Were commercial kitchen-hood cleaning, hood repairs, and fire-suppression inspection or repair charges subject to Florida sales tax?

Plain-English summary

The Florida Department of Revenue concluded that this business's commercial kitchen-hood cleaning was not a taxable nonresidential cleaning service. The Department treated it like duct and ventilation-duct cleaning under NAICS code 561790, which was not among the taxable service codes.

The hood and the described fire-suppression system were fixtures and part of the real property. Customer charges for hood repairs, fire-suppression inspection alone, and replacement of parts on the fire-suppression system were therefore nontaxable. The contractor still had to pay tax when buying the parts and materials used in those real-property contracts.

One important limit applied: when the fire-suppression technician checked whether a fire-alarm panel received a signal from the system's dry contacts, that check was taxable alarm-system maintenance. If an invoice combined taxable and nontaxable services without separately stating the charges, the entire invoice was taxable.

What this means for you

Hood-cleaning businesses

The ruling treated the specific hood-cleaning work as nontaxable duct-type cleaning and treated hood-only inspections as nontaxable pure services.

Fire-suppression contractors

Inspection or parts replacement on the described suppression system was a nontaxable real-property service to the customer, but the contractor owed tax on purchased parts and materials.

Accountants and tax professionals

Separate alarm-system work from suppression-system and hood work on invoices. The ruling warned that an unseparated mixed invoice could make the full charge taxable.

Common questions

Q: Was commercial kitchen-hood cleaning taxable?
A: No, on the facts presented.

Q: Was inspection of the fire-suppression system alone taxable?
A: No.

Q: Was checking the alarm panel's signal taxable?
A: Yes, as alarm-system maintenance.

Q: Was replacing suppression-system parts taxable to the customer?
A: No, but the contractor had to pay tax on the parts and materials it purchased.

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 codes 561720, 561790, and 561621

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 15A-009

Original ruling text

Executive
Director
Marshall Stranburg

QUESTION 1: IS THE CLEANING OF NONRESIDENTIAL KITCHEN HOOD EXAUST
SYSTEMS SUBJECT TO FLORIDA SALES AND USE TAX?
ANSWER: NO, CLEANING OF NONRESIDENTIAL KITCHEN HOOD EXAUST
SYSTEMS WERE DETERMINED TO BE EQUIVELENT TO “DUCT CLEANING
SERVICES” AND “VENTILATION DUCT CLEANING SERVICES,” WHICH HAVE AN
NAICS CODE THAT IS NOT LISTED AS A TAXABLE CLEANING SERVICE.
QUESTION 2: IS THE REPAIR OF NONRESIDENTIAL KITCHEN HOOD EXAUST
SYSTEMS SUBJECT TO FLORIDA SALES AND USE TAX?
ANSWER: NO, NONRESIDENTIAL KITCHEN HOODS EXAUST SYSTEMS, SUCH AS
THOSE DESCRIBED BELOW, ARE REAL PROPERTY. REPAIRS TO REAL PROPERTY
ARE NOT SUBJECT TO SALES TAX.
QUESTION 3: WOULD INSPECTION ONLY OF NONRESIDENTIAL KITCHEN HOOD
EXAUST SYSTEMS BE SUBJECT TO FLORIDA SALES AND USE TAX?
ANSWER: NO, CHARGES SOLELY FOR HOOD INSPECTION ARE NOT SUBJECT TO
SALES TAX.
QUESTION 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.?
ANSWER: REAL PROPERTY; THE FIRE SUPPRESSION SYSTEM IS ATTACHED TO
THE BUILDING IN SUCH A WAY THAT IT BECOMES PART OF THE REAL PROPERTY.
QUESTION 5: WOULD AN INSPECTION ONLY OF A FIRE SUPRESSION SYSTEM
THAT WAS PURELY LABOR, WITH ABSOLUTELY NO TANGILE PROPERTY
TRANSFERRED BE EXEMPT?
ANSWER: THE INSPECTION OF THE FIRE SUPRESSION SYSTEM ALONE IS NOT
SUBJECT TO SALES AND USE TAX.
QUESTION: IF THERE ARE PARTS REPLACED ON THE FIRE SUPPRESSION SYSTEM,
IS THE ENTIRE INVOICE TAXABLE, PARTS ONLY TAXABLE, OR NOT TAXABLE AT
ALL?
Child Support – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Dr. Maurice Gogarty, Director  Information Services – Damu Kuttikrishnan, Director

http://dor.myflorida.com/dor/
Florida Department of Revenue
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2

ANSWER: THE REPLACEMENT OF PARTS ON THE FIRE SUPRESSION SYSTEM IS
NOT TAXABLE.
September 16, 2015
RE:

Technical Assistance Advisement – TAA 15A-009
Sales and Use Tax
XXXXX
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.)
XXXXX (herein “Taxpayer”)

Dear XXXXX:
This letter is in response to your request dated XXXXX, 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. 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 and subsequent email the facts are understood
to be as follows:
Kitchen Hoods
Taxpayer is in the business of cleaning and repairing nonresidential kitchen hood exhaust
systems. This procedure includes cleaning the exhaust fan, grease hood filters, the hood, and
associated duct work. There are no other areas cleaned or any other type of cleaning activity
performed under the agreement between Taxpayer and its customer. When needed, Taxpayer
will also make repairs or modifications to the hood system during a cleaning service.
Taxpayer’s cleaning, repair, and modification of an exhaust hood system is in compliance with
the specifications of the National Fire Protection Association (NFPA) Standard 96 code. This is a
standard that is developed for proper ventilation control and fire protection in commercial
cooking environments.
Fire Suppression System
Taxpayer’s business also includes the inspection and repair of fire suppression systems for
protecting restaurant cooking appliances, hoods, and ducts. The system suppresses fires by
spraying the plenum area, the filters, cooking surfaces, and exhaust duct system with a liquid fire
suppressant.
Taxpayer has provided a diagram of an installed system. The diagram shows the liquid
suppressant storage and release mechanism as mounted to the wall. The diagram also shows the
piping, to deliver the fire suppressant, as running through the hood. Taxpayer has noted some
systems may include accessories, including alarms and warning lights.

Technical Assistance Advisement
Page 3

The fire alarm, fire suppression system, and hood are separate systems, typically serviced by
separate technicians. The fire suppression system technician will check the dry contacts and, if
an alarm is present, will verify the alarm panel received the signal. Alarm technicians are usually
required to be licensed and “…do not have any responsibility to verify the proper operation or
installation of the kitchen suppression system.”
Taxpayer has additionally provided a copy of a scope of work and a few sample invoices. The
scope of work shown on the invoices does not contain any information pertaining to the
inspection or repair of the fire alarm system. Taxpayer further advised that its contracts do not
elaborate on the services it provides to its customers. However, Taxpayer did attach an
agreement that explains the scope of the work it provides as it pertains to hood cleaning services.
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?
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., and Rule 12A-1.0091(l)(a), F.A.C, provide 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 not covered under cleaning
   services. They are addressed in Rule 12A-1.051, F.A.C.
   The exact language in s. 212.05(l)(i), F.S., that imposes sales tax on nonresidential cleaning
   services, is as follows:
   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 ....

Technical Assistance Advisement
Page 4

(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 … for all:

b. Nonresidential cleaning NAICS Number 561720.

2. As used in this paragraph, "NAICS" means those classifications contained in the North
   American Industry Classification System, as published in 2007 by the Office of
   Management and Budget, Executive Office of the President.

The North American Industry Classification System (NAICS) is the standard used by federal
statistical agencies to classify business establishments for the purpose of collecting, analyzing,
and publishing statistical data related to the U.S. business economy. As noted above,
nonresidential cleaning services that are subject to tax are classified under NAICS Number
561720. See also Rule 12A-1.0091, F.A.C.
"Real property" is defined in section 212.06(14)(a), F.S., as "the land and improvements thereto
and fixtures ...." "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….” See section 212.06(14)(b). Rule 12A-1.051(3), F.A.C.,
provides the criteria for determining whether an item is a fixture. "Improvements to real
property" includes the activities of building, erecting, constructing, altering, improving,
repairing, or maintaining real property. See section 212.06(14)(c).
Under Rule 12A-1.051, F.A.C., the real property contractor is the ultimate consumer of repairs
made to real property. Therefore, the real property contractor is required to pay sales and use tax
on its purchases of materials, supplies, parts, and any other taxable items used in the repair. The
contractor should not charge the customer sales tax.
Section 212.05, F.S., provides detective, burglar protection, and other protective services NACIS
numbers 561511, 561612, 561613, and 561521, are subject to sales tax. Additionally, Rule 12A1.0092(2), F.A.C, provides that burglar or fire alarm or other security system devices monitoring
and maintenance services are taxable. The monitoring or maintenance of alarm or security
systems is a taxable service whether such systems are considered to be tangible personal property
or a part of real property. The term “maintenance” includes “any inspection of an alarm or
security system to confirm its proper working order.” The rule also states, in relevant 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, or are
those investigative services which are rendered to obtain evidence or other information … of a
kind typically performed by detective or investigative agencies.”

Technical Assistance Advisement
Page 5

Discussion & Conclusion

1. Taxability of Hood cleaning services.
   Under Florida law, the imposition of tax on certain services is now based on the North American
   Industry Classification System (NAICS) codes. The use of NAICS codes resulted from the 2009
   Legislature’s enactment of Chapter 2009-51, Laws of Florida, which became effective on July 1,
2. This enactment changed the imposition of tax, from Standard Industrial Classification
   (SIC) codes, to “NAICS” numbers. The use of NAICS numbers subsequently affected the tax
   treatment of nonresidential exhaust hood cleaning services.
   Prior to the 2009 law change, Industry Group No. 734, classified as “Services to Dwellings and
   Other Buildings,” was deemed to contain services taxable under Chapter 212, F.S. Section
   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 No. 734. Within SIC Group No. 734 was chimney
   cleaning services.
   Prior to revision of administrative Rule 12A-1.0091(1)(a), F.A.C., in January 2011, it was stated
   that chimney cleaning services were taxable as a nonresidential cleaning services. Hood cleaning
   services were not mentioned in the rule, nor was there a specific classification within the SIC
   codes for this type of service. However, based on the Department’s research of the SIC codes
   and prior Department rulings, hood cleaning services were considered akin to chimney cleaning
   services; thus, it was determined that hood cleaning services were also subject to sales and use
   tax under s. 212.05(1)(i)2., F.S.
   Under rule promulgation, “chimney cleaning services” was removed from the list of taxable
   services in the rule. Such services were no longer included in the list of taxable services under
   the 2009 law enacting the use of NAICS codes; specifically, NAICS Number 561720 is
   applicable to nonresidential cleaning services. With revision of the rule, the Department
   reviewed the appropriate NAICS codes and did not find a specific classification for "hood
   cleaning." The Department did find NAICS code 561790, for "duct cleaning services" and
   "ventilation duct cleaning services," which are categorized as "Other Services to Buildings and
   Dwellings." These services are similar to hood cleaning services.
   As noted above, NAICS code 561790 is not listed as a taxable code under Florida law; therefore,
   exhaust hood cleaning services should also be interpreted as not being subject to sales tax as a
   taxable cleaning service.
3. Taxability of hood repair services.
   Exhaust hoods are physically attached to the building, which are part of the real property, and the
   hood is a necessary part of the building for its use in a commercial kitchen. Additionally, these
   hoods are part of a system that is expected to remain with the structure indefinitely. Therefore,

Technical Assistance Advisement
Page 6

the hoods meet the qualifications as a fixture under section 212.06(14)(b), F.S., and any repairs
made to the hood will be treated as a real property improvement. Real property improvement
contracts, inclusive of maintenance or modification, are not subject to tax. Therefore, the hood
repair service is not subject to sales tax. However, Taxpayer should pay tax on the materials and
equipment it purchases for use in such contracts.

3. Taxability of inspection only.
   Pure service transactions, such as hood inspections, that do not involve the sale of tangible
   personal property are not subject to tax under Florida law, unless specifically authorized in
   Chapter 212, F.S. Hood inspections alone do not fit within the enumerated taxable services in
   Chapter 212, F.S.; therefore, charges exclusively for hood inspections are not subject to sales
   and use tax.

4. Whether the fire suppression system is real property, tangible personal property, or a
   burglar/fire alarm system?
   As noted above, the monitoring or maintenance of alarm systems is a taxable service whether
   such systems are considered to be tangible personal property or a part of real property. While the
   fire suppression system is designed to minimize loss of life, limb, or property, it is not the kind
   of service usually rendered by a security or alarm service. Instead, the system is similar to a
   sprinkler system. 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 the real
   property. Therefore, the fire suppression system is real property.

5. Whether the inspection of the fire suppression system with no tangible personal property being
   transferred is taxable?
   As noted in the response to question 4, the fire suppression system is not an alarm under Rule
   12A-1.0092(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 and use tax.
   However, as noted in the facts, when a fire alarm system is present the fire suppression
   technician will check that the alarm panel receives the signal from the dry contacts. The
   inspection and/or repair of a fire alarm system, including fire alarm components of the sprinkler
   system, and any other part of the fire alarm system would be included under NAICS National
   Number 561621. 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 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 receives a signal from the contacts.

6. Whether replacing parts on the fire suppression system makes the entire invoice, parts of the
   invoice, or none of the invoice taxable?

Technical Assistance Advisement
Page 7

As noted above, the fire suppression system is a real property fixture. The replacement of parts,
of the fire 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 remain a real
property contract and would not be subject to sales tax. However, the Taxpayer is required to pay
sales tax on its purchase of the parts and materials 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.
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
Taxpayer. Your response should be received by the Department within 15 days of the date of this
letter.
Sincerely,

Timothy Surface
Senior Attorney
Technical Assistance and Dispute Resolution
(850) 717-7312
TAA 194176