Florida: Exempt and Taxable Services
- Sales Tax News
- Oct 16, 2014 | Gail Cole
Certain services are subject to sales tax in Florida, and certain services are exempt.
The service of cleaning nonresidential buildings, a category that includes public lodging establishments as defined by the North American Industry Classification System, is generally subject to sales tax. Examples of such services include but are not limited to:
- Acoustical tile cleaning
- Deodorant servicing of restrooms
- Floor waxing
- Janitorial services
- Maid services
- Office cleaning
- Venetian blind cleaning
- Window cleaning (both interior and exterior)
Exempt cleaning services include:
- Carpet cleaning
- Pressure cleaning the exterior of a building
- Residential and transient rental cleaning services (Warning! Charges for cleaning services that must be paid by the guest for the right to use the transient rental are subject to sales and local option transient rental taxes.)
- Sales to nonprofit organizations that hold a current Florida Consumer’s Certificate of Exemption (Form DR-14)
- Sales of services for resale
These lists seem straightforward, but questions always arise. Recently, for example, a Florida business owner wondered if nonresidential hood cleaning services are subject to tax or exempt. When necessary, the business “will also make repairs or modifications to the hood system during a cleaning service.”
In response, the Florida Department of Revenue issued a Technical Assistance Advisement (TAA 14A-020) explaining that the charge for hood cleaning services is not subject to sales tax because hood cleaning services are akin to duct cleaning services, which are exempt. The TAA reminds that services involving repair, maintenance and modification of real property are exempt under Florida law. “Therefore, any repairs made to the hood during cleaning will be treated as real property improvement.” Ergo, exempt.
The service provider is, however, considered a real property contractor and is “required to pay sales and use tax on its purchases of materials, supplies, parts, and any other taxable items used in the repair. The contractor should not charge the customer sales tax.”
Protection services are subject to Florida sales tax. Examples include but are not limited to:
- Armored car service
- Bodyguard services (personal protection)
- Burglar alarm monitoring and maintenance
- Detective agency services
- Fingerprinting services
- Guard, patrol, and parking or other facility services
- Lie detection or polygraph services
- Passenger screening services
All expenses necessary for the performance of the service are included in the amount of taxable sales. For example, if a private detective rents a hotel room during the course of business and includes the hotel charge on the customer invoice, sales tax applies.
It seems like there is always an exception to the rule, or rather an exemption from the tax. The following are examples of protection serves that are exempt from Florida sales tax:
- Investigative services performed within Florida but used outside of Florida by the purchaser.
- Investigative services performed within Florida when the purchaser’s primary benefit of the services is outside Florida.
- Investigative or security services provided directly to an exempt government entity, if payment is made directly by the government entity.
- Sales of services to nonprofit organizations holding a current Florida Consumer’s Certificate of exemption (must be kept on file).
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