STATE OF FLORIDA DEPARTMENT OF REVENUE DECLARATORY STATEMENT

Transcription

1 STATE OF FLORIDA DEPARTMENT OF REVENUE Petition for Declaratory Statement Cox Radio, Inc. Case No. DOR-07-2-DS / DECLARATORY STATEMENT Petitioner, Cox Radio, Inc. (hereinafter Petitioner ), has petitioned the Department of Revenue (hereinafter Department ) for a declaratory statement, pursuant to Section , Fla. Stat. The Petitioner presented the following questions in its Petition to be answered by the Declaratory Statement: Question 1: Are the transmissions of radio or television signals through an antenna on a broadcast transmission tower communications services, as defined in subsection (2), Fla. Stat.? Question 2: Is the lease of space for antennas on a broadcast transmission tower and space in an adjoining building for transmitters and related broadcasting equipment within the exception set forth in subparagraph (1)(a)5., Fla. Stat.? Jurisdiction The Department has jurisdiction to render a declaratory statement as provided in Section , Fla. Stat. Filing of the Petition was duly noticed in the Florida Administrative Weekly. Petitioner s Facts Petitioner is a party, either directly or by way of assignment, to five lease agreements (Leases A- E) in which real property is leased to transmit voice, audio, video information or signals for a television or radio station. In one of these leases, Lease A, Petitioner is the lessor, by way of assignment, in a lease agreement with a lessee/television station. The lessee uses the lessor s real property (tower and building) to operate its television station. Petitioner states that it has collected sales tax on the rental payments made by the lessee under Lease A and remitted those taxes to the Department. Under four of the lease agreements, Leases B-E, Petitioner is the lessee and is required to pay sales tax on the rent due. Under these leases, Petitioner leases space on broadcast transmission towers on which the Petitioner is permitted to place one or more studio transmission antennas and to use one or more broadcast antennas. In each of these leases, Petitioner also rents space in a building adjoining the broadcast transmission tower for transmitters and related broadcasting equipment.

2 Analysis Subsection (1), Fla. Stat., provides that any substantially affected person may seek a statement regarding an agency s opinion as to the applicability of a statutory provision, or of any rule or order of the agency, as it applies to the petitioner s particular set of circumstances. This Declaratory Statement addresses the specific facts stated in the Petition and in Leases A-E. It assumes that Leases A and D were assigned to the Petitioner and that Lease D was fully executed, as indicated by the Petition. Rule , F.A.C., provides, in part, that [t]he agency may rely on the statements of fact set out in the petition without taking any position with regard to the validity of the facts. Question 1: Are the transmissions of radio or television signals through an antenna on a broadcast transmission tower communications services, as defined in subsection (2), Fla. Stat.? The term, communications services is broadly defined in subsection (2), Fla. Stat., to mean:... the transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals, including cable services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical, microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or conveyance.... The transmissions of radio or television signals through an antenna on a broadcast transmission tower, as described in Leases A-E are, therefore, communications services, as defined in subsection (2), Fla. Stat. Question 2: Is the lease of space for antennas on a broadcast transmission tower and space in an adjoining building for transmitters and related broadcasting equipment within the exception set forth in subparagraph (1)(a)5., Fla. Stat.? Every rent, lease or license of real property is taxable, pursuant to section , Fla. Stat., unless such rent, lease or license is specifically exempt or excepted from taxation. Exemptions from, or exceptions to, taxing statutes are strictly construed against granting the exemption or exception. See e.g., United States Gypsum Company v. Green, 110 So. 2d 409 (Fla. 1959); State ex rel. Szabo Food Services, Inc. v. Dickinson, 286 So.2d 529 (Fla. 1973). Subparagraph (1)(a)5., Fla. Stat., provides exceptions from the tax imposed under section , Fla. Stat. This subparagraph states that tax does not apply to property that is

3 [a] public or private street or right-of-way and poles, conduits, fixtures, and similar improvements located on such streets or rights-of-way, occupied or used by a utility or provider of communications services, as defined by s , for utility or communications or television purposes. For purposes of this subparagraph, the term utility means any person providing utility services as defined in s This exception also applies to property, wherever located, on which the following are placed: towers, antennas, cables, accessory structures, or equipment, not including switching equipment, used in the provision of mobile communications services as defined in s For purposes of this chapter, towers used in the provision of mobile communications services, as defined in s , are considered to be fixtures. Two separate exceptions from taxation on the rental, lease, or license of real property are contained within this subparagraph. One exception is for property that is a public or private street or right-of-way on which certain improvements are located. The second exception is for property on which are placed certain structures or equipment used in the provision of mobile communications services. To qualify for the exception for property that is a public or private street or right-of-way on which certain improvements are located, all four elements described below must be satisfied: 1. The property is a public or private street or right-of-way; 2. Poles, conduits, fixtures, and similar improvements are located on the street or rightof-way; 3. The property is occupied or used by a utility or provider of communications services, as defined by s ; and 4. The property is used for utility or communications or television purposes. When the requirements of this statutory provision are applied to the particular set of circumstances provided by the Petitioner, 1 it appears that the Petitioner does not qualify for this exception. Nothing is contained in the facts provided, nor has the petitioner otherwise asserted, that the towers in question are located on a public or private street or right-of-way. Therefore, the first element of the exception for certain improvements located on public or private streets or rights-of-way is not met and the exception does not apply. 2 1 See Section , Fla. Stat. 2 Petitioner may not meet the requirements of the second element as well. Even though they are transmitting and receiving communications signals, Petitioner may not be a communications services provider as required by subsection (1)(a)5., Fla. Stat., since they are not engaged in the business of transmitting communications signals for others and are not required to collect communications services tax on such transmissions.

4 Moving on to the second exception from taxation found in subparagraph (1)(a)5., Fla. Stat., for the rental, lease, or license of real property 3 to qualify for this exception, both elements described below must be met: 1. Towers, antennas, cables, accessory structures, or equipment 4 are placed on the property; and 2. The towers, antennas, cables, accessory structures, or equipment are used in providing mobile communications services. Mobile communications service" is defined in subsection (7), Fla. Stat., to mean:.. commercial mobile radio service, as defined in 47 C.F.R. s as in effect on June 1, The term does not include air-ground radiotelephone service as defined in 47 C.F.R. s as in effect on June 1, Commercial mobile radio services are all mobile services operated for profit that solicit for subscribers and are interconnected with the public switched network, which is the traditional land-line telephone service. See 47 U.S.C. ss. 153(27) and 332(d)(1) and (2) and 47 C.F.R. s for further clarification on what constitutes commercial mobile radio service. Generally speaking, mobile communications services are understood to be cellular phone service. There is nothing contained in the facts provided, nor has the petitioner asserted, that the lessee in Lease A or the Petitioner in Leases B-E are using the real property to place towers, antennas, cables, accessory structures or non-switching equipment to provide mobile communications services. The structures and equipment appear to be placed on the leased property for the lessees own use in operating television and radio stations. Therefore, Petitioner does not meet the conditions required for qualifying for the second exception from taxation found in subparagraph (1)(a)5., Fla. Stat. It is important to note that the second exception from taxation found in subparagraph (1)(a)5., Fla. Stat., is a separate consideration. The second exception provides that... [t]his exception also applies to property, wherever located, on which the following are placed: towers, antennas, cables, accessory structures, or equipment, not including switching equipment, used in the provision of mobile communications services, as defined in s For purposes of this chapter, towers used in the provision of mobile communications services, as defined in s , are considered to be fixtures. This language relates only to the provision of mobile communications services and not to utilities or broadly to providers of communications services. Leases of property on which towers, 3 Under this exception, the property may be located anywhere. 4 Equipment as used in this exception from taxation does not include switching equipment.

5 antennas, cables, accessory structures, or non-switching equipment are placed that are used to provide mobile communications services are not subject to tax, pursuant to the second exception. The phrase used in the provision of mobile communications services as defined in s does not modify the phrase not including switching equipment. Conclusion The Petitioner s questions are answered as follows: Question 1: Are the transmissions of radio or television signals through an antenna on a broadcast transmission tower communications services, as defined in subsection (2), Fla. Stat.? Answer: Yes. Question 2: Is the lease of space for antennas on a broadcast transmission tower and space in an adjoining building for transmitters and related broadcasting equipment within the exception set forth in subparagraph (1)(a)5., Fla. Stat.? Answer: No. DONE AND ORDERED this _17th day of January, STATE OF FLORIDA DEPARTMENT OF REVENUE APPEAL RIGHTS _LE Lisa Echeverri Executive Director Any party whose substantial interests are determined by this Declaratory Statement has the right to seek judicial review of the Declaratory Statement as provided in Section , F.S., by filing a Notice of Appeal as provided in Rule 9.110, Florida Rules of Appellate Procedure, with the Agency Clerk, Florida Department of Revenue, Office of the General Counsel, Post Office Box 6668, Tallahassee, FL , and by filing a copy of the Notice of Appeal, accompanied by the applicable filing fees, with the appropriate District Court of Appeal. The Notice of Appeal must be filed within 30 days from the date this Declaratory Statement is filed with the Agency Clerk of the Department of Revenue.

6 CERTIFICATE OF FILING I HEREBY CERTIFY that a true and correct copy of this DECLARATORY STATEMENT has been filed in the official records of the Florida Department of Revenue this _18 th day of January, CERTIFICATE OF SERVICE _NP Nancy Purvis Agency Clerk, Department of Revenue State of Florida I HEREBY CERTIFY that a true and correct copy of this DECLARATORY STATEMENT has been furnished by U.S. Mail to Stephen O. Cole and Andrew K. Macfarlane, Macfarlane Ferguson & McMullen, 625 Court Street, Suite 200, P.O. Box 1669, Clearwater, Florida 33756, on this _18th day of January, _NP Nancy Purvis Agency Clerk, Department of Revenue State of Florida