Were meals sold by a continuing-care retirement community taxable to residents, nonresidents, and guests?

Subject

Meals

Plain-English summary

Meals charged to facility residents were exempt from Florida sales tax under all three described payment arrangements. That included meals within the monthly service fee, additional meals under a monthly plan, and additional meals bought outside either plan.

The facility primarily cared for aged residents who were ill, infirm, incapacitated, or otherwise dependent on special care and attention. Meals sold to nonresidents and guests did not qualify because those purchasers were not residents or inmates of the facility. Guest and nonresident room rentals were also taxable.

What this means for you

The exemption followed the resident's status within a qualifying care facility, not simply the seller's identity. The same facility had to tax meals and rooms sold to outsiders.

Common questions

Q: Were extra resident meals taxable if separately charged? No. The ruling exempted both monthly-plan extras and meals outside the plans.

Q: Were guest meals exempt because they were served inside the facility? No. Nonresidents and guests were not within the statutory resident or inmate category.

Q: Were guest rooms taxable? Yes.

Citations and references

• Fla. Stat. § 212.08(7)(i) — meals and rooms at qualifying care facilities
• Fla. Stat. chs. 400 and 651 — facility licensing described in the ruling
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-008

Original ruling text

Feb 17, 1993

Re: TAA 93A-008
Sales Tax; Meals Sold and Served to Residents of a
Retirement Community

Dear :

Thank you for your letter dated November 20, 1992, in which
you have asked for a Technical Assistance Advisement, on the
above subject matter for XXX, which has corresponded with our
department several times on the subject. You wish
clarification, for tax purposes, on the different types of meal
plans served to the residents, non-residents and guests.

Your letter provides in part:

"XXX, a division of XXX [hereafter Owner'], owns and operates the XXX [hereafterFacility'] located in XXX."

You are seeking a Technical Assistance Advisement on the
following questions:

"1. Are charges to residents for meals provided to them
under the Monthly Service Fee taxable to the residents?
"2. Are charges to residents for additional meals provided
to them under the Monthly Plan taxable to the residents?
"3. Are charges to residents for additional meals provided
to them when requested outside the Monthly Service Fee
and/or the Monthly Plan taxable to the residents?
"4, Are charges for a meal or meals to non-residents or
guests taxable to the non-resident or guest?"

Based on the information provided by the [Facility] in
previous correspondence and in your letter, the [Facility] is
licensed both as a Skilled Nursing Facility (SNF') under Part I, Chapter 400, F.S., and as an Adult Congregate Living Facility (ACLF') under Part II, Chapter 400, F.S. In addition,
[Facility] has a Certificate of Authority to operate as a

Continuing Care Retirement Community under Chapter 651 F.S. and
as such continues to honor Lifecare Contracts."

The SNF' is a nursing home which provides medical and personal hygiene care, the average age is 87 and most residents have chronic illnesses. TheACLF' is divided into two areas,
one is independent living and the other is assisted living. In
these two facilities the [Facility] provides personal assistance
with bathing, dressing, grooming, eating, ambulation,
administration of medication, health care, social and leisure
activities, by nurses and/or staff members, the average age of
residents being 85.
The letter from `Owner' states in part:

"[Facility] serves older people (with an average age of
86), most of whom have chronic illnesses and have a wide
range of personal care needs some of which are provided by
the [Facility] staff. Because of their age, most residents
will become temporarily or permanently incapacitated either
mentally or physically at some time during their residency
at [Facility]. Because of the obvious benefits to the
resident, we encourage his or her independence as much as
possible but if assistance is needed it is always
available."

Based on the information provided, the residents living in
the [Facility] are "dependent on special care and attention ",
and the meals served to them are, therefore, exempt from sales
tax, as provided in Section 212.08(7)(i), F.S., which states as
follows:

"Hospital meals and rooms. -- Also exempt from payment of
the tax imposed by this chapter on rentals and meals are
patients and inmates of any hospital or other physical
plant or facility designed and operated primarily for the
care of persons who are ill, aged, infirm, mentally or
physically incapacitated, or otherwise dependent on special
care or attention."

The [Facility] qualifies for the exemption on meals to its
residents since it would be a "facility designed and operated

primarily for the care of persons who are ill, aged, infirm,
mentally or physically incapacitated, or otherwise dependent on
special care or attention".

Therefore, based on the above, meals charged to and paid by
residents under the Monthly Service Fee; additional meals
provided under the Monthly Plan; and additional meals provided
outside the Monthly Service Fee and/or the Monthly Plan are not
subject to the sales tax.

The charge made for meals to non-residents and guests would
be taxable to the non-resident or guest, as they are not
"inmates" of the [Facility], within the meaning of s.
212.08(7)(i), F.S. Also, the rental of rooms to the nonresidents or guests is taxable to the non-resident or guest.

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 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 and your request
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.
Your name, address, and any other details which might lead to
identification of the taxpayer must be deleted by the Department
before disclosure. In an effort to protect the confidentiality
of such information, we request you notify the undersigned in
writing within 15 days of any deletions you wish made to the
request or the response.

Sincerely,

Sharon Blair

Technical Assistance

SB/pb
Con. #5677