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Florida Condo & HOA Legal Blog News & Updates on Condo & HOA Laws & Legislation in the State of Florida

Check Those Electric Bills – You May be Entitled to a Refund

Posted in Assessment Collection

Tired of ever increasing electric bills?  Have you ever really looked closely at your community association’s electric bill?  Do you understand all of those charges and fees?  If not, there may be money waiting for your association to claim as a refund. The Florida Administrative Code provides a sales tax exemption on electric power when that power is sold to and used by cooperatives, condominiums, and certain other residential facilities including, in many cases, homeowners associations.  In order to obtain the exemption, the utility provider must have written documentation on file establishing that the customer is entitled to the exemption. FPL requires customers to complete a certificate that indemnifies it from any liability for failing to collect and remit the tax to the Department of Revenue.  You can find the Exemption Certificate on its website. That’s where it gets a little tricky.  According to the code, if any part of the electric power or energy is used for a non-exempt purpose, the entire sale is subject to tax.  So if your electrical service powers a restaurant that is open to the public, a golf course that charges greens fees or any other facilities that require payment of a fee, you may be out of luck.  What if your electrical service powers the residential tower (common area hallways, elevators and the like) and portions of the property that are non-exempt?  Under the current codes that means you are responsible for sales tax on the entire bill.  It is not acceptable to make calculations or allocate the percentage of exempt and non-exempt uses that run through a single meter.   Separate meters are required when you have exempt and non-exempt facilities. It gets even trickier when there are uses that are ancillary to the residential use.  Does your community have a sales and leasing office?  What about an office used by the property manager?  Will that use as an office eliminate the exemption?  Some tax guides clearly say “yes” – any use other than residential use means taxes must be paid on the entire usage from that meter.   Even simple vending machines or coin-operated laundry machines powered by the same meter may thwart your efforts. If your association qualifies for the exemption but has paid sales tax on electric bills, ask the Department of Revenue for a refund.  The law allows the customer to obtain a refund for taxes paid for up to 36 months.  

  • Stephen Cluney

    You need to go one step further by mentioning that when they apply for this refund it will go back for three years and you apply for this to the Florida Department of Revenue. Let’s not forget that from this point forward you are
    exempt from paying sales tax on electric usage.
    Stephen