Tenants on Tribal Lands Not Liable for Florida’s Rental Tax

Tenants on Tribal Lands Not Liable for Florida’s Rental Tax

The Seminole Tribe of Florida won a huge victory when the Eleventh Circuit Court of Appeals ruled last week that non-Indian tenants who lease property from the Tribe on tribal lands are exempt from Florida’s Rental Tax. The Court, in Seminole Tribe of Florida v. Stranburg, concluded that 25 USC 465, which bans taxes on Indian lands or rights, prohibits the State of Florida from collecting the tax authorized under F.S. Section 212.031 (the tax assessed on commercial rents which is levied on the tenant and remitted to the State by the Landlord). However, the Court upheld a separate tax on utility services. The Court distinguished the Utility Tax (F.S. 203.01(1)(a)(1)) from the Rental Tax in that the Utility Tax is a tax imposed for the purpose of “conducting a utility or communication services business”. The provider of the utility services is liable for the tax even if the tax is passed on to the consumer on the utility bill. Therefore, there is no burden on the Indian land.

The Seminole Tribe, as well as other Tribes in Florida and throughout the Circuit, could greatly benefit from this ruling. While the Seminoles have large casino and hotel holdings in Florida that have numerous retail and other tenants, the ruling could open the door for the Tribes to expand into larger commercial operations including office and shopping centers, allowing a competitive advantage to Tribal landlords.