Was a patient-specific medical-record information service subject to Florida sales tax?

Subject

Patient Information Service

Plain-English summary

The patient-specific information service was not subject to Florida sales or use tax. The company responded only to a customer's specific request, gathered and scanned the patient's treatment and billing records, compiled them in the requested form, obtained certification, and delivered the information to the authorized requester.

Florida did not treat that work as an enumerated detective or private-investigation service or as a taxable generic information product. The company was the consumer of the materials and supplies used to perform the service and had to pay tax on those purchases.

What this means for you

The customer-specific nature of the information mattered. The ruling distinguished an individualized patient report from information compiled for reuse or distribution to multiple customers.

Common questions

Q: Was the service charge taxable? No, on the stated patient-specific facts.

Q: Did a per-page copy charge change the result? The ruling still found the described service nontaxable.

Q: Did the provider owe any tax? Yes, on materials and supplies it used to perform the service.

Citations and references

• Fla. Stat. § 212.05 — sales and use tax
• Fla. Stat. § 212.08(7)(v) — professional and personal services
• Fla. Admin. Code r. 12A-1.001(16) — personal information and service transactions
• Fla. Admin. Code r. 12A-1.062 — information services
• Fla. Admin. Code r. 12A-1.0092 — detective and protection services
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00A-075

Original ruling text

SUMMARY

QUESTION: Whether the service of providing specifically
requested information relating to patient treatment at
hospitals or treatment centers is subject to sales tax?

ANSWER - Based on Facts Below: Under Rule 12A-1.0092,
F.A.C., certain investigative services are taxable in the
State of Florida. However, the investigative services
performed by this Taxpayer are not specifically enumerated
in Industry Numbers 7381 and 7382 of the Standard
Industrial Classification Manual, 1987. The services in
these sections include, inter alia, services performed by
detective agencies and private investigation firms. The
summary of a patient's treatment offered by Taxpayer are
not subject to sales or use tax in the State of Florida.
The only taxes Taxpayer should pay are taxes on the
materials and supplies used to perform these services.

Nov 15, 2000

Re: Technical Assistance Advisement 00A-075
XXX ("Taxpayer")
Sales and Use Tax - Patient Information Service
Statutes: Sections 212.05, 212.08(7)(v), F.S.
Rules: 12A-1.001(16), 12A-1.0092, 12A-1.062, F.A.C.

Dear :

This response is in reply to your letter dated August 23, 2000,
requesting the Department's issuance of a Technical Assistance
Advisement ("TAA") pursuant to s. 213.22, F.S., and Chapter 1211, F.A.C., regarding the referenced matter and parties. An
examination of your petition has established that you have
complied with the statutory and regulatory requirements for
issuance of a TAA. Therefore, the Department is hereby granting
your request for issuance of a TAA.

FACTS

Taxpayer has entered into contractual arrangements with
hospitals and other Patient service providers, under which it
provides specifically requested information relating to patient
treatment at these hospitals and treatment center to the
requesting parties which include attorneys, insurance companies
and governmental agencies.

Once the scope of the request is determined, Taxpayer contacts
the hospital or other treatment facility, accesses the records,
scans the patient chart, billing information and all other
documents relating to the specific request of the customer. The
information is then transferred to a server located in Atlanta,
GA, where it is printed and compiled in the specific manner
requested by the customer. Once the needed copies are obtained,
Taxpayer prepares a letter of certification, which is provided
to the appropriate medical officer of the hospital for
conformation that the records in question are accurate. The
requested information is then forwarded to the attorney,
insurance company, governmental agency or other authorized
individual.

Taxpayer charges the customer a flat fee for each patient
information request plus a minimal per page charge for copies
provided. No information is examined or compiled unless
specifically requested by the customer, and no "generic" or non
patient specific information is provided to the customers.

APPLICABLE LAW

Section 212.05, F.S., provides in pertinent part:

Sales, storage, use tax.--It is hereby declared to be the
legislative intent that every person is exercising a
taxable privilege who engages in the business of selling
tangible personal property at retail in this state,
including the business of making mail order sales, or who
rents or furnishes any of the things or services taxable
under this chapter, or who stores for use or consumption in
this state any item or article of tangible personal

property as defined herein and who leases or rents such
property within the state.

Section 212.08(7)(v), F.S., provides in pertinent part:

Professional services.--

Also exempted are professional, insurance, or personal
service transactions that involve sales as inconsequential
elements for which no separate charges are made.

Rule 12A-1.001, F.A.C., provides in pertinent part:

(16)(a) Professional, insurance or personal service
transactions which involve sales as inconsequential
elements for which no separate charges are made are exempt.

(b) The exemption described in paragraph (a) does not apply
to personal service transactions which involve sales of
tangible personal property, whether or not as
inconsequential elements, when the service provided is an
information service involving the furnishing of printed,
mimeographed, multigraphed matter, microfiche, microfilm,
or matter duplicating written or printed matter. The
furnishing of information, including a written report to a
person of a personal or individual nature and which is not
or may not be substantially incorporated in reports
furnished to other persons, is not an information service
within the meaning of the law and is exempt. In such cases
the person furnishing the information is required to pay
the tax on the purchases of tangible personal property used
by him in connection therewith. See Rule 12A-1.062, F.A.C.

Rule 12A-1.062, F.A.C., provides in pertinent part:

The sale of information services involving the furnishing
of printed, mimeographed, multigraphed matter, or matter
duplicating written or printed matter, other than professional
services and services of employees, agents, or other persons
acting in a representative or fiduciary capacity, are taxable.

(2) Information services furnished to newspapers, radio and
television stations are exempt.

(3) "Information Services" means and includes the services
of collecting, compiling, or analyzing information of any
kind or nature, or furnishing reports thereof to other
persons. The charge for furnishing information services,
such as newsletters, tax guides, research publications, and
other written reports of compiled information, which are
not produced for and provided exclusively to a single
customer, is taxable.

Rule 12A-1.0092, F.A.C. provides in pertinent part:

Detective, Burglar Protection, and Other Protection
Services.

(1) Persons who provide any of the services enumerated in
Industry Numbers 7381 and 7382 of the Standard Industrial
Classification Manual, 1987, are dealers in a taxable
service and are required to charge sales tax on the total
taxable sales price of the service.

DISCUSSION

Under Rule 12A-1.0092, F.A.C., certain services are taxable in
the State of Florida. However, the investigative services you
have described are not specifically enumerated in Industry
Numbers 7381 and 7382 of the Standard Industrial Classification
Manual, 1987. The services in these sections include, inter
alia, detective agencies and private investigation firms.

CONCLUSION

The services offered by Taxpayer are not subject to sales or use
tax in the State of Florida. The only taxes Taxpayer should pay
are taxes on the materials and supplies used to perform these
services.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only

under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory and
administrative rule changes or those judicial interpretations of
the statutes or rules upon which this advice is based may
subject similar future transactions to a different treatment
than expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request that you provide the undersigned
with an edited copy of your request for Technical Assistance
Advisement, the backup material and this response, deleting
names, addresses and any other details which might lead to
identification of the taxpayer. Your response should be
received by the Department within 15 days of the date of this
letter.

Sincerely,

Michael T. Cavanaugh
Tax Law Specialist
Technical Assistance and Dispute Resolution
850-922-9411

Enclosure
Control # 42303