Was a semi-permanently installed mooring ball a real-property improvement or taxable tangible personal property?

Plain-English summary

A marine contractor installed a mooring system in about 20 feet of water using underwater components, customer-provided chain, a mooring ball, and shackles. The installation was described as semi-permanent, and the mooring was surrounded by water rather than connected to dry land.

Florida classified the mooring ball as tangible personal property, not a real-property improvement. A fixture had to be permanently attached to realty, and the stated installation did not meet that requirement.

The entire sale and installation was taxable. Florida's sales-price rule included labor and services that were part of installing tangible personal property, even when separately stated.

What this means for you

Marine equipment does not become real property merely because it is installed underwater or intended to remain for some time. The permanence and connection to realty controlled the classification here.

Common questions

Was the mooring ball a real-property fixture? No. The installation was semi-permanent rather than permanent.

Was the equipment sale taxable? Yes, as a sale of tangible personal property.

Was separately stated installation labor taxable? Yes. The ruling included installation labor and services in the taxable sales price.

Did similarity to a dock change the answer? No. Florida focused on the lack of permanent attachment and the fact that the mooring was not connected to dry land.

Citations and references

• Fla. Stat. § 212.06(14) (fixtures and real property)
• Fla. Stat. §§ 212.05, 212.02(16) (taxable sale and sales price)
• Fla. Admin. Code r. 12A-1.016(3) (installation labor for tangible personal property)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 06A-034

Original ruling text

SUMMARY
QUESTION: Is the semi-permanent installation of a mooring ball properly classed as an improvement to real property
or as a sale of tangible personal property?
ANSWER - Based on Facts Below: The installation of the mooring ball is described as semi-permanent, rather than
permanent. As such, the mooring ball cannot be classified as an improvement to real property. The sale and
installation of the mooring ball is subject to tax as a sale of tangible personal property.

October 31, 2006

Re: Technical Assistance Advisement 06A-034
Sales and Use Tax - Semi-Permanent Mooring Installation
Sections: 212.02, 212.05, 212.06, F.S.
Rules: 12A-1.016, F.A.C.
Petitioner: XXX (herein "Taxpayer")
FEI: XX
Dear :
This letter is a response to your petition dated June 12, 2006, for the Department’s issuance of a Technical
Assistance Advisement ("TAA") concerning the above referenced party and matter. Your petition has been carefully
examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, Florida
Administrative Code. This response to your request constitutes a TAA and is issued to you under the authority of s.
213.22, Florida Statutes.
FACTS
Taxpayer's correspondence sets forth the following information:
[Taxpayer] was contacted by [Customer] to install a semi-permanent xxx in [Florida]. The xxx consisted of xxx sunk
into about 20' of water outside the harbor channel. The xxx were then connected with chain which [Customer]
provided to [Taxpayer] for the installation. [Taxpayer] provided the mooring ball rated for the weight of the chain and
some additional shackles required for the mooring system. [Taxpayer's] invoice amount totaled $xx Of this, $xx was
for labor, $xx for equipment rentals, $xx for xxx ball and shackles and $xx for sales tax on the total invoice including
labor for installation....
[Customer] questioned the sales tax on the invoice.... [Customer] believed that sales tax should not have been
charged because [Taxpayer was] installing something similar to a dock (an improvement to real property).... The
mooring ball is not connected to or a continuation of a dry piece of land. It is surrounded by water....

REQUESTED ADVISEMENT
Advice is requested whether the xxx is properly classed as an improvement to real property or as a sale of tangible
personal property.
LAW AND DISCUSSION
Section 212.06(14), Florida Statutes, defines the following relevant term, "fixtures" in pertinent part, for use in
determining whether a person is making improvements to real property:
"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.... (Emphasis Supplied)
Taxpayer's correspondence describes the xxx as semi-permanently installed. In order for the mooring ball to be
classed as an improvement to real property, it would need to be permanently installed. Therefore, xxx is properly
classed as tangible personal property.
Section 212.05, Florida Statutes, generally imposes tax on the sale of tangible personal property. Tax is calculated on
the "sales price," which term is defined is section 212.02(16), Florida Statutes, to mean, in pertinent part, "the total
amount paid for tangible personal property, including any services that are a part of the sale."
Rule 12A-1.016(3), Florida Administrative Code, states that the total consideration received for labor or services used
in installing tangible personal property is subject to tax, even though the installation charge may be separately stated.
CONCLUSION
The installation of the xxx is described as semi-permanent, rather than permanent. As such, the xxx cannot be
classified as an improvement to real property. The sale and installation of the xxx is subject to tax as a sale of tangible
personal property.
This response constitutes a Technical Assistance Advisement under Section 213.22, Florida Statutes, 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, Florida Statutes. Our response is predicated upon 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 from that which is expressed in this response.
You are further advised that this response, your request and related backup documents are public records under
Chapter 119, Florida Statutes, and are subject to disclosure to the public under the conditions of s. 213.22, Florida
Statutes. 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.
Sincerely,
Sara D. Faulkenberry
Senior Tax Specialist
Technical Assistance and Dispute Resolution
Control #24979