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Individuals who are members of hotel rewards points programs are not required to pay Florida transient rental tax on rewards points redeemed for a room or room upgrade. The individual is only required to pay tax on charges not covered by the redeemed points.

However, a hotel may owe transient tax on a portion of its revenue related to excess reimbursements from a rewards fund. When a participating hotel receives more in reimbursements from the rewards program fund than it was required to contribute, taxes have not been paid on the funds received in excess of contributions, and the hotel must pay tax on the excess amount. Hotels should determine whether they’ve received more in reimbursements from the fund than it paid in contributions in January of each year using the preceding year’s total contributions and reimbursements. The hotel should take the total reimbursements received in the prior calendar year and subtract the total contributions paid in the prior calendar year, then divide that amount by the total reimbursements received in the prior calendar year. That percentage is then multiplied by the total reimbursements received in the current calendar year. Tax must be remitted on that amount. No “true-up” is required at any point. Special rules apply in the first year a hotel is participating in a rewards program. Any reimbursements subject to tax are to be included on the hotel’s sales and use tax return as part of the hotel’s gross transient rentals and taxable transient rentals. (Rule 12A-1.0615, Effective June 1, 2011; Tax Information Publication, No. 11A01-11, Florida Department of Revenue, December 13, 2011)

(01/17/2012)

The rental or leasing of property in Florida is taxable unless the property is exempt. A 6% tax is assessed on the total rent charged. A Florida Court of Appeals found that the cost of leasehold improvements was not part of the total rent charged to an individual and therefore was not subject to Florida sales and use tax. “Total rent” includes payments made for the privilege to use or occupy property, and it includes base rent, percentage rent, or similar charges. In the case in question, evidence didn’t exist that either party to the lease intended for the cost of leasehold improvements to be part of the total rent charged. As such, the cost of leasehold improvements was not subject to Florida sales and use tax. (Department of Revenue v. Ruehl No. 925, LLC, District Court of Appeal of Florida, First District, No. 1D11-2174, December 30, 2011)

(01/17/2012)

Service plans which were separately stated but sold in conjunction with computer servers are subject to sales and use tax in Florida. Computer servers qualify as tangible personal property. Since they are being sold as part of a tangible personal property sale, the service plans are subject to sales and use tax. Sales tax should be collected by sellers on the entire sale price. (Technical Assistance Advisement, No. 10A-035, Florida Department of Revenue, August 23, 2010)

(12/13/2011)

Sales of speech generating devices, accessories, and extended warranties in Florida are exempt from sales and use tax as long as the purchase was made according to an individual prescription written by a physician. The sale of these items to educational facilities and non-profit organizations is also exempt from Florida sales tax if the sale qualifies for the above exemption. “Prosthetic and orthopedic appliances” qualifying for the sales tax exemption include those devices that alleviate the malfunction of any part of the body. Speech generating devices that are sold to persons with speech impairment (or their caretakers) with a prescription are intended to alleviate the malfunction that causes the impairment. As a result, the devices are exempt from sales and use tax. (Technical Assistance Advisement, No. 10A-047, Florida Department of Revenue, November 16, 2010, released January 2011)

(04/19/2011)

A Florida business that reprocesses, repairs, and refurbishes medical devices and equipment and sells them with a label indicating that the products are refurbished and intended for single use is exempt from Florida sales and use tax on sales of the products. The applicable regulation states that medical products, supplies, or devices sold to hospitals, healthcare entities, and licensed practitioners are exempt when they are dispensed under federal or state law only by the prescription or order of a licensed practitioner and are intended for use on a single patient and not intended to be reusable. The business is required to maintain records evidencing that each product bears the label, “Caution: Federal Law restricts this device for sale by or on the order of a physician…Reprocessed device for single use.” (Technical Assistance Advisement, No. 10A-046, Florida Department of Revenue, November 5, 2010, released January 2011)

(04/19/2011)

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