Did a contractor have to charge Florida sales tax for cleaning and repairing permanently installed concrete fountain pools?

Plain-English summary

The taxpayer cleaned and repaired indoor and outdoor concrete fountain pools at an automobile dealership. The work included chemicals, skimming, cleaning pool surfaces, and repairing attached motors, filters, spouts, and related parts.

Florida classified the fountains as real property. Repairing them was therefore real-property contracting, and the contractor was the ultimate consumer of materials and supplies used in the work.

The cleaning charge was also not taxable. Pool cleaning, including these concrete fountain pools, did not fall within the specifically taxed nonresidential janitorial-services classification. The contractor should pay sales tax on its inputs and should not charge the dealership sales tax for the cleaning or repairs. A chemical-supply contract without cleaning or maintenance could be taxable instead.

What this means for you

The classification of the property and the scope of the contract both matter. Permanent attachment supported real-property treatment, while a stand-alone sale of chemicals would not receive the same result.

Common questions

Were the fountain-cleaning charges taxable? No, under the stated combined service facts.

Were the repair charges taxable to the customer? No. The contractor owed tax on its materials as the ultimate consumer.

What transaction did the ruling flag as taxable? A contract that only supplied pool chemicals or chemical feeders for a stated term and price.

Citations and references

• Fla. Stat. §§ 212.05(1)(i)1.a. and 212.06(14) and Fla. Admin. Code rr. 12A-1.0091 and 12A-1.051, as listed or discussed in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 11A-007

Original ruling text

SUMMARY
QUESTION: Is the cleaning service provider and/or repairman required to collect sales tax on the
cleaning services and/or repairs made to concrete outdoor and indoor water fountain pools.
ANSWER: Based on s. 212.05(1)(i), F.S., pool cleaning, which would include cleaning an outdoor
or indoor concrete water fountain pool, is not subject to sales tax, because this service would not be
included within the specific NAICS National Number that lists taxable nonresidential cleaning
services. The contractor is making a repair to real property, and as such, is deemed to be the
ultimate consumer of the materials and supplies used in the performance of such a contract.
Accordingly, the taxpayer should be paying sales tax on its purchases of materials and supplies, and
the taxpayer should not charge the dealer sales tax on the cleaning or the repair of its fountains.
April 14, 2011
XXX
Re:

Technical Assistance Advisement 11A-007
Sales and Use Tax
XXX (Taxpayer)
Taxability of Pool Repair and Cleaning Services (Real Property)
Section 212.05(1)(i)1.a., Florida Statutes (F.S.), and
Rules 12A-1.0091, and 12A-1.051, Florida Adminsitrative Code (F.A.C.)

Dear XXX:
This response is in reply to your letter dated November 18, 2010, and subsequent letter dated
February 2, 2011, requesting the Department’s issuance of a Technical Assistance Advisement
(“TAA”) pursuant to s. 213.22, F.S., and Chapter 12-11, F.A.C., regarding the above-referenced
matter. An examination of your letter has established that you have complied with the statutory and
regulatory requirements for issuance of a TAA. Therefore, the Department is hereby granting your
request for a TAA.
ISSUE STATEMENT:
Whether cleaning and repairing cement water fountains are subject to sales tax.
FACTS:
The taxpayer cleans and repairs concrete indoor and outdoor water fountain pools located on the
customer’s property. The taxpayer’s customer is a large automobile dealership that contracted with
the taxpayer to clean and repair its cement water fountains that are located on the dealership
property. To clean and repair the fountains, the taxpayer adds chemicals to the water, skims and
cleans the pool walls and bottom, and repairs the motors and filtering systems, including water
spouts and other component parts. There is no written contract between the taxpayer and its
customer.
The water fountains are located just outside the building, and there is a similar fountain on the
inside of the building. Also, there is a fountain located at the edge of the property that is designed
to spout water three to four feet high, from beneath the ground level, creating the effect of a watergate by using water spouts that are connected to the fountain. Each water fountain consists of
equipment to spray the water, motor and filter systems, and a pool where the water falls and is
recycled through the system.

Technical Assistance Advisement
Page 2
REQUESTED ADVISEMENT:
Advice is requested on the taxability of cleaning and repairing the fountains, including the
component parts. Taxpayer takes the position that the services provided to the customer are for a
real property contract and charges to the customer are not subject to sales tax. The taxpayer has
treated both the cleaning services and any repairs made to the water fountains as real property
contracts, thus, not taxable. On the other hand, the taxpayer’s customer is of the opinion that the
services provided by the taxpayer are subject to sales tax. The taxpayer desires to resolve this
conflict and therefore has requested a binding opinion from the Department of Revenue.
DISCUSSION AND STATUTORY AUTHORITY:
The taxability of the transactions for repairs made to the water fountains will be based on the
fact that the classification of these fountains is real property.
Section 212.06(14), Florida Statutes (F.S.), defines the terms “real property” and “fixture” for
purpose of determining if a taxpayer is performing a real property contract. That statute
provides:
(a) “Real property” means the land and improvements thereto and fixtures and is
synonymous with the terms “realty” and “real estate.”
(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, Florida Administrative Code (F.A.C.), provides additional guidance on
deciding if an item is a fixture of real property. Paragraph (2)(c) of the rule provides in part:
(c)1. “Fixture” means an item that is an accessory to a building, other structure, or to land,
that retains its separate identity upon installation, but that is permanently attached to the
realty. Fixtures include such items as wired lighting, kitchen or bathroom sinks, furnaces,
central air conditioning units, elevators or escalators, or built-in cabinets, counters, or
lockers. . . .

3. The determination whether an item is a fixture depends upon review of all the facts and
   circumstances of each situation. Among the relevant factors that determine whether a
   particular item is a fixture are the following:
   a. The method of attachment. Items that are screwed or bolted in place, buried
   underground, installed behind walls, or joined directly to a structure’s plumbing or wiring
   systems are likely to be classified as fixtures. Attachment in such a manner that removal
   is impossible without causing substantial damage to the underlying realty indicates that an
   item is a fixture.
   b. Intent of the property holder in having the item attached. If the property holder who
   causes an item to be attached to realty 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. That intent

Technical Assistance Advisement
Page 3
may be determined by reviewing all of the property holder’s actions in regard to the item,
including how the item is treated for purposes of ad valorem and income tax purposes. . . .
The rule states that the lists of factors are only illustrative. Particular cases may involve
additional factors. The rule also notes that the weight to be given to the factors will vary from
case to case. The rule does provide that “swimming pool installation, including accessories and
parts that are permanently attached or are plumbed or wired into plumbing or electrical systems”
are generally considered to be real property improvements. See Rule 12A-1.051(17)(mm),
F.A.C.
Real property improvement jobs, including repairs made to real property, are classed based on
contract type and the contractor making improvements to real property is deemed to be the
ultimate consumer of the tangible personal property used in the performance of the contract. The
taxation of transactions regarding real property improvements is different from taxation of
transactions involving tangible personal property. In Rule 12A-1.051, F.A.C., subsection (3)
describes the classification of contracts by pricing. Under this subsection, contracts are classed
as: (a) Lump Sum; (b) Cost Plus or Fixed Fee; (c) Upset or Guaranteed Price; (d) Retail Sale plus
Installation; and, (e) Time and Materials contracts. Subsection (4) of the rule gives the general
rule of taxability for real property contractors, specifically: “Contractors performing only
contracts described in paragraph (3)(a), (b), (c), or (e) do not resell the tangible personal property
used to the real property owner but instead use the property themselves to provide the completed
real property improvement.”
The legislature has identified specific services and made them subject to Florida’s sales tax.
Section 212.05(1)(i), F.S., imposes sales tax on the charges for all nonresidential cleaning and
nonresidential pest control services (NAICS National Numbers 561710 and 561720). NAICS
National Number 561720 is the classification for “Janitorial Services,” which include
establishments primarily engaged in cleaning building interiors and/or windows. Pool cleaning,
which would include cleaning an outdoor or indoor concrete water fountain pool, is not included
within the specific NAICS National Number that is subject to tax on nonresidential cleaning
services. Special note must be given here for any instance where the contract calls for the weekly
or monthly furnishing of pool chemicals and chemical feeders, along with the term and price for the
chemicals without any cleaning or other maintenance; in such instances these contracts are for the
sale of tangible personal property and are taxable.
CONCLUSION:
The taxpayer is correct in its treatment of the cleaning and repair of the car dealer’s fountains as
real property. As a contractor engaged in the performance of a real property contract, the taxpayer
is deemed to be the ultimate consumer of the materials and supplies used in the performance of
such a contract. Accordingly, the taxpayer should be paying sales tax on its purchases of materials
and supplies, and the taxpayer should not charge the dealer sales tax on the cleaning or the repair of
its fountains.
CLOSING STATEMENT:
This response constitutes a Technical Assistance Advisement under § 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 § 213.22, F.S. Our response is predicated on those facts and the specific
situation summarized above. You are advised that subsequent statutory and administrative rule
changes or those 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.

Technical Assistance Advisement
Page 4

You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., which are subject to disclosure to the public under the conditions
of § 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort to
protect confidentiality, we request that 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.
If you have further questions with regard to this matter and wish to discuss them, you may contact
Technical Assistance and Dispute Resolution at 850/717-6729.
Sincerely,

Joseph D. Franklin III
Tax Law Specialist
Technical Assistance & Dispute Resolution
(850)717-6729
Control No. 97378