STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JULIA RICE, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1070

) OFFICE OF THE COMPTROLLER, STATE ) OF FLORIDA, DIVISION OF FINANCE ) OF THE DEPARTMENT OF BANKING AND ) FINANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

The final hearing was conducted in this case by the undersigned Hearing Officer on November 8, 1978, in Miami, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Jack R. Rice, Jr.

Miami, Florida

For Respondent: Julia Rice and

Joseph C. Mellichamp III Office of the Comptroller Tallahassee, Florida

The Petitioner is seeking a refund of sales taxes that she has paid to the State of Florida pursuant to Florida Statutes, 212.031, in connection with a rental transaction. The refund application was filed with the Respondent on February 14, 1978, and covers the period from March 1, 1972 through May 30, 1978. The Respondent initially denied the application, and the Petitioner requested an administrative hearing. On or about June 19, 1978 the Respondent forwarded the matter to the office of the Division of Administrative Hearings for the assignment of a Hearing Officer and the scheduling of a hearing. After being twice continued upon requests from the parties, the hearing was conducted on November 8, 1978.

The parties entered into a stipulation of facts which was introduced into evidence at the final hearing as Joint Exhibit 1. In addition, the Petitioner testified as a witness on her own behalf, and introduced Petitioner's Exhibits 1 and 2. Official recognition has been taken of the provisions of Chapter 12A-I, Florida Administrative Code. The parties have submitted Post-Hearing Legal Memoranda.

FINDINGS OF FACT

1. The Petitioner owns property in Dade County, Florida, located at 47 Northwest 32nd Place, Miami, Florida. Improvements have been erected on the property. The Petitioner leases the property and improvements to Flordean Nursing Home, Inc., a Florida corporation. The corporation operates a skilled nursing home on the premises, and pays a monthly rent of five hundred dollars to the Petitioner for the exclusive occupation of the property and improvements. The Petitioner is the president and majority stockholder of the corporation, and the administrator of the nursing home. The nursing home is licensed by the Florida Department of Health and Rehabilitative Services.

   
   

2. The corporation provides extended care treatment and skilled nursing home services to its clients or patients. The clients pay a single charge for the services which include a room, nursing care, laundry, meals, activities, and medical attentions. Activities include movies, religious services, birthday and other holiday celebrations, and similar functions. The corporation does not and has never simply rented a room to any client. The nursing home is a commercial venture for profit, and it in fact makes a profit.

   
   

3. The average age of the nursing home guests is 84. Typically they are admitted through physicians. They become permanent residents. They receive their mail at the home and typically do not leave until they die. The average stay is three years, five months. At the time of hearing the nursing home housed 52 guests in 19 rooms. The rooms are private, semiprivate and three in a room.

   
   

4. The petitioner applied for a certificate of registration from the Florida Department of Revenue in June, 1968. The certificate was issued under sales tax number 23-08-102316-82. The Petitioner has paid sales taxes on the monthly rental payments that she has received from the corporation. She is seeking a refund of these taxes for the period from March 1, 1972 through and including May 30, 1978. The corporation does not collect sales taxes from the nursing home guests.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the parties to this proceeding and over the subject matter. Section 120.57(1), Florida Statutes (1978 supp.)

   
   

6. Section 215.26(2), Florida Statutes (1977) provides that applications for tax refunds must be filed with the Office of the Comptroller within three years after the right to such refund shall have accrued. Petitioner's application for refund was filed in February, 1978. Therefore, to the extent that the Petitioner is entitled to any refund, she is entitled only to a refund dating back to February, 1975, and not until March 1, 1972 as claimed.

   
   

7. The Petitioner is seeking a refund of taxes which had been paid in accordance with the provisions of Section 212.031, Florida Statutes. Petitioner contends that rental payments made by the corporation to her are exempt from the tax under the provisions of Section 212.08(7)(d), Florida Statutes. The section provides:

   
   

   Also exempt from payment of the tax imposed by this chapter on rentals ad 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, infirmed, mentally or physically incapacitated or otherwise dependent on special care or attention.

   
   

   Under this section, guests or clients of the nursing home are clearly exempted from the obligation to pay sales taxes on the sale or rental of tangible personal property which is included in payments that they make to the nursing home. Since the guests are permanent residents, they are furthermore, not subject to the taxes imposed under sections 212.03 and 212.031. See: Op. Att'y Gen.Fla. 073-352 (1973)

   
   

8. Petitioner contends that since the clients or guests at the nursing home are not required to pay sales taxes, that the corporation is likewise not required to pay sales taxes for rental payments made to the Petitioner. No statutes or cases have been cited in support of this proposition. The Petitioner, in her capacity as owner of the property, is engaged in the business of renting real property to the corporation. The fact that clients of the corporation are exempt from paying sales taxes to the corporation has no bearing upon the corporation's obligation to pay sales taxes for the lease of the property.

   
   

9. Petitioner's refund application should be denied.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby,

RECOMMENDED:

That the Respondent enter a final order denying the petitioner's refund application.

DONE and ORDERED this 9th day of January, 1979, in Tallahassee, Florida.

G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Joseph C. Mellichamp, III, Assistant Attorney General The Capitol, Rm. LL04 Tallahassee, Florida 32304

Jack R. Rice, Jr., Esquire P. O. Box 350838

2424 N. W. First Street Miami, Florida 33135

Docket for Case No: 78-001070

Orders for Case No: 78-001070