Were charges for fumigating cargo containers and their contents subject to Florida's tax on nonresidential pest-control services?

Plain-English summary

The charge for fumigating cargo containers and their contents was not subject to Florida sales tax. The taxable nonresidential pest-control category applied to services eliminating infestations in nonresidential buildings and excluded services provided to tangible personal property.

The transport containers and the goods inside them were tangible personal property, not buildings. The provider was still the consumer of its fumigation and pest-control supplies and owed sales or use tax when acquiring them.

What this means for you

Where the pest treatment is applied matters. The same service can be taxable when performed on a commercial building but nontaxable to the customer when performed on movable goods or transport equipment.

Common questions

Q: Was cargo-container fumigation taxable to the customer? No.

Q: Did the same answer cover the goods inside? Yes.

Q: Who paid tax on chemicals and supplies? The pest-control provider.

Citations and references

• Fla. Stat. § 212.05(1)(a), (j)1.b. — retail sales and nonresidential pest-control services
• Fla. Admin. Code r. 12A-1.009(1), (9) — pest control for buildings and provider supplies
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01A-067

Original ruling text

SUMMARY

QUESTION: Are pest control services for cargo containers
and their contents subject to Florida sales tax?

ANSWER - Based on Facts Below: Cargo containers and their
contents are considered tangible personal property, so the
pest control services would not be subject to Florida sales
tax.

Nov 05, 2001

Re: Technical Assistance Advisement 01A-067
XXX ("Taxpayer")
Sales and Use Tax - Pest Control Services
Section 212.05(1)(a) and (j)1.b., F.S.
Rule 12A-1.009(1)(a), F.A.C.

Dear :

This is in response to your letter to the Florida Department of
Revenue dated August 16, 2001. You have asked for a technical
assistance advisement indicating that pest control services
rendered in transport containers are not subject to sales tax.

Facts

You state that XXX., (hereafter "Taxpayer") is in the business
of fumigating and treating cargo containers and their contents
for pest infestation. These treatments occur in a warehouse in
the XXX of XXX in XXX, while the items are in transit to their
final destinations. The cargo containers and their contents are
both imported into, and exported out of, Florida by common
carrier in ocean going vehicles. You state further that, to
date, the Taxpayer treated the inside of a container and the
produce (yams) contained within for a disclosed customer for a
fee of $300.00. Sales tax in the amount of $18.00 was collected
on this transaction.

You refer to an earlier Letter of Technical Advice that
concluded that such pest control service was not taxable based
on the following law. In that letter you state that Section
212.05(1)(j)1.b., F.S. is quoted as follows:

(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:

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

b. Nonresidential cleaning and nonresidential pest control
services (SIC Industry Group Number 734).

You quote Rule [12]A-1.009(1), F.A.C., as follows:

(a)On or after September 1, 1992, nonresidential pest
control services are subject to tax. Nonresidential pest
control services are those services (not involving repair)
rendered to minimize or eliminate any infestation of
nonresidential buildings by vermin, insects, and other
pests, and include but are not limited to, the following
services which are subject to the State's sales and use
tax:

1. Bird proofing;
2. Exterminating services;
3. Fumigating services;
4. Termite control.

(b)1. Pest control services rendered to residential
buildings are not taxable. For the purposes of this rule,
residential buildings are buildings that are used as homes
or regular places of abode for persons (such as detached or
single family dwellings, apartments, duplexes, triplexes,
condominiums, cooperatives, nursing homes, and common areas
of those residential apartments, duplexes, triplexes,
condominiums, cooperatives, or other similar facilities)
which do not regularly cater to the traveling public.... []

You state that Section 212.05(1)(j)1., F.S., and Rule 12A1.009(1)(a), F.A.C., provide specifically that only the service
of providing nonresidential pest control services is subject to
tax at the rate of six percent on the total charges made for the
services. The above stated SIC Industry Group Number 734 is
specifically for services to dwellings and other buildings. You
state further that since the cargo containers and their contents
would be considered tangible personal property, the individual
writing the letter to which you refer came to the conclusion
that the pest control services would not be subject to Florida
sales tax.

Requested Advisement

You are requesting advisement that cargo containers and their
contents would be considered tangible personal property, so the
pest control services would not be subject to Florida sales tax.

Law, Discussion, Analysis and Conclusion

Section 212.05(1)(j)1.b., F.S. provides that nonresidential
cleaning and nonresidential pest control services (SIC Industry
Group Number 734) are taxable. Rule 12A-1.009, F.A.C., has been
amended from the text quoted in your letter. The current Rule
12A-1.009, F.A.C., interprets the statute and provides where
relevant:

(1)(a) Nonresidential pest control services are subject to
tax. Nonresidential pest control services are those
services (not involving repair) rendered to minimize or
eliminate any infestation of nonresidential buildings by
vermin, insects, and other pests that do not include
services provided for tangible personal property, and
include such services as:

1. Bird proofing;
2. Exterminating services;
3. Fumigating services;
4. Pest control in structures; and
5. Termite control.

(b) Residential pest control services are not taxable.
Charges for pest control services provided at residential
facilities used as living accommodations for persons, such
as detached or single family dwellings, apartments,
duplexes, triplexes, quadraplexes, residential
condominiums, residential cooperatives, residential timeshare units, beach cottages, nursing homes, and mobile home
parks, and the common areas of those residential
facilities, are not subject to tax. Residential facilities
include multiple unit structures where each unit or
accommodation is intended for use as a private temporary or
permanent residence, but do not include a facility that is
intended for commercial or industrial purposes. Charges
for pest control services provided at residential
facilities that provide temporary or permanent residences
are not subject to tax, even though the rental, lease,
letting, or licensing of such living accommodations may be
subject to the tax imposed under s. 212.03, F.S.
...
(8) Aircraft, boats, motor vehicles and other vehicles are
not considered to be nonresidential buildings. Therefore,
the charge for pest control services provided to such
vehicles is not taxable.

(9) Pest control service providers are considered the
ultimate users or consumers of the tangible personal
property sold to them and used in connection with their
service and are required to pay the tax imposed upon such
sales of tangible personal property to their dealers.

Under the law set forth above, the charge for pest control in
cargo containers is not taxable to the customer. However, the
pest control provider pays sales or use tax on its pest control
supplies, because there is no resale involved. The pest control
provider is the ultimate consumer of those supplies.

Advisement

Cargo containers and their contents are considered tangible
personal property, so the pest control services would not be
subject to Florida sales tax.

This response constitutes a Technical Assistance Advisement
under section 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 Section 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 Section 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 Company. Your response should be received
by the Department within 15 days of the date of this letter.

Sincerely,

Karen Kugell
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 922-4834

KK/
Control #: 46549