Who owed Florida sales tax when a contractor's subcontractor supplied and installed shutters under TAA 25A-012?

Plain-English summary

The shutter transaction was a real property improvement. The taxpayer, as contractor, was liable for sales tax on the shutters it purchased for the job, and its suppliers should collect and remit that tax.

The contractor should not charge its customer sales tax on either the shutters or the installation. The wholesaler/subcontractor providing installation under the contractor's contract also should not charge the contractor sales tax on the installation service.

What this means for you

The tax fell on the contractor's material purchases rather than on the contractor's charges to the real-property customer or the subcontractor's installation charge to the contractor.

Common questions

Who paid tax on the shutters? The contractor paid sales tax on its purchases.

Should the contractor charge the customer sales tax? No, not on the shutters or installation under the described real-property-improvement contract.

Should the subcontractor tax its installation service to the contractor? No.

Citations and references

• Fla. Stat. §§ 212.02, 212.05, and 212.06 and Fla. Admin. Code r. 12A-1.051, as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 25A-012

Original ruling text

Florida Department of Revenue
Office of Technical Assistance

5050 West Tennessee Street Tallahassee FL 32399

Jim Zingale
Executive Director

floridarevenue.com

QUESTION: Whether Taxpayer is liable for sales or use tax on the shutters or installation,
given that the wholesaler/subcontractor was responsible for furnishing and installing the
materials as part of a real property improvement.
ANSWER: Based on the facts provided, Taxpayer, as the contractor, is liable for paying sales
tax on the materials (shutters) or installation because the transaction constitutes a real
property improvement.
is acting as a subcontractor and providing installation services under the contract
with Taxpayer; therefore,
is not responsible for charging sales tax on the installation
service to Taxpayer.
November 17, 2025

Via email:

Re:

Technical Assistance Advisement – TAA #: 25A-012

• (“Taxpayer”)
  Sales and Use Tax – Real Property Improvement
  Sections 212.02, 212.05, 212.06, Florida Statutes - (“F.S.”)
  Rule 12A-1.051 Florida Administrative Code - (“F.A.C.”)
  BP #:
  FEI#:

Dear
This is in response to your letter dated
, requesting this Department’s
issuance of a Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S.,

Technical Assistance Advisement
November 17, 2025
Page 2

and Rule Chapter 12-11 F.A.C, Florida Administrative Code, regarding the matter discussed
below. Your request has been carefully examined, and the Department finds it to be in
compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to
your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S.
REQUESTED ADVISEMENT
Whether Taxpayer is not liable for sales or use tax on the shutters or installation, given that
the wholesaler/subcontractor was responsible for furnishing and installing the materials as
part of a real property improvement.
For the purpose of this advisement, the Department restates the question asked as:
Whether Taxpayer is liable for sales or use tax on the shutters or installation, given
that the wholesaler/subcontractor was responsible for furnishing and installing the
materials as part of a real property improvement.
FACTS
•
•
•
•

•
•

•

Taxpayer is a
business featuring
products located at
.
Taxpayer regularly purchases shutters from a wholesaler,
, which also
performs the installation for Taxpayer’s customers.
In these cases, the wholesaler supplies and installs the shutters directly; Taxpayer
does not take possession of the materials or perform any installation.
Taxpayer pays the wholesaler for the full cost of the materials and installation and
then invoices their customer,
, sometimes as a lump sum and
sometimes by separately itemizing the materials and installation charges.
Regardless of the invoicing method, Taxpayer does not take title to the shutters, nor
do they install the materials in these cases.
The wholesaler is paying use tax on these transactions, resulting in the State of
Florida potentially receiving tax twice—once from the wholesaler and once from
Taxpayer’s client.
Separately, Taxpayer also performs installations themselves in certain transactions.
In these cases, they properly pay sales or use tax on the materials as required by
Florida law and will continue to do so.

You provided documents that illustrate a typical shutter sale and installation
transaction involving
Taxpayer,
Taxpayer’s
customer
,
and
Taxpayer’s vendor/subcontractor
.
LAW AND DISCUSSION

Technical Assistance Advisement
November 17, 2025
Page 3

Section 212.05, F.S. provides that anyone involved in the business of selling tangible
personal property1 at retail is engaged in a taxable privilege, and tax is due on each taxable
transaction or incident. The tax is calculated on the "sales price"2 of the item(s) sold. In order
to determine whether the tax rules relating to tangible personal property or those relating to
real property3 apply to the instant case, it is necessary to determine whether the installation
of the property at issue, namely the shutter, is considered a fixture or retains the
characteristics of tangible personal property.
Section 212.06(14), F.S., provides guidance in determining whether a person is making
improvements to real property by providing the following relevant definitions, which states
in part:
(b) “Fixtures” means 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.
(c) “Improvements to real property” includes the activities of building, erecting,
constructing, altering, improving, repairing, or maintaining real property.
Rule 12A-1.051(2)(c)3., F.A.C. provides the following relevant factors that determine
whether a particular item is a fixture: “a) The method of attachment. Items that are screwed
or bolted in place are likely to be classified as fixtures; b) Intent of the property holder in
having the item attached. If the property holder intends that the item will remain in place for
an extended or indefinite period of time, that item is more likely to be a fixture …. d)
Customization. If items are custom designed or custom assembled to be attached in a
particular space, they are more likely to be classified as fixtures….”
Under lump sum contracts4, the contractor is the final consumer of materials and supplies
and must pay sales tax to suppliers on all purchases, including those made for the
contractor’s own use. The contractor should not charge tax to the customer, regardless of
whether or not they itemize charges for materials or labor. See Rule 12A-1.051(4), F.A.C.

Tangible personal property means and includes personal property which may be seen, weighed, measured,
or touched or is in any manner perceptible to the senses. See s. 212.02(19), F.S.
2
Sales price means the total amount paid for tangible personal property, including any services that are a part
of the sale.... See s. 212.02(16), F.S.
3
Real property means the surface land, improvements thereto, and fixtures, and is synonymous with “realty”
and “real estate.” See s. 212.02(10)(h), F.S.
4
Lump sum contracts are “contracts in which a contractor or subcontractor agrees to furnish materials and
supplies and necessary services for a single stated lump sum price.” See Rule 12A-1.051(3)(a), F.A.C. It is
noted that Taxpayer sometimes invoices its customer by separately itemizing materials and the installation
charges. However, the documentation provided indicates that the contract does not meet the exacting
requirements to be a “retail sale plus installation contract” pursuant to Rule 12A-1.051(3)(d), F.A.C.
1

Technical Assistance Advisement
November 17, 2025
Page 4

Based on the discussion above, Taxpayer’s purchases are for real property improvements
as provided by Rule 12A-1.051(4), F.A.C. Taxpayer is liable for the tax on its purchases of
shutters. Taxpayer’s suppliers should be collecting and remitting sales tax on Taxpayer’s
purchases of shutters used to complete the real property improvement contracts.
CONCLUSION
Pursuant to the information provided, Taxpayer, as the contractor, is liable for paying sales
tax on the shutters purchased from
. Taxpayer should not charge sales tax to their
customer
on the materials (shutters) or installation because the transaction is
considered a real property improvement.
is acting as a subcontractor and providing installation services under the contract
with Taxpayer; accordingly,
is not responsible for charging sales tax on the
installation service to Taxpayer.
This response constitutes a TAA 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 TAA, 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 ten (10) days of the date of this
letter.
If you have any further questions with regard to this matter and wish to discuss them, you
may contact me directly at (850)717-6839.
Sincerely,

Xiaoxi Miao
Xiaoxi Miao
Tax Law Specialist
Office of Technical Assistance

Technical Assistance Advisement
November 17, 2025
Page 5

cc:

Record ID: 7001417091

Technical Assistance Advisement
November 17, 2025
Page 6

Office of Technical Assistance Satisfaction Survey
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Notification number:

7001417091

Respondent code:

44

Tax type:

Sales and Use Tax

Correspondence type: Technical Assistance
If you need technical assistance accessing the survey, please email Douglas Charity at
[email protected].
Thank you.