Were monthly telephone wellness-check and reminder services subject to Florida sales tax?

Subject

Reminder Services

Plain-English summary

The monthly telephone wellness-check and reminder services were not subject to Florida sales tax. The system called subscribers at chosen times, asked them to press a key to signal whether help was needed, and contacted up to three designated numbers after no answer or a request for help. The company itself provided no further assistance.

Reminder calls delivered a requested verbal message and required no response. Subscribers needed touch-tone telephones, but the company installed no equipment in their homes. The Department did not classify these services as taxable detective, guard, armored-car, or security-system protection.

The provider still owed tax on taxable items or services it purchased to perform the subscriptions.

What this means for you

The ruling distinguished a communication and reminder service from a provider that supplied protection equipment or direct security and emergency response.

Common questions

Q: Were subscriber charges taxable? No.

Q: Did the company install monitoring equipment? No.

Q: Did the provider owe any sales or use tax? It owed tax on taxable purchases used to render the service.

Citations and references

• Fla. Stat. §§ 212.02(17), (20), 212.05(1)(k), and 212.08(7)(v) — sales price, tangible property, protection services, and personal services
• Fla. Admin. Code r. 12A-1.001 — sales and service rules
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 93A-053

Original ruling text

Aug 03, 1993

RE: TAA 93A-053
Sales Tax; Wellness Check and Reminder Services
Section 212.08(7)(v), F.S.
Rule 12A-1.001, F.A.C.

Dear

This acknowledges receipt of your letter to the Department
of Revenue, dated May 10, 1993, requesting a Technical
Assistance Advisement on the issue described below.

FACTS

As ascertained from your letter, the following conclusions
of fact have been reached by the Department. XXXXX
(hereinafter, the Company) intends to offer wellness check and
reminder services to individual subscribers in Florida
(hereinafter, Subscriber(s)). A Subscriber will pay a monthly
charge for these services.

For a Subscriber requesting wellness check services, the
Company (by computer or mechanically) will call the telephone
number of the Subscriber at specified times each day as
designated by the Subscriber and ask the Subscriber to respond
by pushing "1" if the Subscriber does not require assistance, or
by pushing "0" if the Subscriber does require assistance. If
the Subscriber does not answer the telephone after 10 rings, the
Company telephones up to three designated numbers requesting
assistance for the Subscriber. The Company does not otherwise
offer any assistance itself.

If reminder services are to be provided, then at the times
designated by the Subscriber, the Subscriber is called and
provided with a requested verbal reminder. The Subscriber is not
directed or required to respond to the verbal reminder messages.

For both the wellness check and the reminder services, the

Company may use a computer dialing and response system. In
order for the Subscriber to receive the services, the Subscriber
must have a touch tone telephone, but the Company does not
install any equipment in the Subscriber's residence and all
contact is made by telephone.

Discussion and Determination

The quoted passages from the Florida Statutes (F.S.) and
the Florida Administrative Code (F.A.C.), are pertinent to the
issues raised in your letter.

Section 212.02, F.S., provides in pertinent part as
follows:

"(17) `Sales price' means the total amount paid for
tangible personal property, including any services that are
a part of the sale,..."

Therefore, the services performed by your company shall be
included in the "sales price."

However, the Department is also guided by s. 212.08(7)(v),
F.S., which provides as follows:

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

Therefore, an exempt professional service is one wherein no
charge is separately stated for inconsequential elements of
tangible personal property.

Section 212.02(20), F.S., defines "tangible personal
property," as follows:

"`Tangible personal property' means and includes personal
property which may be seen, weighed, measured, or touched
or is in any manner perceptible to the senses, ...."

As provided in s. 212.08(7)(v), F.S., "professional

services" which involve the sale of inconsequential elements of
tangible personal property are exempt.

However, the Department is also guided by s. 212.05, F.S.,
which provides, in pertinent part, as follows:

"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,... 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:

"(k) At the rate of 6 percent on charges for all:
"1. Detective, burglar protection, and other protection
services (SIC Industry Numbers 7381 and 7382).
"2. Nonresidential cleaning and nonresidential pest control
services (SIC Industry Group Number 734).
"As used in this paragraph, "SIC" means those
classifications contained in the Standard Industrial
Classification Manual, 1987, as published by the Office of
Management and Budget, Executive Office of the President."
(Emphasis added).

The wellness check and reminder services provided by
Company do not come within the purview of detective, guard,
armored car, or security system services, which services became
subject to tax beginning September 1, 1992, pursuant to s.
212.05(1)(k), F.S.

Therefore, it is the determination of the Department that
the services provided by the Company are not subject to Florida
sales tax. However, the Company owes tax on its purchases of
taxable items or services used in rendering its service to its
customers.

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
based 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,

Nydia Men‚ndez
Technical Assistant

NM/pb
Con. #8808