This research is motivated by a change in Florida that affected assisted living facilities (ALFs) by removing the property tax exemptions for those operated by nonprofit organizations. As such, this paper addresses two research questions: (1) Are there systematic differences between Florida’s for‐profit and nonprofit‐designated ALFs in terms of operations and service provision? (2) What was the impact, if any, of losing and regaining their property tax exemptions on the operations of Florida’s nonprofit ALFs? We use data from the Florida Agency for Health Care Administration to conduct difference of means testing for‐profit versus nonprofit ALFs, as well as annual financial data of each ALF property owners’ IRS Form 990 from the National Center for Charitable Statistics Core Files and parcel‐level property data from the state of Florida to conduct regression analysis using three different dependent variables measuring various components of nonprofit ALF operations. We find that nonprofit ALFs have greater legitimacy in service delivery than for‐profits, as nonprofit ALFs have higher service capacity, quality, and variety than for‐profit ALFs in Florida. In addition, property tax exemptions for nonprofit ALFs in Florida decrease total expenses and increase officer compensation.