Agenda 07/22/2008 Item #16J 6Agenda Item No. 16,16
July 22, 2008
Page 1 of 10
EXECUTIVE SUMMARY
Recommendation to have the Board of County Commissioners approve the refund
of $4,133.06 to three (3) vendors providing food and drink concessionaire services at
four (4) Parks locations.
OBJECTIVE: To have the Board of County Commissioners approve the refund of
$4,133.06 to three (3) vendors providing food and drink concessionaire services at four
(4) Parks locations. This amount represents sales tax collected on lease payments
received between November 2006 and September 2007.
CONSIDERATIONS: During the September 25, 2007 meeting, the Board of County
Commissioners approved a $12,296.94 refund to five (5) vendors providing food and
drink concessionaire services at seven (7) Parks and Library locations. The refund
became necessary due to a sales tax exemption for concessionaires providing food and
drink services at recreational facilities. Subsequently, Collier County filed an application
for refund with DOR, which represented sales tax collected on lease payments received
from November 2003 through October 2006. This period was selected due to DOR
regulations limiting the amount eligible for refund to a three year period prior to the filing
date. The DOR Refund Division approved this application for refund in August 2007.
While waiting for the DOR Refund Division to review this application for refund, Collier
County continued to collect and remit sales tax on the concessionaire lease payments.
This period covered November 2006 (application filing date) to August 2007 (DOR
approval date). Since DOR approved the application for refund, the sales tax collected
from November 2006 to August 2007 should also be refunded back to each
concessionaire. During this period, there were three (3) vendors operating at four (4)
Parks locations under contract with the County to provide food and drink concessionaire
services. These vendors (locations) were:
• Day -Star Unlimited, Inc. d/b /a Cabana Dan's (Vanderbilt Beach)
• Recreational Facilities of America, Inc. ( Barefoot Beach & Tigertail Beach)
• That's Amore' in Napoli, Inc. (Golden Gate Aquatic Center)
Collier County filed a second application for refund in the amount of $4,133.06 with the
DOR Refund Division on November 21, 2007. The Clerk of Courts Finance Department
has received confirmation from the DOR Refund Division that a refund in this amount
will be issued to Collier County pending receipt of proof that the County has refunded the
sales tax to each vendor.
For further information regarding the criteria used to determine the eligibility to receive
refunds of sales tax collected on concessionaire lease payments, please see the Executive
Summary from the September 25, 2007 meeting (included).
Agenda I!em No. 16J6
July 22. 2008
Page 2 of 10
FISCAL IMPACT: The total amount of the refund is $4,133.06. This amount has been
authorized for refund by DOR so there will be no fiscal impact to the County. The
breakdown by vendor is as follows:
TOTAL = $4,133.06
GROWTH MANAGEMENT IMPACT: There will be no growth management impact
with this refund.
RECOMMENDATION: Board of County Commissioners: 1) approve the refund of
$4,133.06 to three (3) vendors providing food and drink concessionaire services at four
(4) Parks locations; 2) approve the sales tax refund request submitted to the DOR Refund
Division; and 3) recognize the refund as revenue when funds are received from the DOR
Refund Division.
PREPARED BY: Clerk of Courts Finance Department
Attachments: TAA #07A -002
September 25, 2007 Agenda Item 16 J 5 Executive Summary
Contract
Total Sales
Concessionaire
Collier County Facility
Status
Tax Collected
1) Day -Star Unlimited Inc.
Vanderbilt Beach
Current
$1,178.54
d/b /a Cabana Dan's
2) Recreational Facilities
Barefoot Beach
Current
$720.43
of America, Inc.
Ti ertail Beach
Current
$1,874.84
3 That's Amore' in Napoli, Inc.
Golden Gate Aquatic
Current
1 $359.25
TOTAL = $4,133.06
GROWTH MANAGEMENT IMPACT: There will be no growth management impact
with this refund.
RECOMMENDATION: Board of County Commissioners: 1) approve the refund of
$4,133.06 to three (3) vendors providing food and drink concessionaire services at four
(4) Parks locations; 2) approve the sales tax refund request submitted to the DOR Refund
Division; and 3) recognize the refund as revenue when funds are received from the DOR
Refund Division.
PREPARED BY: Clerk of Courts Finance Department
Attachments: TAA #07A -002
September 25, 2007 Agenda Item 16 J 5 Executive Summary
Page 1 of 1
Agenda Item No. 16J6
July 22, 2008
Page 3 of 10
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COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
16J6
Item Summary:
Recommendation that the Board of County Commissioners approves the refund of $4.133.06
to three (3) vendors providing food and drink concessionaire
services at four (4) Parks
locations.
Meeting Date:
7/22/2008 9 00:00 AM
Prepared By
Ronald Dorton
Senior Internal Auditor
Date
Clerk of Courts
Clerk's Finance
7/3/2008 11:31:38 AM
Approved By
Crystal Kinzel
Director of Finance
Date
Clerk of Courts
Finance
71312008 12:36 PM
Approved By
John A. Yonkosky
Director of the Office of Management
Date
County Manager's Office
Office of Management & Budget
711412 00 8 10:22 AM
Approved By
James V. Mudd
County Manager
Date
Board of County
Commissioners
County Manager's Office
7/14/2008 11:00 AM
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DEPARTMENT
OF REVENUE
Jim Zingale
Executive Director
Crystal K. Kinzel
Finance Director
February 19, 2007
Collier County Clerk of the Circuit Court
3301 Tamiami Trail East
P.O. Box 413044
Naples, Florida 34101 -3044
Re: Technical Assistance Advisement 07A -002
Collier County ( "County ")
Concessionaire Services at Publicly Owned Recreational Facilities
Sales and Use Tax
Section 212.031, Florida Statutes ( "F.S. ")
Dear Ms. Kinzel:
Aoenda Item No. 16J6
July 22 2008
Page 4 of 10
General Tax Administration
Child Support Enforcement
Property Tax Administration
Administrative Services
Information Services
This response is in reply to your letter dated December 19, 2006, requesting the
Department's issuance of a Technical Assistance Advisement ( "TAA ") pursuant to
Section 213.22, F.S., and Rule Chapter 12 -11, F.A.C., regarding the Department's
position on the issue of the exemption found in Section 212.031(1)(a)l0., F.S. An
examination of your letter has established that you have complied with the statutory and
regulatory requirements for issuance of a TAA. Therefore, the Department is hereby
granting your request for issuance of a TAA.
Along with your letter, you provided us with a copy of "concession agreements" between
County and food and drink concessionaires operating at County- owned: beaches; aquatic
center; and library.
ISSUE
Is the consideration paid to County by persons providing food and drink concessionaire
services within the premises of publicly owned recreational facilities exempt from
Florida sales tax by Section 212.031(l)(a)10., F.S.?
O
G�\J� p01
a
Tallahassee, Florida 32399 -0100
Agenda Item No. 16J6
July 22, 2008
Technical Assistance Advisement Page 5 of 10
Page 2
FACTS
County has entered into "concession agreements" with various persons who provide food
and drink concessionaire services at Comity owned facilities. The facilities include
beaches ( "Tigertail Beach," "Vanderbilt Beach," and "Barefoot Beach "), an aquatic
center ( "Golden Gate Aquatic Center ") and a library (the "Orange Blossom Library ").
Each of the facilities is owned by County.
Your letter of December 19, 2006, provides, in part:
The lease agreement with each concessionaire contains a "Scope ",
"Consideration ", and "Use of Facility" section. The "Scope" section states that
the County grants the limited right for the concessionaire to operate at a
designated location. Furthermore, the section defines the services to be provided
by the concessionaire, including the sale offood and /or beverages. The
"Consideration" section states that the concessionaire shall remit to the County, a
percentage of the total gross revenue of the concessionaire's business, including
the sale of food, beverage and sundry concession operation as follows: a flat fee
or percentage of gross receipts (except sales tax) whichever is greater. The
applicable Florida State Sales Tax on payments to the County shall be added to
the concessionaire's payment and forwarded to the County as part ofsaid
payments. Said payments shall be tendered to the County by the 15th of each
month for the preceding month. The "Use of Facility" section states that the
facility is for the use of the public for recreational and other public purposes.
[italics in original]
REQUESTED ADVISEMENT
Your letter of December 19, 2006, provides that County "... is requesting a Technical
Assistance Advisement regarding the sales tax exemption for rental /license fees assessed
on concessionaire contracts operating at publicly owned recreational facilities"
APPLICABLE STATUTES AND RULES
Section 212.031, F.S., provides in part:
(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:
Agenda Item No. `6J6
July 22, 2008
Technical Assistance Advisement Page 6 of 10
Page 3
10. Leased, subleased, licensed, or rented to a person providing food and drink
concessionaire services within the premises of a convention hall, exhibition hall,
auditorium, stadium, theater, arena, civic center, performing arts center, publicly
owned recreational facility, or any business operated under a permit issued
pursuant to chapter 550....
The issue presented in your request is whether the consideration received by County from
concessionaires providing food and drink services at County owned recreational facilities
is exempt from Florida sales tax.
Persons engaging in the business of renting, leasing, letting, or granting licenses for the
use of any real property are exercising a taxable privilege. See Section 212.031, F.S. An
exemption from the tax otherwise imposed for this privilege involves property that is
leased, subleased, licensed or rented to persons providing food and drink concessionaire
services within the premises of a publicly owned recreational facility. See Section
212.031(1)(a)10., F.S. "Exemptions to taxing statutes are special favors granted by the
Legislature and are to be strictly construed against the taxpayer." State ex rel. Szabo Food
Services, Inc. v. Dickinson, 286 So. 2d 529, 530 (Fla. 1973).
Because no definition of "recreational facility" is provided by statute, it is necessary to
look to principles of statutory construction. Words of common usage, when used in a
statute, should be construed in their plain and ordinary sense. Pederson v. Green, 105
So.2d 1 (Fla. 1958).
The word "recreation" is defined in Merriam - Webster's Collegiate Dictionary (Tenth
Edition, 1999) as meaning:
... refreshment of strength and spirits after work; also: a means of refreshment or
diversion: HOBBY — recreational ... adj
Merriam - Webster's defines the word "facility" as meaning:
... something (as a hospital) that is built, installed, or established to serve a
particular purpose. Id.
We also note that no definition of the word "concessionaire" is provided by statute.
Merriam - Webster's Collegiate Dictionary (Tenth Edition, 1999) defines "concessionaire"
as meaning:
[T]he owner or operator of a concession; esp: one that operates a refreshment
stand at a recreational center.
County's beaches, aquatic centers and libraries all fall within the plain and ordinary
meaning of `recreational facility," as each is a place built, installed or established to serve
Technical Assistance Advisement
Page 4
Agenda Item No. 16,16
July 22, 2008
Page 7 of 10
the purposes of refreshing strength and spirit and for providing diversion. The beaches,
aquatic center and library are publicly owned (i.e., owned by County). The persons
granted the right to provide food and drinks at these facilities are concessionaires.
The consideration paid by the concessionaires to County, at County -owned beaches
(specifically, "Tigertail Beach," "Vanderbilt Beach," and "Barefoot Beach "), aquatic
center ( "Golden Gate Aquatic Center ") and library (the "Orange Blossom Library ") is not
subject to Florida sales tax (otherwise imposed by Section 212.031, F.S.) because the
"concession agreements" fall within the scope of the exemption found at Section
212.031(1)(a)10., F.S.
This response constitutes a Technical Assistance Advisement under Section 213.22, F.S.,
which is binding on the Department only under the facts and circumstances described in
the request for this advice as specified in Section 213.22, F.S. Our response is predicated
on 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 than 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 Section 213.22, F.S. Confidential information must be deleted before
public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for 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.
SZ_ , a2
Eric �R•.- PPeeate
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922 -4714
Ctrl # 27389
Agenda Item No. 16,16
July 22, 2008
: zs .o`
EXECUTIVE SUMMARY
Recommendation to have the Board of County Commissioners approve the refund
of $12,296.94 to five (5) vendors providing food and drink concessionaire services at
seven (7) Parks and Library locations.
OBJECTIVE: To have the Board of County Commissioners approve the refund of
512.296.94 to five (5) vendors providing food and drink concessionaire services at seven
(7) Parks and Library locations. This amount represents sales tax collected on lease
payments received during a three (3) year period, as limited by the Florida Department of
Revenue.
CONSIDERATIONS: Florida Statute 212. 031(1)(a)10 allows for an exemption from
paying sales tax on lease payments if "such properr is leased, sub - ];.aced, licensed, or
rented to a person providing food and drink concessionaire services within the premises
of a ... publicly owned recreational facility. ".
The Clerk of Courts Finance Department (Clerk's Finance) has reviewed contracts on file
to identify vendors providing 'rood and drink concessionaire services at County owned
recreational facilities. This review identified seven (7) contracts (both in effect and
expired) with five (5) different vendors operating at various Parks & Recreation and
Library facilities:
• Cool Concessions. Inc. (Caxambas Pass Marina & TigcrtaiI Beach)
• Day -Star Unlimited. Inc. d;b;'a Cabana Dan's (Vanderbilt Beach)
• Recreational Facilities of ,America. Inc. ( Barefoot Beach & Tigertail Beach)
• That's Amore' in Napoli, Inc. (Golden Gate Aquatic Center)
• Paradise Consultant's, Inc. (Orange Blossom Librar))
These vendors are required by contract to pay Collier County either a flat fee or a
percentage of gross receipts, whichever is greater (e.g. S500 or 12% of monthly gross
receipts). This amount constitutes the vendor's monthly lease payment. Clerk's Financc
then evaluated whether each vendor is paying sans tax on these lease payments. A
review of documentation on file confirmed that each vendor is paying 6-00% sales tax on
the lease payment amount. Collier County has been collecting sales tax on these
payments, with the funds remitted to the Florida Department of Revenue (DOR) on a
monthly basis. Based on the Fiorida Statute cited previously, Clerk's Finance concluded
that these ]ease payments are exempt from sales tax,
In order to clarify our inte :p;vtatirn, Clerk's Finance requested a Technical Assistance
Advisement (TAA) from the DOR LcLal Division. After reviewing each vendor's
concessionaire ]ease agreement, the DOR Lcgal Division issued TAA :Li07A -002 that
n reod with Clerk's Finance conclusion that these ]case payments are exempt from sales
tax.
Agenda Item No. 16,16
July 22, 2008
7
The DOR Refund Division agraed that a sales tax refund is in order. However, the DOR
Refund Division does not refund sales tax directly to an individual or business, but rather
to the governmental units that collect and remit sales tax. Also, the DOR Refund
Division requires proof that the governmental units have refunded the sales tax to the
vendors prior to giving any refund.
Clerk's Finance has received verbal confirmation that the DOR Refund Division will
refund the requested amount to Collier County once it receives proof that the County has
refunded the sales tax to each vendor.
Clerk's Finance has consulted with the County Attorney's Office and determined that the
vendors' concessionaire agreements do not need to be amended.
FISCAL IMPACT: The total amount of the refund is SI2?96.94. The DOR Refund
Division limits sales tax refunds to a period of three (3) years prior to the date the refund
request was filed. Consequently, the refund encompasses the period of November 2003
to October 2006. The breakdo\cn by vendor is as lollows:
TOTAL= 512,296.94
GROWTH MANAGEMENT IMPACT: There will be no Lrowth mana -ement impact
with this refund.
RECOMMENDATION, The Clerk of Courts Finance Department recommends that the
Board of County Commissioners: 1) approve the refund of S 12?96.94 to five (5) vendors
providing food and drink concessionaire services at seven (7) Parks and Library
locations: 2) approve the sales tax refund request submitted to the DOR Refund Division;
and 3) recognize the refund as revecuc %ahon funds are received from the DOR Refund
Division.
PRFPARFD BY: Clerk of Courts Finance Department
Attachments: TA.A =i017A -003
Contract
Total Sales
Concessionaire
Collier Counh, Facility
Status
Tax Collected
1) Cool Concessions, Inc.
Caxambas Pass Marina
Terminated
TiRertail Beach
Terminated
54 O1 I.08
2) Day -Star Unlimited Inc.
Vanderbilt Beach
Current
53.810.70
drb:'a Cabana Dan's
3) Recreational Facilities
Barefoot Beach
Current
52,038.97
of America. Inc.
Tiuetail Beach
CUITent
5343.74
4) That's ,Amore' in Na. oli. Inc.
Golden Gate Aquatic
Current
$1,636,.45
5) Paradise Consultants• hhc.
Oran *e Blossom Library
Teminated
$456.00
TOTAL= 512,296.94
GROWTH MANAGEMENT IMPACT: There will be no Lrowth mana -ement impact
with this refund.
RECOMMENDATION, The Clerk of Courts Finance Department recommends that the
Board of County Commissioners: 1) approve the refund of S 12?96.94 to five (5) vendors
providing food and drink concessionaire services at seven (7) Parks and Library
locations: 2) approve the sales tax refund request submitted to the DOR Refund Division;
and 3) recognize the refund as revecuc %ahon funds are received from the DOR Refund
Division.
PRFPARFD BY: Clerk of Courts Finance Department
Attachments: TA.A =i017A -003
rt!.CA16hda Item No. 16J6
July 22, 2008
Page 10 of 10
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