Were online and telephone-assisted end-of-life planning services subject to Florida sales tax?

Plain-English summary

The Department ruled that the provider's end-of-life memberships were nontaxable services. They included online and telephone assistance with advance directives, secure document storage and retrieval, law-change monitoring, provider education, and related support.

Members also received printed packets, guides, wallet cards, stickers, and magnets without a separate charge. Those items supported the service and were not themselves sold to members, so they did not turn the membership into a taxable retail sale.

The provider was the final consumer of those tangible items. It had to pay sales tax to its vendors or remit use tax when a vendor did not collect Florida tax.

What this means for you

Incidental materials can remain part of a nontaxable service when customers do not separately purchase them. That does not eliminate tax; it shifts the tax obligation to the service provider as the consumer of the materials.

Common questions

Were the membership services taxable? No.

Were the included packets and identifiers treated as retail sales? No, because members paid for services and were not separately charged for the materials.

Who owed tax on those materials? The provider, at purchase or through use-tax remittance.

Citations and references

• Fla. Stat. §§ 212.02, 212.05, 212.08, and 212.12(12) and Fla. Admin. Code rr. 12A-1.039 and 12A-1.091(14), as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 09A-040

Original ruling text

SUMMARY
QUESTION: Are the end-of-life services, provided by the Taxpayer, subject to sales
tax?
ANSWER: No. The end-of-life services, provided by the Taxpayer are not subject to
sales tax. The taxpayer is providing a non-taxable service. The Taxpayer will owe tax on
its purchase of tangible personal property used and consumed to provide the service.
August 6, 2009
XXX
Subject: Technical Assistance Advisement 09A-040
End-of-Life Services
Sales and Use Tax
Sections 212.02, 212.05, and 212.08, Florida Statutes (F.S.)
XXX, Inc. (“Taxpayer”)
FEI # XXX
Dear XXX:
This is in response to your letter dated March 31, 2009, received by this office on
April 6, 2009, requesting this Department's issuance of a Technical Assistance
Advisement (“TAA”) pursuant to section 213.22, F.S., and Rule Chapter 12-11, F.A.C.,
concerning the taxability of end-of-life services offered by your company. An
examination of your letter 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 of a TAA.
Issue
Whether end-of-life services, provided by the Taxpayer are subject to sales tax.
Facts
Your letter dated March 31, 2009, provides the following in part:
. . .XXX, Inc. is a start up business, committed to improving the end-of-life
experience for its customers and their loved ones. XXX corporate headquarters
are located in XXX, Florida and a second redundant site will be located in XXX,
XXX.
The products to be provided by XXX, Inc. include XXX and XXX. The XXX is
an online service with telephonic assistance available 24/7, to help people
complete the appropriate documents that communicate their healthcare choices if

Technical Assistance Advisement
Page 2 of 7
they are unable to speak for themselves. XXX then stores the documents,
contacts members if the laws change necessitating an update to their documents,
notifies and educates the appropriate people, and works with healthcare providers
to get the directive in the patient’s chart when it is needed.
XXX is an online repository where its customers can XXX information for their
loved ones in the event of XXX. This may include the location of XXX such as
XXX. It may also include XXX they would like to have XXX. . . .

Upon enrollment of an individual, XXX will provide a packet of forms, which
includes the appropriate state-specific advance directive form, and educational
booklet to assist the member in filling out the form correctly, and instructions to
return the forms to XXX for secure holding in XXX. All printed forms and the
educational booklet have been printed by a vendor to whom sales tax has been
paid by XXX. The enrollee will not be taking possession of any product or asset
belonging to XXX unless they choose to XXX. . . .

XXX will make the individual’s completed forms available online to providers
with whom the individual has involved in their care and who have appropriate
identifying information.

Along with your letter, you provided copies of a sample XXX Member Packet. The
Member Packet included examples of an Advance Directive Packet, the XXX, and the
Member Guide.
The Member Guide provides the following information regarding the Taxpayer’s
services:
XXX provides you with a variety of ways to let people know you are a member of
the XXX. An XXX wallet card provides XXX contact information to access your
AD. Stickers are provided for your insurance card, Medicare card (if applicable),
and State drivers license (unless prohibited by your state). Refrigerator magnets
serve to help alert the care team to check for your advance directive in the case of
a healthcare emergency.

In addition, XXX national education and public relations programs are part of a
process of informing healthcare providers about the XXX and its services.
Multiple membership identifiers and reminders work together with these outreach
programs to help identify XXX members to healthcare providers.

XXX also offers their XXX to members and the person(s) they designate in their
durable power of attorney for healthcare document as their healthcare agent. The

Technical Assistance Advisement
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XXX is a limited benefit that is available for advice or support in resolving
advance directive-related interpretation and enforcement issues.

Advance directives are documents, prepared in advance, that spell out the type of
healthcare you want or don’t want to receive and the person you want to make
your healthcare decisions if you are ever unable to make them for yourself.
Advance directive documents include a durable power of attorney for healthcare
and a living will. Some documents, depending on the state, include the option to
designate your choices for organ donation.

A living will is a type of advance directive that allows you to document your
choices about the medical treatment you want or don’t want if you are unable to
speak or act on your own. A living will may also be called a healthcare
declaration, a medical directive or a directive to physicians.

The XXX tracks all changes to State and Federal laws that might affect your
advance directive. If the regulations change so that your AD might be out of date
or no longer valid, we will contact you, provide you with the new form or
whatever information you may need to add or change, so that you can make the
change immediately.

The XXX form is a document that a new client completes to provide a list of people that
they desire to have copies of their Advance Directive. This includes such people as
healthcare agent, physicians, family and friends.
The Advance Directive Packet contains the legal forms, such as a living will and
healthcare proxy agents, that the client completes to be stored in the XXX. The packet
also includes instructions on how to complete the forms. The Taxpayer provided a copy
of the Alabama Advance Directive for Healthcare as an example.
Review of XXX .com provides the following description of services:
With the XXX ensures:
•

Advance Directives are legally accurate and completed correctly based on the
most current forms and instructions available for a given state.

•

Properly completed advance directives are stored electronically in the XXX
Healthcare Advance Directives XXX.

Technical Assistance Advisement
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•

Through XXX extensive marketing and public relations outreach, hospitals,
physicians and health plans are made aware of the existence of the Advance
Directives XXX so they can obtain the patient’s advance directive when needed.

•

XXX is available to verify that the directive is legal and accurate.

To further assist families during the difficult times when a family member is ill or has
passed away XXX. The XXX is a secured, confidential, electronic repository for
tracking the location of assets, the location of other important items or documents, and
for storing important messages to loved ones. The XXX makes the stored information
retrievable at the time and to the designated people in accordance with the individual
member’s specifications.
Taxpayer’s Position
The Taxpayer asserts that its services do not involve the transfer of tangible personal
property and are, therefore, not subject to sales tax. Further, the Taxpayer states that the
packet of material sent to the individual is an “inconsequential element of the enrollment
in [the] online and telephonic services . . . .”
Law and Discussion
Section 212.02, F.S., provides in part:
(14)(a) “Retail sale” or a “sale at retail” means a sale to a consumer or to any
person for any purpose other than for resale in the form of tangible personal
property or services taxable under this chapter, . . .
(15) “Sale” means and includes:
(a) Any transfer of title or possession, or both, exchange, barter, license, lease, or
rental, conditional or otherwise, in any manner or by any means whatsoever, of
tangible personal property for a consideration.

(16) “Sales price” means the total amount paid for tangible personal property,
including any services that are a part of the sale, . . .

(20) “Use” means and includes the exercise of any right or power over tangible
personal property incident to the ownership thereof, or interest therein, except that
it does not include the sale at retail of that property in the regular course of
business.

Technical Assistance Advisement
Page 5 of 7
Section 212.05, F.S., provides in part:
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.
(1) For the exercise of such privilege, a tax is levied on each taxable transaction
or incident, which tax is due and payable as follows:
(a)1.a. At the rate of 6 percent of the sales price of each item or article of tangible
personal property when sold at retail in this state, computed on each taxable sale
for the purpose of remitting the amount of tax due the state, and including each
and every retail sale.

(1)(b) At the rate of 6 percent of the cost price of each item or article of tangible
personal property when the same is not sold but is used, consumed, distributed, or
stored for use or consumption in this state . . . .

Section 212.12(12), F.S., provides in part:
It is hereby declared to be the legislative intent that, whenever in the construction,
administration, or enforcement of this chapter there may be any question
respecting a duplication of the tax, the end consumer, or last retail sale, be the sale
intended to be taxed and insofar as may be practicable there be no duplication or
pyramiding of the tax.

Rule 12A-1.039, F.A.C., provides in part:
(1)(b) A sale for resale is exempt from the tax imposed by Chapter 212, F.S., only
when the sale for resale is in strict compliance with the provisions of this rule. For
purposes of this rule, a “sale for resale” includes the following sales, leases, or
rentals when made to a person who is an active registered dealer. This is not
intended to be an exhaustive list.

1. The sale of tangible personal property to a dealer when such property will be
   resold to the dealer’s customers.

Technical Assistance Advisement
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(c) For purposes of this rule, “active registered dealer” means a person who is
registered with the Department as a dealer for sales tax purposes and who is
required to file a sales and use tax return during each applicable reporting period,
as provided in Section 212.11(1), F.S.

Rule 12A-1.091(14), F.A.C., provides in part:
(14)(a) Any person, whether registered or unregistered, who has purchased or
leased tangible personal property either in this state or from out-of-state for use,
consumption, or distribution, or for storage to be used or consumed in this
state without having paid sales tax on such property if subject to tax, is required to
remit use tax on the cost price and on the lease of such property. . . . If such
person is unregistered, use tax is to be remitted on form DR-15MO, Out-of-State
Purchase Return (incorporated by reference in Rule 12A-1.097, F.A.C.), on or
before the 20th day of the first month after the end of the calendar quarter during
which any such property first came to rest and became a part of the general mass
of property in this state. . . .

Section 212.05, F.S., provides that the sale of tangible personal property is subject to tax.
The tax is based upon the sales price of the tangible personal property, including any
services that are part of the sale. See section 212.02(16), F.S. Transactions involving
only the sale of services, except those authorized for taxation by Chapter 212, F.S., are
generally not subject to tax.
The Taxpayer’s XXX do not constitute the sale of tangible personal property, as defined
in section 212.02(19), F.S., but rather constitute the sale of services not taxed by Chapter
212, F.S. Section 212.02(15)(a), F.S., provides that a “sale” includes the transfer of title
or possession of tangible personal property for a consideration. The facts presented
indicate that some items of tangible personal property (e.g, Member Packets and Member
Guides, wallet cards, stickers, and magnets) are provided to clients by the Taxpayer.
These items are provided to clients in connection with and in furtherance of the services
provided by the Taxpayer. Clients are not charged for these items. On the facts
presented, there is no “sale” (and therefore no “retail sale”) of the items by the Taxpayer
to clients. The consideration paid by the Taxpayer’s clients is for the purchase of
services and does not include the purchase of tangible personal property. Accordingly,
with regard to the products in question, the Taxpayer is not required to register with the
Department as a dealer for sales and use tax purposes.
As stated, the Taxpayer does not make retail sales of tangible personal property. Because
there is no taxable retail sale to the Taxpayer’s clients, the items provided to clients
cannot be purchased for resale. Under the facts presented, the Taxpayer uses and
consumes tangible personal property, including the described items that are provided to

Technical Assistance Advisement
Page 7 of 7
customers, in rendering a non-taxable service. Section 212.12(12), F.S., provides that it
is the legislative intent that the “end consumer, or last retail sale” is “the sale intended to
be taxed.” In this instance, the last retail sale of items used and consumed by the
Taxpayer is the sale to the Taxpayer, who is the end consumer. Thus, the Taxpayer
should remit tax to its vendors when it purchases these items.
The Taxpayer should remit use tax on the cost of these materials, if the Taxpayer’s vendor
does not collect Florida sales tax. The use tax should be remitted on form DR-15MO, Outof-State Purchase Return. See Rule 12A-1.091(14), F.A.C.
Conclusion
The end-of-life services, provided by the Taxpayer are not subject to sales tax. The
taxpayer is providing a non-taxable service. The Taxpayer will owe tax on its purchase
of tangible personal property used and consumed to provide the service.
This response constitutes a Technical Assistance Advisement under section 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 section 213.22, F.S. Our response is predicated
on those facts and the specific situation summarized above. You are advised that
subsequent statutory or administrative rule changes, or 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., and are subject to disclosure to the public under
the conditions of section 213.22, F.S. Confidential information must be deleted before
public disclosure. In an effort to protect confidentiality, we request 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,

Brinton J. Hevey
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 488-7157

Record ID: 62529