
property, that the tax so collected shall not be pyramided by a progression of
transactions, and that the amount of the tax due the state shall not be
decreased by any such progression of transactions.
Accordingly, by the clear language of the Statutes under the above facts, the only tax payable
is by the motor vehicle operators who park in the garage. Said tax is collected by Pelican and
transmitted to the State Department of Revenue. Pelican is not obligated to pay rental tax on
the prime lease under these circumstances.
However, during the period that the garage was under construction and not in operation as a
parking garage, sales tax was payable by the prime tenant, Pelican. Further, a portion of the
property is used for retail non parking purposes. The rental tax on that portion of the property
is treated differently.
Further, I have discovered that Pelican, being faced with this exact issue in November 2001,
applied to the Technical Assistance and Dispute Resolution Division of the Department of
Revenue for an opinion on this issue (letter of November 6, 2001 enclosed).
The Department responded with an informal opinion on November 21, 2001 (copy enclosed).
The response letter is self explanatory. I am somewhat surprised that a copy of that letter is
not in the Administration's possession.
Unless there are facts, other than those stated at the beginning of this memo, this should
provide you with the advice you need to correct the books and records of the City.
MHD:lm
Encl.
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DEPA[k'TMENT
November 22, 2002
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