Tourist Development Tax - Frequently Asked Questions
What is the Tourist Development Tax?
The tourist development tax is a charge (5% in Seminole County) on the revenue from rentals of six months or less. This tax is in addition to the state sales tax (7% in Seminole County). The state sales tax is sent to the Florida Department of Revenue. The tourist development tax is sent to the Seminole County Tax Collector.
What is a taxable rental?
What is a transient accommodation?
How is the Tourist Tax Used?
Funds are used to advertise and promote tourism in Seminole County as well as funding grants for cultural and fine arts entertainment, festivals, programs and activities which promote Seminole County tourism. For more information contact the Seminole County Convention and Visitors Bureau at (800) 800-7832.
How do I collect the tax from my tenants?
First, you must register. A registration form can be obtained from this website or by contacting the Seminole County Tax Collector. An application must also be obtained from the Florida Department of Revenue for the collection of state sales tax. The Department of Revenue can be contacted at 1-800-FLA-DOR1 (1-800-352-3671) or locally at (407) 475-1200.
When is the Tax due?
The tourist development tax is due to the Tax Collector’s office by the 20th day of the month following the collection. If the postmark is the 21st day of the month or after, delinquent interest and penalties must be added. The reporting month is the month in which the rent is collected.
Who Must Pay?
Any person or entity who rents or leases any accommodation for six months or less. This tax applies to hotels, motels, apartment buildings, single or multi-family dwellings, condominiums, mobile home parks, and some vessels.
What Happens if the Renter Doesn't Pay the Tax?
Who is Exempt?
Anyone who has entered into a bona fide written lease in excess of six months is exempt from sales tax and tourist development tax on the lease payments. If there is no written agreement, the owner is required to collect and remit the state sales tax and tourist development tax for the first six months. The seventh month and every month thereafter will be exempt, provided the renter continues to reside at the same location. Anyone who is exempt from paying state sales tax is also exempt from the tourist development tax. These exemptions include full-time students, active duty military personnel, churches and non-profit organizations that have a sales tax exemption number from the Florida Department of Revenue. Contact the Tax Collector’s Office for further information.
What is a bona fide written lease?
What do owners and operators receive for collecting the tax?
Owners and operators are entitled to keep 2.5% of the first $1,200 of the tourist tax collected (maximum of $30.00) as compensation for this service. This collection allowance is subtracted from the tax on the return form - only the difference is paid to the tax collector’s office.
What happens if the tax becomes delinquent?
If the return and payment are not remitted by the 20th of the month following the reporting period, the collection allowance is forfeited. In addition, penalty and interest are assessed. The penalty is 10% of the tax due for each delinquent month or fraction of a month, not to exceed 50% of the aggregate. The minimum penalty is $50.00. Interest is also accrued for each month of delinquency. You will need to contact our office at (407) 665-7637 for instructions.
What records must be kept?
Any business dealing in guest/tenant/transient accommodations is responsible for collecting and remitting this tax and for maintaining records such as guest checks, general ledgers, tax payments and federal income tax returns. All tourist development tax records must be kept for five years and made available for audit at the place of business. Any records located outside the county must be returned to the audit site prior to an audit.
What about records maintained outside Seminole County?
How long do I have to keep the records?
Are my tax records confidential?
If I rent my property, what else must I do?
In addition to collecting the tourist tax and the state sales tax, an owner is required to pay Tangible taxes annually on the value of the rental furnishings. A return must be filed each year with the Property Appraiser’s Office declaring the value of the furnishings and appliances.
Any questions about filing a tangible tax return can be directed to the Property Appraiser’s Office at (407) 665-7506. The tangible tax bills are mailed each year in November at the same time as the real estate tax bills.
If a unit is available for short-term rental, this is considered to be an established business and the owner is required to pay a Business Tax Receipt (formerly known as an Occupational License) at the Tax Collector’s Office.
Information and registration for the Local Business Tax is available from the Tax Collector’s office. If your property is located in the city limits, you may also need a city Business Tax Receipt. Contact the appropriate city office for more information.
What if I sell or no longer rent the property?
According to Florida Administrative Code (12A-1.061), unless otherwise exempt, "every person is exercising a taxable privilege when engaging in the business of renting, leasing, letting, or granting licenses to others to use transient accommodations, unless the rental charges or room rates are specifically exempt".
Anyone who has entered into a bona fide written lease for greater than 6 months is exempt from sales tax and tourist development tax on the lease payments. If there is no written agreement, the owner is required to collect and remit the state sales tax and tourist tax for the first six months. The seventh month and every month thereafter will be exempt provided the same renter continues to reside at the same location.
"Transient accommodation" means each living quarter or sleeping or housekeeping accommodation in any:
- hotel or motel
- apartment house
- multiple unit structure (e.g., duplex, triplex, quadraplex, condominium)
- rooming house
- tourist or mobile home court (e.g., trailer court, motor court, recreational vehicle camp, fish camp)
- single family dwelling
- garage apartment
- beach house or cottage
- cooperatively owned apartment
- condominium parcel
- timeshare resort
- mobile home or any other house
- boat that has a permanent, fixed location at a dock and is not operated on the water away from the dock by the tenant (e.g., houseboat permanently moored at a dock, but not including cruise liners used in their normal course of business)
- vehicle, or other structure, place, or location held out to the public to be a place where living quarters or sleeping or housekeeping accommodations are provided to transient guests for consideration.
- Each room or unit within a multiple unit structure is an accommodation. F.A.C. 12A-1.061(2)(f)
The property owner is responsible to ensure that all proper taxes are collected and remitted to the proper agency, even if the owner has an agreement with a management company. If taxes are due and not remitted, the property owner will become personally liable to pay the tax. A lien in the amount of all unremitted tourist taxes, and applicable penalties and interest will be placed on the Personal Property of the property owner.
According to Florida law, any person who enters into a bona fide written lease, for continuous residence of a transient accommodation for longer than six months, is exempt from Florida sales tax and local tourist development tax. A “bona fide written lease” is a written document that clearly demonstrates it is intended for the renter to have exclusive use of the rental property. There are several elements, which will be considered to validate the lease document and demonstrate the parties’ intent. These elements include:
- The length of the lease, including the beginning and ending date;
- A statement giving the lessor the complete and exclusive use of the property for the entire duration of the lease;
- Execution in good faith, without deceit or fraud;
- A sufficient description of the leased property;
- A statement that the lease contains the complete and sole agreement;
- A provision that the lessee will pay an agreed amount of rent;
- A statement containing the due date, frequency and address for payment of the rent;
- A statement specifying what conditions will result in early termination of the lease, the rights and obligations of the parties at termination and any penalties that will result from early termination;
- Signatures of the named parties, lessee and lessor.
These are the things that may be reviewed to determine whether a lease is bona fide and the rental transaction, therefore, exempt from tax.
- The Department of Revenue and the Tax Collector can examine the lease document, as well as all surrounding facts and circumstances, to determine the parties’ intent at the time of execution of the lease. This is important because even though all nine above elements are contained in a written document, it may be determined that the length of the lease was false and that by either separate verbal agreement or by prior experiences, it is really a short term, taxable rental.
- A “significant change in circumstances” that could not have been known at the time of the rental will generally not endanger the legitimacy of the lease. A significant change could be an illness, death, bankruptcy, loss of job, transfer, etc.
- If the lessor has a pattern of leases being terminated early, with no significant reason as suggested and no penalty to the lessee, it could be construed that there was no intent to have a long-term rental, making the entire transaction taxable. This could result in assessments for back periods plus penalties and interest.
According to Florida Law, all records must be made available for review by the Tax Collector and available for audit by the Clerk of Circuit Court.
For an informal review by the Tax Collector, a reasonable period of time will be given to allow the records to be returned to Seminole County.
For a formal audit, the Clerk of Court follows Florida Law for providing the required statutory notice of audit.
Since you may be audited for 5 years after the rental has occurred, you must keep all records for a minimum of 5 years.
According to Florida Law, all tourist records are confidential - including the registration form, all tax returns that have been filed, audit documentation and any tourist tax record that may identify the rental property or its owner.
The Tax Collector is required to share all tax information with the Clerk of Circuit Court (who is responsible for local auditing) and the Department of Revenue (who is responsible for state auditing).