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Florida: Real Improvements Are Tax Exempt

  • Oct 22, 2013 | Gail Cole

 Is this sign subject to sales or use tax in Florida?

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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photo credit: “Caveman Chuck” Coker via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.