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Tampa Bay Rays sues Florida Dept. of Revenue over sales tax bill


Published:   |   Updated: June 22, 2013 at 10:02 PM

For years now, the Tampa Bay Rays and the State Department of Revenue having been going back and forth behind closed doors over a tax bill of roughly $1.4 million.

After extended negotiations, the Rays and the state reached an understanding over roughly $850,000 of that amount, which a state audit concluded was the amount of sales tax the team had underpaid between 2006 and 2009. That left about half a million dollars still in dispute.

The closed-door approach came to an end this month when the Rays filed a lawsuit against the state, contesting two areas where state auditors claim the team owes back taxes.

The team argues it shouldn't have to pay taxes on meals that Tropicana Field concessionaire Centerplate serves in luxury suites.

Rays officials also say the team shouldn't have to pay taxes on the portion of ticket sale proceeds it gives to the City of St. Petersburg.

The tax fight started with a 2011 state audit of sales taxes the team paid between between June 1, 2006, and May 31, 2009, according to the lawsuit, filed June 12. The state concluded the Rays owed $1.1 million in taxes, plus $300,000 in interest.

Roughly $850,000 of that bill was settled, leaving about $567,000 in contention as of April 2011. The outstanding amount stands at about $505,000.

In its lawsuit, filed by the Tampa law firm of Holland & Knight, the team says its contract with Centerplate stipulates that the concessionaire include sales tax in the amount it charges the Rays for the meals. Centerplate, though, doesn't break out the amount it charges for sales taxes on it invoices, according to the lawsuit.

The Rays also contend the state is misconstruing its relationship with the city.

The state has concluded the ticket sale proceeds in question should be taxed because they represent a kind of rent the team pays for using Tropicana Field; but Rays officials argue the team is not a tenant but, rather, manages the stadium and gives the city a cut of ticket sales as part of that arrangement, the lawsuit states.

The team does lease from the city certain parts of Tropicana Field - such as the locker rooms - and says the Rays pays sales tax on those rents, according to the lawsuit. That arrangement, though, is separate from the one involving the management of the property, the team argues in its lawsuit.

Calls to the Department of Revenue and Bradford Kimbro, the executive partner of Holland & Knight in Tampa, were not returned.

sthompson@tampatrib.com

(727) 215-6504

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