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| Florida Sales and Use Tax on Repair of Tangible Personal Property How Florida sales tax applies to the repair of tangible personal property. In Florida, Tangible Personal Property is defined as: Property that may be seen, weighed, measured, touched, or is in any manner perceptible to the senses. Tangible personal property should not be confused with “real property,” (also called “realty” or “real estate”) which is defined as land, improvements there to, and fixtures. What is Taxable? Parts and Materials When parts are furnished by a repair person, sales tax is due on the entire charge made to the customer for adjusting, applying, installing, maintaining, remodeling, or repairing tangible personal property, unless specifically exempt. A repair person who is registered as a sales and use tax dealer may purchase materials and parts tax-exempt if they are incorporated into and become part of the tangible personal property being repaired (see “How Do I Register to Collect Sales Tax?”). These materials and parts include welding rods, solder, paint, thinner, oil, bolts, nuts, etc. Materials used that do not become a part of the property repaired, such as tools, sandpaper, steel wool, flux, detergents, etc., are taxable to the repair person as overhead items. Repair Labor Only Charges for repairs of tangible personal property requiring only labor or service are taxable, unless the dealer keeps documentation to prove that no tangible personal property was incorporated into or attached to the repaired item. Charges for fabrication are taxable. Fabrication occurs when material is cut, threaded, shaped, bent, welded, sheared, punched, drilled, machined, or is changed in some way from its original state due to work performed on it. Installation of Tangible Personal Property The total amount charged for labor or services when parts are furnished in installing tangible personal property that is sold and does not become a part of realty is taxable, even though such charge may be separately stated. Contractors and manufacturers who furnish and install the following items are considered to be retail dealers and are required to charge sales tax on the full price, including installation and any other charges.
When tangible personal property is shipped into Florida, then repaired and shipped back to its owner outside the state by common carrier or mail, the amount charged for the repair is exempt. If the tangible personal property is sent out of the state to be repaired and then returned to Florida, the transaction is taxable. Maintenance or Service Warranty Contracts Maintenance or service warranty contracts covering taxable, tangible personal property are taxable. A service warranty is defined as any contract or agreement for the cost of maintaining, repairing, or replacing tangible personal property. This does not include contracts or agreements covering tangible personal property that becomes a part of real property. The sale of an extended warranty for the maintenance, repair, or replacement of tangible personal property that is not incorporated into real property is subject to sales tax. | |