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075-267 -- October 14, 1975
TAXATION
INCOME FROM CITY RENTAL OF COMMERCIAL PROPERTY
TAXABLE

To: Harry L. Shorstein, General Counsel, Jacksonville

Prepared by: Stephen E. Mitchell, Assistant Attorney General, and
Marva A. Davis, Legal Intern

QUESTIONS:
1. Does the Florida sales tax law, Ch. 212, F. S., and
specifically s. 212.031, attach to income received from
rental of property acquired by the City of Jacksonville
through urban renewal and leased temporarily until it is
disposed of?
2. Does s. 163.395, F. S., exempt such property from
sales tax?

SUMMARY:
The City of Jacksonville Department of Housing and Urban
Renewal Development is liable for sales taxes due on
rentals received from the leasing of commercial property
acquired through urban renewal and leased temporarily until
disposed of.
Section 163.395, F. S., to the extent of any
inconsistency or conflict with Ch. 212, F. S., has been
superseded by s. 212.08(10) and is not applicable to the
sales tax, and does not provide any exemption from the
sales tax for rentals received from the leasing of
commercial property acquired by the City of Jacksonville
Department of Housing and Urban Development through its
urban renewal program.
Your first question is answered in the affirmative and your second
question in the negative.
AS TO QUESTION 1:
The City of Jacksonville Department of Housing and Urban
Development (hereinafter City HUD) was created pursuant to s. 7, Ch.
69-305, Laws of Florida (s. 163.425, F. S.), and City Ordinance 69-
614-419. You state that City HUD leases commercial property it has
acquired through its urban renewal program. You also indicate that
the Florida Department of Revenue has assessed the City HUD for sales
tax due on rentals received through said leasing.
Section 212.031(1)(a), F. S., in pertinent part, provides:
It is declared to be the legislative intent that every
person is exercising a taxable privilege who engages in the
business of renting, leasing or letting any real property .
. . . (Emphasis supplied.)
In determining whether s. 212.031, F. S., attaches to income
received from rental by the City of Jacksonville of property acquired
through urban renewal and leased temporarily, it is essential to
first determine whether the City of Jacksonville and urban renewal
property fall within the purview of the statutory definitions. A
"person" is defined by s. 212.02(1), F. S., so as to include any
municipality. You have stated that the City of Jacksonville leases
commercial property it has acquired through its urban renewal
program. In order for said leasing of commercial property to be a
taxable privilege within the provisions of s. 212.031(1)(a), it must
be shown that the City of Jacksonville engages in the business of
leasing this real property unless it falls within one of three
exceptions enumerated in s. 212.031(1)(a). If the real property is
assessed as agricultural property, is used solely as dwelling units,
or is subject to tax on parking, docking, or storage spaces, then it
is not taxable under Florida sales tax law.
"Business" is defined by s. 212.02(9), F. S., to mean:
. . . any activity engaged in by any person, or caused to
be engaged in by him, with the object of private or public
gain, benefit, or advantage, either direct or indirect. . .
. [Business] shall include . . . all rentals of real
property, other than low rent housing operated under
chapter 421 . . . . Any tax on such sales, charges,
rentals, admissions, or other transactions made subject to
the tax imposed by this chapter shall be collected by the
state, county, municipality, any political subdivision,
agency, bureau or department, or other state or local
governmental instrumentality in the same manner as other
dealers, unless specifically exempted by this chapter.
(Emphasis supplied.)
In 1959, the Florida Supreme Court held that rentals received by a
public housing authority pursuant to Ch. 421, F. S., were not subject
to the Florida sales tax since the activity did not fall within the
scope of the term "business," as then defined. Green v. Panama City
Housing Authority, 115 So.2d 560 (Fla. 1959). The Legislature in
1968 amended s. 212.02, F. S., purportedly to include within the term
"business," inter alia, all rentals of commercial offices or
buildings and so as to specifically provide that any rentals were to
be collected by the state, county, or municipality. However, a
general tax exemption from all taxes for public housing authorities,
s. 423.02, F. S., exempted said rentals from the sales tax, and in
State ex rel. Housing Authority of Plant City v. Kirk, 231 So.2d 522
(Fla. 1970), the Supreme Court held in effect that the title to the
amendatory act did not convey notice that the term "business" had
been redefined or that there was any purpose to impose such tax on
the housing authorities and that the amendatory legislation did not
repeal by implication the aforesaid exemption of the housing
authorities. The Legislature then amended s. 212.02(9) to its
present state, providing that "business" shall mean "any activity
engaged in by any person . . . with the object of . . . public gain,
benefit, or advantage" and shall include "all rentals of real
property, other than low rent housing operated under chapter 421."
Since the subject property is commercial rather than low income
housing, and was not acquired pursuant to, nor held or operated under
Ch. 421, F. S., the rental of same clearly falls within the scope of
s. 212.031, supra. Furthermore, there is no specific exemption in
Ch. 212, F. S., exempting such rentals from sales tax liability.
Sections 212.08(10) and 212.21(2). It is therefore my opinion that
the City of Jacksonville's rental or leasing of such commercial
property acquired under its urban renewal program is subject to the
sales tax and the City HUD is obligated to collect the tax.
AS TO QUESTION 2:
As noted in question 1, City HUD was created pursuant to Ch. 163,
F. S., in particular, s. 163.425. Section 163.395(2) provides:
The property of the county or municipality acquired or
held for the purposes of this part . . . shall be exempt
from all taxes of the municipality, the county, the state
or any political subdivision thereof. However, such tax
exemption shall terminate when the county or municipality
sells, leases, or otherwise disposes of such property in a
community redevelopment area to a purchaser or lessee which

is not a public body entitled to tax exemption with respect
to such property. (Emphasis supplied.)
This provision would not appear to grant exemption from sales tax
for rentals received from the leasing of commercial property by City
HUD to private persons or entities even if it were applicable.
When the First District Court of Appeal considered Green v. Panama
City Housing Authority, 110 So.2d 490 (1 D.C.A. Fla., 1959), the
dissenting opinion stated that a similar general tax exemption from
all taxes (s. 423.02, F. S.) for public housing authorities was
limited to ad valorem taxation. On review, the Supreme Court
expressly stated that such an exemption extended to all taxes, ad
valorem or excise taxes. [See] 115 So.2d at 562. In State ex rel.
Housing Authority of Plant City v. Kirk, supra, the Department of
Revenue argued that the amended definition of "business" impliedly
repealed s. 423.02. The Supreme Court rejected this argument and
stated that the Legislature should make it clear what exemptions were
still viable. The Legislature responded in 1970 creating s.
212.08(10), F. S. [s. 3, Ch. 70-206, Laws of Florida]:
No transactions shall be exempt from the tax imposed by
this chapter except those expressly exempted herein.
Except for s. 423.02, all special or general laws granting
tax exemptions, to the extent they may be inconsistent or
in conflict with this chapter, including but not limited to
the following designated laws, shall yield to and be
superseded by provisions of this subsection: ss. 153.76,
183.14, 184.17, 258.14, 315.11, 323.15(6), 340.20, 348.122,
348.65, 348.762, 349.13, 374.132, 616.07, 623.09, 637.131,
637.151, 637.291, and 637.311 and the following Laws of
Florida, acts of the year indicated: s. 31, ch. 30843,
1955; s. 19, ch. 30845, 1955; s. 12, ch. 30927, 1955; s. 8,
ch. 31179, 1955; s. 15, ch. 31263, 1955; s. 13, ch. 31343,
1955; s. 16, ch. 59-1653; s. 13, ch. 59-1356; s. 12, ch.
61-2261; s. 19, ch. 61-2754; s. 10, ch. 61-2686; s. 11, ch.
63-1643; s. 11, ch. 65-1274; s. 16, ch. 67-1446; and s. 10,
ch. 67-1681.
Since s. 163.395, supra, a general law granting a general tax
exemption, was enacted in 1969, it is superseded by s. 212.08(10),
supra, and has no applicability to the sales tax.