What is the Tourist Development Tax?

1. What is the Tourist Development Tax? It is the tax on the total rental amount collected from any person who rents, leases, or lets for consideration any living quarters or accommodations in any hotel, apartment hotel, motel, resort motel, apartment, apartment motel, rooming house, mobile home park, recreational vehicle park, condominium, or timeshare resort for a term of 6 months or less. The renting of such property is a privilege, which is subject to taxation, and the requirements and conditions of that taxation are set forth by the State of Florida, as well as various county governments within the state. F.S. 125.0104 (3) (a)1 - (tab 8)

2. Who Must Pay? • Anyone who rents or leases transient accommodations (e.g. hotel, bed & breakfast, apartment, motel, townhouse, condominium, timeshare, rooming house, mobile home, single family home, beach house or cottage) for a period of six(6) months or less must pay the Tourist Development Tax. • F.S. 212.03 (1)(a) - (tab 10)

3. How do you register a customer? • Each county creates it’s own registration form. New accounts must complete an application to have an account established. • Some counties have their application on line and direct the dealer to complete it and submit it by mail. They also send applications to those who call in and don’t choose to use the internet. Walk-ins are given an application in person with instructions for registering. • The Department of Revenue has it’s application on line and directs the dealer to complete and submit it by e-mail.

4. When is the tax due? • Taxes are due on the first day of the month following each collection period. Taxpayers are required to file a return regardless of the amount of collection (including zero tax returns). Depending on the collection agent the periods could be monthly, quarterly, semi-annually, or annually. Tax returns are considered delinquent and subject to penalties and interest if postmarked after the 20th of the month in which the tax is due and if the tax is not filed. • F.S. 212.15 (1) (tab 14) • Business Owner’s Guide pg. 15 (tab 22)

5. What compensation is given to owners and operators for collecting and submitting Tourist Development Taxes on time? • A collection allowance of 2.5% of the tax collected, or $30.00 maximum, is compensation for recording, accounting, and remitting the tax on time. • F.S. 212.12 (1) - (tab 11) • F.A.C. 12A-1.056 (2) – (tab 14) • Business Owner’s Guide pg. 8 – (tab 22)

6. Do travel trailer camps, mobile home parks, and recreational vehicle parks pay this tax? • If more than half of the rental units are occupied by tenants who have continually resided there for over three months they are exempt. A DR-72-2 must be filed with Department of Revenue. • F.S. 212.03 (7) (c), (tab 10)

7. Who is Exempt? • Exemptions (Tab 10) • Federal Government Workers: If you are an employee of the federal government and are traveling in an official capacity, you are entitled to take an exemption if you present either (1) a copy of your official federal government travel orders or (2) you provide a sworn written statement affirming that the United States government will pay the hotel bill directly or will be reimbursing you for the hotel charges. You may obtain the appropriate exemption form from the hotel. The hotel must retain a copy of the completed form as proof that you are exempt. See Federal Employee Exemption Form. F.A.C. 12A-1.061(13) & 12A-1.038(2) – (tab 10)

8. Florida State Government Workers: If you are an employee of Florida state government, its departments and institutions, and its political subdivisions, and you are traveling in an official capacity, you are entitled to an exemption only of the hotel charges that are billed directly to and paid by your respective agency, but not if the traveler is reimbursed for the expense. • F.A.C. 12A-1.061(13) & 12A-1.038(2) – (tab 10)

9. Foreign Diplomats: If you are a foreign diplomat, we can accept only the white plastic sales tax exemption card with the blue stripe (form 1-74-ds-819). The exemption card is issued to you by the U.S. Department of State and exempts you from the Florida tax on occupancy.

10. United States Armed Forces Personnel: If you are on active duty in the United States Armed Forces and are traveling pursuant to federal government travel orders, you may receive a tax exemption by completing a sworn statement to that effect and presenting a copy of the orders to the hotel. • F.A.C. 12A-1.061(11) – (tab 10) • You may obtain the appropriate form from the hotel. The hotel must retain the completed form as proof that you are exempt. See Military Exemption Form.

11. Religious, charitable, educational, veterans or scientific organizations, federal or state chartered credit unions,* Florida Retired Educators Association or local chapters thereof, or organizations that provide special educational and social benefits to minors: If you are an employee of a religious, charitable, educational, veterans or scientific organization, federal or state chartered credit union, Florida Retired Educators Association or local chapter thereof, or an organization that provides special educational and social benefits to minors, you may receive a tax exemption if • (1) your organization holds a consumer’s certificate of exemption issued by the Florida Department of Revenue and (2) the hotel charges are paid directly by your organization. An exemption will not be granted if you personally pay with cash, check, or credit card for which you will be reimbursed. In order to obtain your exemption, you should produce either a copy of your consumer’s certificate of exemption or some other document that displays your exemption number. The hotel must retain a copy of the certificate and proof of payment. • F.A.C. 12A-1.061(13) & F.S. 212.03 (7) (a) - (tab 10)

12. Full Time Students: Students enrolled in an institution offering post secondary education, who reside in transient accommodations, are exempt. A “full-time student” is one taking a total number of hours or courses considered by the educational institution to constitute full-time enrollment. A written declaration of an appropriate official from the educational institution declaring the student is a full time student is considered proof. See Full-time Student Exemption Form. • F.A.C. 12A-1.061 (10) - (tab 10) • F.S. 212.03 (7) (a) – (tab 10)

13. Exemption for Continuous Residence: Any person who has continuously resided at the same location for a period longer than 6 months and has paid the tax for the first 6 months is exempt from the tax after this period as long as the person continues to reside at the same accommodation. Once the person moves, the exemption no longer applies. On the county tax return you would include only the rents for the first six months, which are taxable. Starting in the seventh month omit their rents from the county tax return entirely since in the seventh month they would no longer be considered a short-term rental. • F.A.C. 12A-1.061(14) (a) - (tab 10)

14. Bona Fide Written Lease: Any person who rents over 6 months with a bona fide written lease is exempt from the tax and should not be included on the county tax return because only short-term rentals are required to be reported to the county. The state requires a reporting of both long-term rentals and short-term rentals on it’s tax return. • F.A.C. 12A-1.061 (15) - (tab 10)

15. Migrant Labor Camps • F.S. 212.03 (7) (d) - (tab 10) • F.A.C. 12A-1.061 (1) (a) - (tab 10) • Business Owner’s Guide pg. 12 - (tab 22)

16. If I rent to a resident of Florida do I have to collect the Tourist Development Tax since the renters are not Tourists? • Yes. This is considered an “Accommodation Tax” and is applicable to all transient guests, whether or not they are residents of Florida. • F.S. 125.0104 (3)(a)(1) - (tab 8)

17. I rent my property on the internet. Are internet rentals taxable? • Yes, taxability is based on the location of the rental property, not the location of the financial transaction. • F.S. 125.0104 (3)(2.a) - (tab 8)

18. Do I have to collect Tourist Development Tax (TDT) on the cleaning fee I charge my guests? • Yes, if the charge is mandatory. Examples include charges for cleaning, amenities, extra persons, in-room safes, refrigerators, and microwaves. Non-refundable pet fees as well as application fees (if used to offset rent) are also subject to Tourist Development Tax. • F.A.C. 12A-1.061 (3) (b) (1) - (tab 10)

19. What are the Retention requirements for Tourist Development Tax Records? • A. Record copy. Permanent. 5 fiscal years provided applicable audits have been released. • B. Duplicates. Retain until obsolete, superseded, or administrative value is lost. • General Records Schedule - (tab 23)

20. What are charges that are not subject to the Tourist Development Tax? • Charges for telecommunication services, including facsimile services. • Charges for television system program services, including charges for movies and videotapes, meals and beverages, whether served in the guest’s accommodation or served at a restaurant, and charged to the guest’s accommodation bill. • Food, drinks, and other items, such as combs, shampoo, playing cards, aspirin, or similar items purchased through a refrigerator or other device located within a guest’s accommodation. • Charges for the use of safes or safety deposit boxes located at an establishment’s registration desk. (In-room safes are subject to the Tourist Development Tax).

21. Charges, fines, or damage fees for lost or damaged items, such as room keys, towels, linens, dishes, silverware, or other similar items. • Charges for admissions, such as golf, tennis, cultural or events, billed separately to a guest’s accommodation bill. Charges for transportation services. • Laundry services charged to a guest or tenant’s accommodation bill. • Valet service charged to a guest or tenant’s accommodation bill. • Merchandise packaging or delivery service charged to a guest’s accommodation bill, such as flower delivery services or charges for packaging and delivering items for shipment under the direction of the guest. • F.A.C. 12A-1.061 (3) (h) (1-15) - (tab 10)

22. Do they have to pay sales tax? • Yes, but we do not collect the sales tax. Taxpayers are also charged Florida Sales & Use Tax by the Florida Department of Revenue. For more information they should call the Department of Revenue. (tab 4) • State sales tax is 6% plus any discretionary tax required for your county. • www.myflorida.com/dor/taxes/registration.html

23. Their property is used by friends and relatives at times during the year. Are they required to collect Tourist Development Tax? • Yes, if they collect rent, or accept any form of compensation in lieu of rent. (Bartering) • F.S. 125.0104 - (tab 8)

24. If a customers rentals are handled by a property management company, what are their Tourist Development responsibilities? • If their property management company is collecting Tourist Development Taxes for their property rental(s) under their number, the customer is not required to register and file returns unless it is a requirement in your county. Be aware that under Florida Law that the property owners are ultimately responsible for the Tourist Development Tax if a Property Manager defaults or fails to collect and/or pay taxes. • F.A.C. 12A-1.061 (7) (2) - (tab 10)

25. What if the tax is delinquent? • Dealer is not entitled to the collection allowance. • There will be a 10% penalty on the total tax collected or a minimum penalty of $50.00, whichever is greater. A penalty of $50.00 will be imposed for failure to file a coupon for $0.00. • Interest is accrued based on a “floating rate of interest” per Florida Statutes 213.05, for all late and non payment of taxes. Rates are subject to change January 1 and July 1 of each year. You can find the Interest Rate on the Department of Revenue website. • http://dor.myflorida.com/dor/tips/2010.html • F.S. 212.12 (3)(2)(a) - (tab 11), • F.A.C. 12A-1.056 (4) (b-g) - (tab 11) • Business Owner’s Guide pg. 7 (tab 22)

26. How do you choose a taxpayer for an Audit? • There are many ways that a taxpayer may be chosen for an audit. It could be random, by referrals from your collection department for habitually filing late returns, incomplete tax returns, etc., or referrals from the Department of Revenue.

27. What is the purpose of an Audit? • The purpose of an audit is to ensure that the Tourist Development Tax is uniformly enforced, deter tax evasion, promote voluntary compliance, and educate the taxpayers in the correct method of reporting. While most tax returns are accepted as filed, returns are audited to verify accuracy and evaluate compliance. The audit may or may not result in additional tax due or may disclose that a refund is due. • F.S. 212.13 (5)(a) - (tab 12)

28. What are the required records for audit? • All records that substantiate transient rentals including guest checks, general ledgers, sales tax payments, Federal income tax returns, etc. The records must be made available at the place of business. If any records are located outside the business they must be made available for inspection in the county prior to the audit. Records should be maintained for a minimum of three years. • F.S. 212.13 (1) & (2) - (tab 12)

29. What is the procedure for an Audit? • All tax returns are subject to an audit. A Notice of Intent to Audit is sent to the taxpayer informing them of the impending audit and giving them 60 days notice before scheduling the audit. The audit must commence within 120 days following the notice. In addition to the notice informing the taxpayer of the audit period there is also an audit exhibit attached specifying the financial records that will be reviewed. The audit exhibit is not an all inclusive list. There may be additional records requested once the audit commences. • F.S. 212.13 (5) (a) - (tab 12)

30. What are some audit exhibits? * Florida Department of Revenue Sales Tax Returns (DR-15) * General Ledgers * Chart of Accounts * Financial Statements * Business Tax Receipt * Loan Applications * Federal Income Tax Returns * Franchise reports and agreements, if applicable * Exemption Certificates and the corresponding folios * Monthly Bank Statements, deposit slips * Leases, if applicable * Resale Certificates * Register Tapes, if applicable

31. * Housekeeping Records * Guest Folio/Registration Cards/Guest Applications * Cash Receipt Records (Daily/Monthly Posting)* * Monthly Utility Statements * Daily Report (posted by hand or computer generated) * Daily Audit Packs (daily close out by Night Auditor) * Monthly Sales Tax Reports (Realtor/Agent) * Monthly Owner Statements (Realtor/Agent) * Rental Confirmations (Realtor/Agent) * 1099’s, 1042’s if applicable * Other - any and all documents needed to complete the audit

32. Cash Receipts records may be known under such names as: Cash Receipts Summary, Daily Report, Activity Report, G/L Worksheet, Daily Logs, etc. • Any person who collects rentals charges for short-term accommodations must maintain adequate records, including copies of all leases, rental agreements, duplicate copies of receipts issued for the payment of rental charges. • All records must be available during an audit. Records must be maintained for three years. Pursuant to F.S. Chapter 212, in the absence of records, an assessment may be issued from an estimate based upon the best information available, which shall be considered prima facie correct, and the burden to show the contrary shall rest upon the owner or the owner’s representative. • If there are insufficient records available or no records, an assessment may be issued based upon the best available information. • A Power of Attorney will be needed if the owner wants us to talk with their accountant, attorney or bookkeeper about their Tourist Development Tax Account.

33. If a customer uses a Rental Agent but also rents periodically on their own, must they have a Tourist Development Tax account number and submit returns in those months that they have rented the property?. • Yes. They will need an account number since they will be responsible for collecting, reporting and remitting the Tourist Development Tax during those months in which the unit is rented without the use of a Rental Agent. • F.A.C. 12A-1.061(7)(a) - (tab 10)

34. Are guaranteed deposits taxable? • Forfeited room deposits that guarantee the guest the use or possession of a short-term rental (six months or less) are taxable. • F.A.C. 12A-1.061 (5)(b)(1) – (tab 10)

35. Are reservation deposits taxable? • Yes, a reservation deposit that is required to be paid in advance to secure the guest the right to rent is reported when applied to the rental at check-in. • F.A.C. 12A-1.061 (5)(b)(2) – (tab 10)

36. Should prepayments be submitted right away? • The prepayment of rents or advance rents received must be reported in the month when received because taxes are considered state and county funds from the moment of collection and must be remitted to the taxing authorities without delay. • F.S. 212.15 (1) - (tab 14)

37. Do they need to file a tax return even if they don’t owe any Tax? • Yes, Florida law requires that a tax return must be filed based on your collection period, even if no tax is due for that period. A late-filed tax return is subject to a minimum $50.00 penalty, even if no tax is due. • F.S. 212.12 - (tab 11) • F.A.C. 12A-1.056 (1) (g) – (tab 14) • Business Owners Guide pg. 7 - (tab 22)

38. What if they have a long-term renter? Do they still have to pay? • Renters who have signed a bona fide written lease in excess of six (6) months are exempt from the tax. A lease must meet the criteria of the Department of Revenue, Rule 12A-1.061(15) to be considered bona fide. Renters who have paid the Tourist Development Tax for the first six (6) months (without a lease) will become exempt in the seventh month and remain exempt as long as they reside at the same location, based on continuous residency. • F.A.C. 12A-1.061 (15) - (tab 10)

39. What if the customer sells or no longer rents the property? • The customer should notify their Tax Collector and Property Appraiser immediately. • F.A.C. 12A-1.061 (7)(5) - (tab 10) SOLD

40. When is a power of attorney necessary? • A Power of Attorney is necessary if they would like you to discuss their Tourist Development Tax Account with someone who is not an owner, officer, or partner in the business (e.g., their accountant, attorney, or bookkeeper).

41. Can credit card payments be deducted from the gross rentals? • Credit card fees MAY NOT be deducted from the gross rentals. A seller or lessor may not impose a surcharge on the buyer or lessee for using a credit card in lieu of payment by cash, check, or similar means, if the seller or lessor accepts payment by credit card. A surcharge is any additional amount imposed at the time of a sale or lease transaction by the seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit card to make payment. • F.S. 501.0117 (1) – (tab 10)

42. What is the Rise 2 Program and how it is used? • The program used for working together to enhance revenue collection is known as • RISE. - registration, information, sharing and exchange. To be a part of the RISE program, a written contract must be signed between the Department of Revenue (DOR) and the local government. This signed contract allows us to share registration and audit information with each other. • Is Amnesty ever given? Yes. • F.S. 213.053 & 125.0108 - (tab 16), 213.0535 - (tab 17) Department of Revenue

43. What are the common criminal tax violations for failing to collect and/or pay the taxes? • 1. Theft of State funds – F.S. 212.15(2) – (tab 14) • 2. Refusal to file returns and pay taxes due – F.S. 212.14 (3) (tab 13) • 3. Failure to register – F.S. 212.18 – (tab 13) • 4. Failure to file six consecutive returns – F.S. 212.12(2)(c) (tab 11) • 5. False or fraudulent return – F.S. 212.12(2)(d) – (tab 11) • 6. Fraudulent claim of exemption – F.S. 212.085 – (tab 11)

44. .What are the Tourist Development criminal tax violations? • Failure or Refusal to Collect: • F.S. 125.0104(8)(a) – (tab 8) • Absorbing Tax: • F.S. 125.0104(8)(b) - (tab 8) • Any person who is taxable hereunder who fails or refuses to charge and collect from the person paying any rental or lease the taxes herein provided, either by himself or herself or through agents or employees, is, in addition to being personally liable for the payment of the tax, guilty of a misdemeanor of the first degree, punishable as provided in: • F.S. 775.082 or F.S. 775.083 - (tab 13)

45. No person shall advertise or hold out to the public in any manner, directly or indirectly, that he or she will absorb all or any part of the tax, that he or she will relieve the person paying the rental of the payment of all or any part of the tax, or that the tax will not be added to the rental or lease consideration or, when added, that it or any part thereof will be refunded or refused, either directly or indirectly, by any method whatsoever. Any person who willfully violates any provision of this subsection is guilty of a misdemeanor of the first degree, punishable as provided in • F.S. 775.082 or F.S. 775.083

46. How do you pursue New Registrations? • TDT AVENUES USED IN THE PAST FOR FINDING NEW ACCOUNTS • FTDTA: Network with other counties. Ask how they get the word out. • Ask for their literature, copy what you like and improve on your literature all the time. • On your County’s web site or your elected official’s website: include your application, information sheet and coupon if it calculates the tax for dealer. • RISE 2 program – Your local DOR rep is a great source of new accounts. They tell their walk- in customers they have to also set up an account with the St. Lucie County Tax Collector. We in turn inform our customers they have to contact DOR . • Display informational flyers in your and other accommodating offices.

47. Search Internet websites advertising rental accommodations in your county. • Search Newspaper “for rent” section. • Tourist Development Council Representatives are a good source of new accounts. They attend grand openings, see new construction, hear of ownership changes and hotels being built.. • Send surveys to all personal property owners with a 6000 business type that are not homesteaded. • Your Property Appraiser can give you disc so you can run labels for mailing. *Mobile Home Parks: Request to leave your TDT brochure for display in their office. *Condo Associations News Letters *Real Estate Management Companies & their News Letters *Ask if you can give them an article or info to enclose in their mail outs for news letter or billing. Try for late summer so you will be in their fall mailing.

48. Overnight Camp Grounds • Home Shows: If Tax Office has booth, distribute information there • FABTO: Local conference Tax Collector had a booth, TDT info was on the table • Business Tax data base: You can print list of hotels, motels, rooming houses, B & B. • Customers tell about other renters in their development • Yellow pages for Hotels & Motels • Clerks in you Business Tax office can refer new hotels owners etc to TDT Clerk • The informational pamphlet mailed with our yearly tax bill includes the statement: If you rent your property short term for living accommodations please call 772.462.1650 for information or to open a TDT account.