Florida: Real Improvements Are Tax Exempt
- Sales Tax News
- Oct 22, 2013 | Gail Cole
The Department of Revenue has released a Technical Assistance Advisement (TAA) regarding the application of sales tax to custom signs.
When a sign will not be permanently attached to a building, it is considered tangible personal property. As such, it is subject to sales tax, which should be collected at the time of sale. Installation costs are also subject to sales tax.
When a sign or awning will be permanently attached to a building, it is considered a real property improvement rather than tangible personal property. As a real property improvement, it is exempt from sales tax. However, use tax on the cost (including the fabricated cost) should be collected by the seller and remitted to the state.
The TAA delves into specifics: cabinet signs versus channel letters versus digital imaging versus vinyl graphics versus non-illuminated signs. It explains that cabinet signs and channel letters necessarily become part of the real property when installed, while digital imaging, vinyl graphics and non-illuminated signs can go either way.
In addition, the advisement points out that the owner of the permanently attached sign need not be the owner of the building to which it is attached in order for the sale of the sign to be exempt from sales tax.
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