The purpose of the proposed amendments to Rule 12A-1.061, F.A.C. (Rentals, Leases, and Licenses to Use Transient Accommodations), is to include the provisions regarding timeshares provided in Chapter 2009-133, L.O.F. This law provides that timeshare ...

DEPARTMENT OF REVENUE
Sales and Use Tax

Rule No. : RULE TITLE :
12A-1.061: Rentals, Leases, and Licenses to Use Transient Accommodations
PURPOSE AND EFFECT: The purpose of the proposed amendments to Rule 12A-1.061, F.A.C. (Rentals, Leases, and Licenses to Use Transient Accommodations), is to include the provisions regarding timeshares provided in Chapter 2009-133, L.O.F. This law provides that timeshare exchanges and fees charged by a third party to facilitate a timeshare exchange are not subject to tax. The law also provides when fees charged to occupy and inspect a regulated short-term timeshare product are subject to tax. When in effect, this rule will provide for the taxability of the purchase of a timeshare interest, the rental of a timeshare accommodation, the occupancy pursuant to the purchase of a regulated short-term product, and the fees charged by timeshare exchange programs.
SUMMARY: The proposed amendments to Rule 12A-1.061, F.A.C. (Rentals, Leases, and Licenses to Use Transient Accommodations), pursuant to Section 212.03(1), F.S., as amended by Section 3, Chapter 2009-133, L.O.F., provide: (1) when consideration paid for the purchase of a timeshare, for the rental or occupancy of a timeshare, and for regulated short-term products is subject to tax; and (2) that consideration paid to an exchange program by a timeshare owner for the use or occupancy of an accommodation is not subject to tax.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. An SERC has not been prepared by the agency.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 212.17(6), 212.18(2), 213.06(1) FS.
LAW IMPLEMENTED: 92.525(1)(b), 119.071(5), 212.02(2), (10)(a)-(g), (16), 212.03(1), (2), (3), (4), (5), (7), 212.031, 212.04(4), 212.08(6), (7)(i), (m), 212.11(1), (2), 212.12(7), (9), (12), 212.13(2), 212.18(2), (3), 213.37, 213.756 FS.
A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: June 1, 2011, 10:00 a.m.
PLACE: 2450 Shumard Oak Boulevard, Building One, Room 2503, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tammy Miller at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Tammy Miller, Senior Attorney, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE FULL TEXT OF THE PROPOSED RULE IS:

12A-1.061 Rentals, Leases, and Licenses to Use Transient Accommodations.

(1) through (3) No change.

(a) through (g) No change.

(h) The following is a non-inclusive list of charges separately itemized on a guest’s or tenant’s bill, invoice, or other tangible evidence of sale that are NOT rental charges or room rates for transient accommodations:

1. through 13. No change.

14. Consideration paid by a timeshare owner for purchase of a timeshare estate, as defined in Section 721.05, F.S. Consideration paid under a timeshare license, as defined in Section 721.05, F.S., is rental charges or room rates and is subject to tax.

14.15. No change.

(4) through (6) No change.

(7) TIMESHARES.

(a) Purchase of a timeshare interest.

1. Consideration paid for the purchase of a timeshare estate, as defined in Section 721.05, F.S., is not rent and is not subject to tax.

2. Consideration paid for the purchase of a timeshare license, as defined in Section 721.05, F.S., is rent and is subject to tax.

(b) Rental of a timeshare accommodation. Consideration paid for the use or occupancy of an accommodation in a timeshare property is rent and is subject to tax. Consideration paid for a regulated short-term product or a timeshare exchange is addressed below.

(c) Regulated short-term products. Consideration paid for occupancy pursuant to a regulated short-term product, as defined in Section 721.05, F.S., is rent and is subject to tax, unless the consideration paid is applied to the purchase of a timeshare estate. Tax is due on the last day of occupancy pursuant to the regulated short-term product.

(d) Timeshare exchange programs.

1. A typical timeshare exchange program allows timeshare owners the right to deposit their timeshares into the exchange program pool. After depositing his or her timeshare into the exchange program pool, an owner may request the use of a different timeshare. An owner making a request will specify the type of unit desired (e.g., one-bedroom, oceanfront) and the location at which he or she would like to stay (e.g., Honolulu, Cancun, Miami), but will generally not request the use of a specific timeshare unit. A timeshare owner who joins an exchange program pays a membership fee to be a part of the exchange program. An owner also pays an exchange fee to request an exchange of a timeshare under the program. The requesting owner may also pay an upgrade fee if the exchange program determines that the requesting owner’s timeshare is of a lesser value than the timeshare being requested.

2.a. Consideration paid for the use or occupancy of an accommodation in a timeshare property by a timeshare owner to an exchange program is not subject to tax.

b. Example: Mr. Smith purchases a two-bedroom timeshare in Orlando and becomes a member of an exchange program. Mr. Smith pays an annual membership fee of $500 to be a member of the exchange program, which must be paid whether or not Mr. Smith requests the use of another timeshare from the exchange program pool. Mr. Smith decides to vacation in Miami, and he submits an exchange request to the exchange program. As part of his exchange request, Mr. Smith specifically requests a four-bedroom timeshare unit. Mr. Smith pays a $99 exchange fee and a $250 upgrade fee to the exchange program for the four-bedroom unit. No tax is due on the membership fee, the exchange fee, or the upgrade fee paid by Mr. Smith.

(7) through (19) renumbered (8) through (20) No change.

Rulemaking Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 92.525(1)(b), 119.071(5), 212.02(2), (10)(a)-(g), (16), 212.03(1), (2), (3), (4), (5), (7), 212.031, 212.04(4), 212.08(6), (7)(i), (m), 212.11(1), (2), 212.12(7), (9), (12), 212.13(2), 212.18(2), (3), 213.37, 213.756 FS. History–Revised 10-7-68, 1-7-70, Amended 1-17-71, Revised 6-16-72, Amended 7-19-72, 4-19-74, 12-11-74, 5-27-75, 10-18-78, 4-11-80, 7-20-82, 1-29-83, 6-11-85, Formerly 12A-1.61, Amended 10-16-89, 3-17-94, 1-2-95, 3-20-96, 11-30-97, 7-1-99, 3-4-01(4), 3-4-01(2), (5), (14), 10-2-01, 8-1-02, 9-1-09, 6-28-10,_________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Tammy Miller, Senior Attorney, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor and Cabinet
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: April 19, 2011
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: A Notice of Rule Development was published in the Florida Administrative Weekly on May 28, 2010 (Vol. 36, No. 21, pp. 2421-2422). A rule development workshop was held June 24, 2010. Comments were received, and changes were made to the proposed rule text. A Notice of Rule Development Workshop was published in the Florida Administrative Weekly on September 24, 2010 (Vol. 36, No. 38, pp. 4559-4560). A rule development workshop was held October 11, 2010. Comments were received, and changes were made to the proposed rule text.