Which commercial kitchen-hood and fire-suppression inspection, cleaning, and repair services are taxable in Florida?

Plain-English summary

The Florida Department of Revenue ruled that commercial kitchen-hood exhaust cleaning was not a taxable nonresidential cleaning service because the comparable NAICS code, 561790, was not among Florida's taxable cleaning codes. A hood-only inspection was also not a service specifically taxed by chapter 212.

Repairs and modifications to exhaust hoods were real-property improvements because the hoods were fixtures attached to and expected to remain with the building. The contractor should not collect tax from the customer for that real-property work, but must pay sales or use tax on materials and supplies.

The attached fire-suppression system was also real property. A suppression-system-only inspection was not taxable. But when the technician checked whether the connected fire-alarm panel received a signal, that work became taxable alarm-system maintenance. On mixed taxable and nontaxable invoices, taxable charges had to be separately stated or the entire invoice was taxable.

What this means for you

Commercial kitchen service companies

Separate hood cleaning, hood inspection, real-property repair, suppression-system inspection, and fire-alarm work in both work orders and invoices. The tax result changes with the component actually serviced.

Restaurants and facility managers

A combined visit can contain both taxable and nontaxable work. Ask vendors to identify alarm-panel testing separately from hood or suppression-system work.

Accountants and tax professionals

The ruling distinguishes customer-facing tax from contractor use tax. Real-property contractors do not collect sales tax on the repair contract but remain taxable on materials and supplies they consume.

Common questions

Q: Is commercial exhaust-hood cleaning taxable?
A: Not under this TAA. The Department treated it as comparable to NAICS 561790, which was not a taxable cleaning code.

Q: Are hood repairs taxable to the customer?
A: No. They were real-property improvements, though the contractor owed tax on its materials and supplies.

Q: Is a fire-suppression inspection taxable?
A: A suppression-only inspection was not taxable. Testing whether a connected fire-alarm panel received the signal was taxable alarm maintenance.

Q: What if repair parts are replaced?
A: Suppression-system-only part replacement was real-property work. For an invoice mixing taxable alarm work with nontaxable work, the taxable portion must be separately stated or the entire invoice is taxable.

Citations and references

• Fla. Stat. §§ 212.05(1)(i), 212.06(14), and 213.22
• Fla. Admin. Code rr. 12A-1.0091, 12A-1.0092, and 12A-1.051
• NAICS 561790 and 561621

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 19A-010

Original ruling text

QUESTION(S):

1. IS THE CLEANING OF NONRESIDENTIAL KITCHEN HOOD EXHAUST SYSTEMS SUBJECT TO
   FLORIDA SALES AND USE TAX?
2. IS THE REPAIR OF NONRESIDENTIAL KITCHEN HOOD EXHAUST SYSTEMS SUBJECT TO
   FLORIDA SALES AND USE TAX?
3. WOULD INSPECTION, ONLY, OF NONRESIDENTIAL KITCHEN HOOD EXHAUST SYSTEMS BE
   SUBJECT TO FLORIDA SALES AND USE TAX?
4. IS THE FIRE SUPPRESSION SYSTEM CONSIDERED REAL PROPERTY, TANGIBLE PERSONAL
   PROPERTY, OR A BURGLAR/FIRE ALARM COVERED UNDER RULE 12A-1.0092, F.A.C.?
5. WOULD AN INSPECTION, ONLY, OF A FIRE SUPPRESSION SYSTEM THAT WAS PURELY
   LABOR WITH ABSOLUTELY NO TANGIBLE PERSONAL PROPERTY TRANSFERRED BE
   EXEMPT?
6. IF THERE ARE PARTS REPLACED ON THE FIRE SUPPRESSION SYSTEM, IS THE ENTIRE
   INVOICE TAXABLE, PARTS ONLY TAXABLE, OR NOT TAXABLE AT ALL?
   ANSWER(S):
7. NAICS CODE 561790 IS NOT LISTED AS A TAXABLE CODE UNDER FLORIDA LAW.
   THEREFORE, EXHAUST HOOD CLEANING SERVICES MAY ALSO BE CONSTRUED AS NOT
   BEING SUBJECT TO SALES TAX AS A TAXABLE CLEANING SERVICE.
8. MAINTENANCE, MODIFICATIONS, AND REPAIRS MADE TO EXHAUST HOODS WILL BE
   TREATED AS REAL PROPERTY IMPROVEMENTS, WHICH ARE NOT SUBJECT TO SALES AND
   USE TAX.
9. HOOD INSPECTIONS ALONE DO NOT FALL WITHIN THE TAXABLE SERVICES LISTED IN
   CHAPTER212, F.S.; THEREFORE, CHARGES EXCLUSIVELY FOR HOOD INSPECTIONS ARE
   NOT SUBJECT TO SALES AND USE TAX.
10. FROM THE DESCRIPTION PROVIDED, THE FIRE SUPPRESSION SYSTEM IS ATTACHED TO
    THE WALL, AND THE PIPES RUN IN SUCH A MANNER THAT THE SUPPRESSION SYSTEM
    BECOMES PART OF REAL PROPERTY. THEREFORE, THE FIRE SUPPRESSION SYSTEM IS REAL
    PROPERTY.

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5. WHEN THE TECHNICIAN CHECKS THAT THE ALARM PANEL RECEIVES THE SIGNAL FROM
   THE CONTACTS, IT IS AN INSPECTION OF A COMPONENT PART OF THE ALARM SYSTEM,
   WHICH IS SUBJECT TO SALES TAX UNDER RULE 12A-1.0092(2), F.A.C., AS THE
   MAINTENANCE OF AN ALARM SYSTEM. THEREFORE, THE INSPECTION IS SUBJECT TO
   SALES TAX, WHEN THE TECHNICIAN CHECKS THAT THE ALARM PANEL RECEIVES A SIGNAL
   FROM THE CONTACTS.
6. WHERE TAXPAYER’S INVOICES INVOLVE THE SALE OF BOTH TAXABLE AND NONTAXABLE
   SERVICES, THE CHARGES FOR THE TAXABLE PORTION OF THE TRANSACTION MUST BE
   SEPARATELY STATED FROM THE CHARGES FOR THE NONTAXABLE PORTION, OTHERWISE
   THE ENTIRE INVOICE IS SUBJECT TO SALES TAX. (SEE RULE 12A-1.0092(3)(A), F.A.C.)

April 19, 2019
RE:

Technical Assistance Advisement
Florida Sales and Use Tax
Taxability of Hood Cleaning Services
XXX [“Taxpayer”]
Sections 212.05 and 212.06, Florida Statutes [“F.S.”]
Rules 12A-1.0091, 12A-1.0092, and 12A-1.051, Florida Administrative Code [“F.A.C.”]

Dear XXX,
This letter is in response to your request dated November 14, 2018, for issuance of a Technical
Assistance Advisement [“TAA”] pursuant to Section 213.22, F.S., and Rule Chapter 12-11, F.A.C.,
concerning the taxability of exhaust hood cleaning services and inspecting and repairing kitchen
fire suppression systems. An examination of your request has established you complied with the
statutory and regulatory requirements for issuance of a TAA. Therefore, the Department is
hereby granting your request for a TAA.
FACTS
From Taxpayer’s request for technical assistance the facts are understood to be as follows:
Nonresidential Kitchen Hood Exhaust Inspection, Cleaning, and Repair
Taxpayer is in the business of inspecting, cleaning, and repairing nonresidential kitchen hood
exhaust systems. Technicians clean the kitchen hood exhaust system in accordance with the
National Fire Protection Association [“NFPA”] Standard 96 code. The procedure includes cleaning
the exhaust fan, all related ductwork, filters, and the hood canopy. The hood canopy and
backsplash are wiped down and polished. The floor in the service area is cleaned and any grease

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that may have settled on the roof or parking area is removed. Taxpayer will also make repairs or
modifications to the hood system during a cleaning service, when needed.
Fire Suppression System Inspection and Repair
Taxpayer is also in the business of inspecting and certifying fire suppression systems. The fire
suppression system is designed to provide fire protection for cooking appliances, hoods, and
ductwork in restaurants. The system suppresses fire by spraying the area, filters, cooking
surfaces, and the exhaust ductwork with a liquid fire suppressant. Accessories may be added,
such as alarms and warning lights. The alarms allow remote monitoring of the system. Once the
suppression system is actuated, it sends a signal to the central station monitoring the location,
who will contact the local fire department.
Taxpayer’s inspection and certification includes: (i) visual inspection for signs of tampering or
leakage; (ii) UL-300 Compliance Review; (iii) installation of current fusible links; (iv) clean and degrease nozzles; (v) inspect various working components of the system; (vi) replace activation
cartridges, as necessary; (vii) dry test the system for both, automatic operation and manual
release, control panel, and pull station; and (viii) check for proper inspection of K-class
extinguisher. Should Taxpayer’s inspection of the system determine a need for repair, Taxpayer
performs the repairs.
The fire alarm, fire suppression system, and the hood cleaning itself are all separate systems,
separate inspections, and typically done by separate technicians. Fire alarm system inspection
and repair requires licensure. If a fire alarm system is present, the suppression system is required
by code to be monitored by the fire alarm. If the suppression system is connected to a fire alarm
system, Taxpayer’s technician will test the system and verify receipt of a signal by the fire alarm
system.
REQUESTED ADVISEMENT

1. Is the cleaning of nonresidential kitchen hood exhaust systems subject to Florida Sales
   and Use Tax?
2. Is the repair of nonresidential kitchen hood exhaust systems subject to Florida Sales and
   Use Tax?
3. Would inspection, only, of nonresidential kitchen hood exhaust systems be subject to
   Florida Sales and Use Tax?
4. Is the fire suppression system considered real property, tangible personal property, or a
   burglar/fire alarm covered under Rule 12A-1.0092, F.A.C.?

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5. Would an inspection, only, of a fire suppression system that was purely labor with
   absolutely no tangible personal property transferred be exempt?
6. If there are parts replaced on the fire suppression system, is the entire invoice taxable,
   parts only taxable, or not taxable at all?
   APPLICABLE LAW
   Section 212.05(1)(i), F.S., provides that nonresidential cleaning services are subject to sales tax.
   Nonresidential cleaning services are those services, not involving repair, rendered to maintain
   the clean and sanitary appearance, and operating condition of a nonresidential building. Repairs
   made to real property are addressed in Rule 12A-1.051, F.A.C., and are not covered under
   cleaning services. (See also Rule 12A-1.091(1)(a), F.A.C.)
   Section 212.05, F.S., provide in pertinent part:
   It is hereby declared to be the legislative intent that every person is exercising a taxable
   privilege who . . . furnishes any of the things or services taxable under this chapter . . .
   (1) For the exercise of such privilege, a tax is levied on each taxable transaction or incident,
   which tax is due and payable as follows:

(i)1. At the rate of 6 percent on charges for all:

b. Nonresidential cleaning, excluding cleaning of the interiors of transportation
equipment . . . (NAICS National Number . . . 561720).
2. As used in this paragraph, “NAICS” means those classifications contained in the North
American Industry Classification System1, as published in 2007 by the Office of
Management and Budget, Executive Office of the President. (See also Rule 12A1.0091, F.A.C.)
“Real property” is defined in s. 212.06(14)(a), F.S., and “…. means the land and improvements
thereto and fixtures ….” “Fixtures” is defined as “…. items that are an accessory to a building,
other structure, or land and that do not lose their identity as accessories when installed but that
do become permanently attached to realty ….” (See s. 212.06(14)(b), F.S.) The criteria for
determining whether an item is a fixture is provided for in Rule 12A-1.051(3), F.A.C.
1

The North American Industry Classification System [“NAICS”] is the standard used by federal statistical agencies
to classify business establishments for collecting, analyzing, and publishing statistical data related to the U.S.
business economy.

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“Improvements to real property” is defined as “…. The activities of building, erecting,
constructing, altering, improving, repairing, or maintaining real property.” (See s. 212.06(14)(c),
F.S., and Rule 12A-1.051(2)(d), F.A.C.)
Pursuant to Rule 12A-1.051, F.A.C., real property contractors are the ultimate consumers of
materials and supplies used to perform real property contracts; therefore, they must pay sales
and use tax on their costs of materials and supplies. (See Rule 12A-1.051(4), F.A.C.) The contractor
should not collect sales tax from their customer.
Section 212.05, F.S., provides that detective, burglar protection, and other protective services
classified under NAICS numbers 561511, 561612, 561613, and 561521 are subject to sales tax.
Additionally, Rule A-1.0092(2), F.A.C., provides that burglar, fire alarm, or other security system
devices’ monitoring and maintenance services are taxable. The monitoring or maintenance of
alarm or security systems is taxable, whether such systems are considered to be tangible personal
property, or a part of real property. “Maintenance” includes “…. any inspection of an alarm or
security system to confirm its proper working order.” The rule also states, in pertinent part, that
tax applies to “… services … rendered to minimize or prevent loss or damage to life, limb, or
property and are of a kind typically performed by security or alarm system companies ….”
DISCUSSION AND CONCLUSION

1. Is the cleaning of nonresidential kitchen hood exhaust systems subject to Florida Sales and
   Use Tax?
   Under Florida Law, the imposition of tax on certain services is now based on NAICS codes. The
   use of NAICS codes is the result of the 2009 Legislature’s enactment of Chapter 2009-51, Laws of
   Florida, which became effective on July 1, 2009. This enactment changed the imposition of tax
   from Standard Industrial Classification [“SIC”] codes to NAICS numbers. The use of NAICS
   numbers changed the tax treatment of nonresidential exhaust hood cleaning services.
   Prior to the law change in 2009, “Services to Dwellings and Other Buildings” (SIC Code 734) was
   considered to contain services taxable under Chapter 212, F.S. Specifically, s. 212.05(1)(i)2., F.S.,
   previously stated that it was the intention of the Legislature to tax services of a type listed in SIC
   Industry Group 734. Chimney cleaning services were included within SIC code 734.
   In January 2011, Rule 12A-.0091(1)(a), F.A.C., was revised; however, prior to its revision, it
   provided that chimney cleaning services were subject to sales and use tax as nonresidential
   cleaning services. There was no mention of hood cleaning services, nor was there a specific
   classification code. Based on prior Department rulings and its research of SIC codes, hood
   cleaning services were considered similar to chimney cleaning services. Therefore, it was
   determined that hood cleaning services were subject to sales and use tax under s. 212.05(1)(i)2.,
   F.S.

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Under rule promulgation, “chimney cleaning services” was removed from the list of taxable
services within the rule. With revision of the rule, the Department reviewed NAICS codes and did
not find a specific classification for hood cleaning. However, the Department found NAICS code
561790, which includes “duct cleaning services,” as well as “ventilation duct cleanings services,”
which are categorized as “Other Services to Buildings and Dwellings.” It has been determined
these services are akin to hood cleaning services.
NAICS code 561790 is not listed as a taxable code under Florida law. Therefore, exhaust hood
cleaning services may also be construed as not being subject to sales tax as a taxable cleaning
service.

2. Is the repair of nonresidential kitchen hood exhaust systems subject to Florida Sales and
   Use Tax?
   Exhaust hoods are physically attached to the building and, by definition, are considered real
   property as “fixtures.” (See Rule 12A-1.051(2)(c)3., F.A.C.) Exhaust hoods are a necessary part of
   the building for its use in a commercial kitchen and, as such, they are expected to remain with
   the building, indefinitely. Therefore, exhaust hoods qualify as a “fixture” pursuant to s.
   212.06(14)(b), F.S. Maintenance, modifications, and repairs made to exhaust hoods will be
   treated as a real property improvements, which are not subject to sales and use tax. As the
   ultimate consumer, Taxpayer should pay sales tax, or accrue and remit use tax, on its purchases
   of materials and supplies for use in such contracts.
3. Would inspection, only, of nonresidential kitchen hood exhaust systems be subject to
   Florida Sales and Use Tax?
   Under Florida law, service transactions that do not involve the sale of tangible personal property
   are not subject to sales and use tax, unless specifically authorized under Chapter 212, F.S. Based
   on the description provided by Taxpayer, hood inspections alone do not fall within the taxable
   services listed in Chapter212, F.S.; therefore, charges exclusively for hood inspections are not
   subject to sales and use tax.
4. Is the fire suppression system considered real property, tangible personal property, or a
   burglar/fire alarm covered under Rule 12A-1.0092, F.A.C.?
   As discussed, the monitoring or maintenance of alarm systems is a taxable service, whether such
   systems are considered tangible personal property or a part of real property. The fire suppression
   system is designed to minimize loss of life, limb, or property; however, it is not the type of service
   typically rendered by a security or alarm service. Instead, fire suppression systems are similar to
   a sprinkler system. From the description provided, the fire suppression system is attached to the

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wall, and the pipes run in such a manner that the suppression system becomes part of real
property. Therefore, the fire suppression system is real property.

5. Would an inspection, only, of a fire suppression system that was purely labor with
   absolutely no tangible personal property transferred be exempt?
   As stated in item 4, above, the fire suppression system is not an alarm system under Rule 12A1.0092(2), F.A.C., and is, instead, part of real property. Therefore, the inspection of the fire
   suppression system, alone, is not subject to sales tax.
   However, as noted in the facts, when a fire alarm system is present the fire suppression system
   must be connected. The technician will check that the alarm panel receives a signal from dry
   contacts. The inspection and/or repair of a fire alarm system, including components of the
   sprinkler system, and any other part of the fire alarm system would be included under NAICS
   code 561621 – Security Systems Services (except Locksmiths). This includes the inspection or
   repair of any part of the fire alarm system. When the Technician checks that the alarm panel
   receives the signal from the contacts, it is an inspection of a component part of the alarm system,
   which is subject to sales tax under Rule 12A-1.0092(2), F.A.C., as the maintenance of an alarm
   system. Therefore, the inspection is subject to sales tax, when the technician checks that the
   alarm panel receives a signal from the contacts.
6. If there are parts replaced on the fire suppression system, is the entire invoice taxable, parts
   only taxable, or not taxable at all?
   As stated, above, the fire suppression system qualifies as a fixture and, therefore, is real property.
   Replacement of parts for the suppression system, alone, is the repair and maintenance of real
   property. Therefore, a transaction exclusively for the replacing of parts of a fire suppression
   system would be a real property contract, and Taxpayer should not collect sales tax. Rather,
   Taxpayer is required to pay sales tax, or accrue and remit use tax, on the cost of the parts,
   materials, and supplies used.
   However, where Taxpayer’s invoices involve the sale of both taxable and nontaxable services,
   the charges for the taxable portion of the transaction must be separately stated from the charges
   for the nontaxable portion, otherwise the entire invoice is subject to sales tax. (See Rule 12A1.0092(3)(a), F.A.C.)

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This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is
binding on the Department only under the facts and circumstances described in the request for
this advice, as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific
situation summarized above. You are advised that subsequent statutory or administrative rule
changes or judicial interpretations of the statutes or rules upon which this advice is based may
subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request, and related backup documents are
public records under Chapter 119, F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In
an effort to protect confidentiality, we request you provide the undersigned with an edited copy
of your request for Technical Assistance Advisement, the backup material, and this response,
deleting names, addresses, and any other details which might lead to identification of the
Taxpayer. Your response should be received by the Department within 15 days of the date of this
letter.
Cordially,

Barbara Ann Bohannan
Barbara Ann Bohannan
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850)717-6745
RECORD ID: 134290
CC:

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