Tampa Sales Tax For Sharing Agreements On The Equipment
The Tampa Sales Tax on the best Equipment Sharing Agreements
There are a lot of inquiries about the topic of rental of the real estate property versus the rental of the TTP (tangible personal property) in connection to the equipment owned by the third-party and used by businesses. This is a huge thing since there are a lot of companies in Florida that produce the payments to the equipment owner and the businesses. But before we move further, let us let you know what is the sales tax in Tampa Florida. The Tampa sales tax is a tax on the sales of anything in the world. It is also the tax on the receipts from sales in Tampa, FL.
Getting back to the point, if you feel this is impossible. Then think about how many times have you ever seen the ATM in a convenience store, mall, hotel or any other non-banking place? All these places do not have it, but if they do they are being paid for it. Have you seen the jukebox at a bar? Well, there are a lot of examples in this context. When a third party keeps an equipment from another business to get income from it with their own business as well as the other person’s own is there in almost every business you come across.
Now moving to the main point, there have been a lot of questions that we also get in our career where people ask if the amount that is paid to the owner is a rent or is it just a sharing of revenue agreement. Moreover, if it is on rent, then the Tampa FL sales tax involvement would be there in this. Another thing is that, it also depends on the kind of device that they are using in their business to keep it there.
Let us take an instance of the jukebox at the bar that is at a location in Florida. Yes, there is a sales tax in Tampa FL that is in it as you put your quarter or dollar in it. Anyways, if this does invite a tax along with the tax of the portion of the revenue paid to the location owner that is to be considered as the rent of it, wouldn’t this be taking the tax twice, like a double taxation of the same revenue?
Tampa Florida sales tax Cases: Air VAC Systems Inc Vs FL Department of Revenue
So, our company decided to do research and give a perfect reply for the queries by many clients. We found the case of the S & W Air-Vac Systems, Inc. vs. the Dept. of Revenue, Florida that was decided about in 1997. It was about the air-vac equipment that was placed at the gas stations and the other stores. The company that owned the air-vac machine made an agreement with the shop owners. This paid the fee that was based on a percentage of the gross receipts. That is when the revenue department decided to get into the scene saying that the company was renting the place its machines were installed. And they stated that the payments that were paid to the location needed to have a sales tax in Tampa FL.
So, the company decided to sue to the agency that created a dispute. They felt it was not right for the department to pick an issue with a rental property for paying the sales tax in Tampa FL. They took the matter to court and lost. They then appealed to the lower court where they had placed a lot of different theories to prove their point. The theories they tries to talk about have been explained below:
The Revenue Sharing Agreement: The Company claimed that it was an agreement of revenue sharing just to avoid the Tampa sales tax. Moreover, the court then proved that the payment that was taken by the company was based on the placement of the equipment at the location in the stores. And there was no agreement or anything else. With all this, the company was not allowed to have the payment and was asked to remove the machine from there. Moreover, the company was given a license to utilize the real property.
The Bailment: It then tried to avoid the Tampa Florida sales tax by using the bailment agreement with the help of the shop. The court then ordered the Bailments to precisely define the Bailment as a relationship that is contractual between the two parties. In this, the primary subject object is given to another person other than the owner. Moreover, the court found a lot of control, custody and possession that was seized to the baile by the bailor. The company then argued that, but the court didn’t find the facts supporting any Bailment. This was because the equipment was taken care of the company without any hand of the store owner. Hence, the were liable to pay the Tampa sales tax.
The Joint Ventures: The Company then argued that they had a joint venture with the store owner. And to qualify a joint venture, the things that were needed were:
· The right of control or Joint control.
· A commitment to share the loss.
· The power to distribute the profits between both parties.
· Both parties need to have a common business purpose.
· Both should have a jointly established interest in the property.
The company could prove a common purpose for the business but there was not right of control or any joint control in the matter. The other points were also not proved in this case. So, in the end, the court closed the case with the fact that the company was subjected to the Tampa sales tax.
What does this case say about the Tampa sales tax?
This case lets us know that we are not supposed to do this type of business with any company. This is only if a person want to avoid the
Tampa sales tax. Moreover, it lets us know that the agreement type between the two companies is vital to find out if the Tampa sales tax should be taken or not. Well, if the store owner was a part owner of the equipment, then what would have happened? This would make it hard for the Department of Revenue to win the case.
One thing to note in mind is that the Florida Tampa sales tax department knows everything including the frauds. So, if you are planning to fool them, there is no way to do that. Moreover, if you need any help with the Tampa sales tax, then the Tax Law Tampa is there to help you at any time. Visit https://www.taxlawtampa.com/ to avail the services at great rates!