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Sales and Use Tax – TAA 15A-012 – Public Works Contract

QUESTION: WHETHER THE SALE OF A MEAL, WHICH IS CUSTOMARILY HEATED BY THE END USER AFTER PURCHASE, IS SUBJECT TO TAX?

ANSWER: THE SALE OF THE MEAL TO THE END USER IS EXEMPT FROM TAX, BECAUSE IT IS CUSTOMARY FOR THE END USER TO HEAT THE MEAL AFTER PURCHASE AND BEFORE CONSUMING.

September 30, 2015

Re: Technical Assistance Advisement 15A-012 Florida Sales and Use Tax

Heat and Serve Meals
Sections 212.05 and 212.08, Florida Statutes (“F.S.”) Rule 12A-1.011, Florida Administrative Code (“F.A.C.”) Petitioner: XXXX (“Taxpayer”)

Dear XXX:

This letter is a response to your petition received on September 8, 2015, for the Department of Revenue’s (“Department”) issuance of a Technical Assistance Advisement ("TAA") concerning the above-referenced petitioner and matter. Your petition has been carefully examined, and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of Section (“s.”) 213.22, F.S.

FACTS PRESENTED

The following facts are based on documents and statements provided by Taxpayer, as well as Departmental research.

Taxpayer has contracted with the State (via the Department of Corrections (“DOC”)) to sell various items in correctional institutions (“CI”) around the State directly to inmates. One of the items sold to the inmates at the CI are prepackaged meals. These meals do not require refrigeration. After purchase, the inmate takes the meal to a microwave, heats the meal, and then consumes the meal. Some of the samples provided to the Department involve meals containing meat and raviolis.

REQUESTED ADVISEMENTS

Taxpayer inquires as to whether the sale of the meal to the inmates is subject to tax.

LAW & DISCUSSION

Section 212.05, F.S., provides every person is engaged in a taxable privilege when engaging in the business of selling, at retail, tangible personal property. In order to exercise such a privilege, tax is levied at a rate of 6%.1 see s. 212.05(1)(a)1.a., F.S. Tangible personal property is defined as “personal property which may be seen, weighed, measured, or touched, or is in any manner perceptible to the senses ....” See s. 212.02(19), F.S. Therefore, the sale of food in Florida is subject to tax, unless an exemption applies.

Florida sales or use tax is not due if the item is specifically exempt by Chapter 212, F.S. It is well-settled law exemptions are strictly construed against the taxpayer, causing the burden of proof for the exemption to be on the taxpayer. See State ex. rel Szabo Food Servs., Inc. of N.C. v. Dickinson, 286 So. 2d 529, 530-32 (Fla. 1973); Green v. City of Pensacola, 126 So. 2d 566, 569 (Fla. 1961); State v. Thompson, 101 So. 2d 381, 386 (Fla. 1958). Any doubt as to an exemption is resolved favorably towards the State. See Szabo Food Servs., 286 So. 2d at 531; United States Gypsum Co. v. Green, 110 So. 2d 409, 413 (Fla. 1959).

One such exemption from the tax imposed in Chapter 212, F.S., is a grocery exemption. See s. 212.08(1), F.S. However, food sold for immediate consumption is subject to tax. See s. 212.08(1)(c)3., F.S.; see also Rule 12A-1.011(4)(b)1., F.A.C. But, the previously cited rule further states that if the food sold is not ready for immediate consumption, which is determined by “customary consumption practices[,]” then the food is exempt from tax (i.e., the food is generally heated by the purchaser).

Based on the samples provided, the Department finds the meals sold to the inmates to customarily require heating by the inmates. Therefore, the meals sold to the inmates are exempt from tax.

CONCLUSION

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, 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 s. 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 10 days of the date of this letter.

Sincerely,

David J. Brennan, Jr., Esq.
Senior Attorney
Technical Assistance & Dispute Resolution Florida Department of Revenue

Record ID: 203870

End Notes:

1. Counties are authorized to charge a discretionary sales surtax, up to 1.5%, in addition to the State sales tax rate. See ss. 212.054 and 212.055, F.S.

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