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Florida Sales Tax: Nursing Homes


The purpose of this article is to discuss the Florida sales and use tax treatment for rent between (1) the nursing home and its landlord and (2) the nursing home and its tenants. A popular state for retirement, Florida is home to an abundance of assisted living facilities and nursing homes. As such, nursing homes are a large source of revenue for the state and subject to unique sales tax treatment. Because the Florida Department of Revenue has a habit of focusing audits on this industry, it is of particular importance that the failure to follow the sales tax rules for this industry can result in a substantial Florida sales tax assessment.

1. Lease of Premises to Nursing Home - Is the rent subject to sales tax?

In Florida, commercial rentals are subject to sales tax. While nursing homes are considered a commercial business, the sales tax treatment of nursing home rentals is different from typical commercial rentals.

Florida section 212.031(1)(a)2., F.S., imposes sales tax on commercial rent as follows:

“. . . the legislative intent that every person is exercising a taxable privilege who engages in the business of renting, leasing, letting, or granting a license for the use of any real property unless such property is . . . [u]sed exclusively as dwelling units.”

Nursing home owners rent their property from landlords, often related landlords, for the purpose of re-renting to those in need of assisted living. As such, they are leases for re-lease and exempt from sales tax. However, not all portions of nursing homes are re-rented. Therefore, not all of the rental is exempt from Florida sales tax as a re-rental. The trick is establishing a clear calculation for what is taxable and what is exempt in a why that can be justified and accepted by the Florida Department of Revenue.

Virtually all nursing homes include some commercial areas used for purposes other than assisted living, such as management offices, maintenance areas, etc. Florida statutes give clear directions on how to determine what portion of a rented property are exempt assisted living facilities or nursing homes.

Further, sec. 212.031(1)(b), F.S., provides in part:

“The portion of the premises leased or rented by a for-profit entity providing a residential facility for the aged will be exempt on the basis of a pro rata portion calculated by combining the square footage of the areas used for residential units by the aged and for the care of such residents and dividing the resultant sum by the total square footage of the rented premises.”

The issues surrounding the commercial and residential nature of nursing homes has come in up court cases, which have affected the interpretation of the laws in this area. Unfortunately, Florida’s administrative code has not been updated to reflect applicable case law. As a result, taxpayers unfamiliar with Florida’s sales tax laws may research the taxability of nursing home rentals and uncover invalid information. Rule 12A 1.070(14)(b), F.A.C., provides that only areas accessed and used by the facility residents are exempt. However, a Florida court ruled that only areas of a nursing home used for commercial purposes are subject to tax on commercial rentals. See, Beverly Enterprises of Florida, Inc. v. DOR, Fla. 18th Cir. Ct. 1996 (Case No. 94-2259-CA-16-L). While the Department of Revenue, as a whole, has been following Beverly Enterprises regarding the nursing home facilities at issue, not all auditors are familiar with this ruling and may attempt to assess a taxpayer for areas not physically used by the tenants at the assisted living facility, relying on the invalid rule as opposed to the current case law.

As a result, if a portion of the nursing home premises is used for strictly commercial purposes, then that portion of the rent is subject to sales tax. However, if any areas of nursing home property used for patients or in furtherance of their providing for the guests (such as common areas), then the rental consideration paid to the landlord is exempt from sales tax under the lease for re-lease exemption. This latter part is true even if parts of the nursing home are not directly accessed by residents of the facility.

2. Lease of Nursing Home to Residents - Are the charges to nursing home residents subject to Florida sales tax or Florida transient rentals tax?

It is a common misconception that only commercial real property rentals are subject to tax in Florida. In fact, all real property rentals are subject to tax with certain exemptions. For example, there is an exemption for real property residential leases in writing for more than six months. This exemption applies to most residential leases and also exempts the lease from local taxes on transient rentals. However, there is also a specific exemption for the lease between a nursing home and its residents under sec. 212.08(7)(i), F.S., which provides in pertinent part:

“…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...”

As a result, the charges to the residents for living accommodations and meals, made by the nursing home, are exempt from sales tax. However, as a dwelling unit, nursing they must be fall under Florida’s transient rental taxes as well.

Florida’s transient rentals tax imposes tax in sec. 212.03(1)(a), F.S. on the privilege of:

“…renting, leasing, letting, or granting a license to use any living quarters or sleeping or housekeeping accommodations in, from, or a part of, or in connection with any hotel, apartment house, rooming house, tourist or trailer camp, mobile home park, recreational vehicle park, condominium, or timeshare resort.”

While the statue’s primary exemption addresses residential leases of more than six months, Rule 12A-1.061(2)(c), F.A.C. specifically addresses nursing homes:

“Institutions designed and operated primarily for the care of persons who are ill, aged, infirm, mentally or physically incapacitated or for any reason dependent upon special care or attention are not providing transient accommodations to the patient, as provided in Section 212.03, F.S., and are not required to register with the Department.”

Consequently, the lease between a nursing home and its residents are exempt from both Florida’s sales tax on rent and Florida’s transient rentals tax. If the lease is exempt from sales tax on transient rentals, then it is also exempt from the local bed taxes, resort taxes, and similar taxes imposed by many counties in Florida.


In summary, there are two transactions with special tax treatment that nursing home owners should be cognizant of. The first is the rental between a landlord and a nursing home. While traditionally such commercial rentals are subject to sales tax, the lease for release exemption applies not just to the individual units but also to non-commercial areas of the nursing home used in furtherance of operating the assisted living facility. In addition, such transactions may be considered dwelling units exempt from tax.

The second transaction with special tax treatment is the one between the nursing home and its residents. While typically, short term rentals are subject to Florida’s transient rental tax, such leases are explicitly exempted by Florida statutes. Furthermore, such transactions are specifically exempt from Florida’s sales tax on commercial rent as well.

If you have been erroneously remitting sales tax on commercial rent and transient rental tax for the leases in which your nursing home is engaged, you may be entitled to a refund. However, the window during which you may apply and obtain a refund is limited. It is important to act quickly and correctly to obtain a refund for overpaid taxes before the opportunity has expired.

About the firm: At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against Florida sales and use taxes for more than 25 years with over 100 years of cumulative experience working for our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire State of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.

Florida sales tax audit defense; Florida sales tax audit help; Florida sales tax help; Florida sales tax attorney; Florida sales tax audit; Orlando sales tax attorney; Miami sales tax attorneyAbout the Author: Paula Savchenko is an associate attorney at the Law Offices of Moffa, Sutton, & Donnini, P.A, based in Fort Lauderdale, Florida. Ms. Savchenko joined the firm in 2013 and practices primarily in the areas of State and Local Taxation and Administrative Law matters, as she counsels and represents businesses and individuals in their dealings with government agencies. More specifically, most of her work involves tax and regulatory matters, with an emphasis on state and local taxation. In addition to serving on the board of the Greater Fort Lauderdale Tax Council she also serves on the board of Cannabis Law Accounting and Business, as well as the Florida Bar, Administrative Law Section, South Florida Chapter.


Section 212.03, F.S. Transient Rentals Tax; Rate, Procedure, Enforcement, Exemptions

Rule 12A-1.070, F.A.C. Leases and Licenses of Real Property; Storage of Boats and Aircraft

Beverly Enterprises of Florida, Inc. v. DOR, Fla. 18th Cir. Ct. 1996 (Case No. 94-2259-CA-16-L) (Held that only areas of a nursing home used for commercial purposes are subject to tax on commercial rentals)

TAA 14A-012 – Taxability of Real Property Leases – Nursing Homes


FLORIDA SALES TAX AUDIT DEFENSE, published 2017, by James Sutton, CPA, Esq.

FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, CPA, Esq.

FLORIDA NOTICE OF FINAL ASSESSMENT (NOFA) | FL DEPT. OF REVENUE, published December 2, 2018, by Matthew Parker, Esq.

FLORIDA SALES TAX - VOLUNTARY DISCLOSURE PROGRAM, published April 9, 2018, by Jeanette Moffa, Esq.

NURSING HOME SALES TAX REFUND ON ELECTRICITY, published December 24, 2016, by David Brennan, Esq.

GO TO JAIL FOR NOT PAYING FLORIDA SALES TAX?, published November 3, 2013, by James Sutton, CPA, Esq.