Is Florida sales tax due on furnishings transferred with a home when the contract gives only a lump-sum furnishing amount?

Plain-English summary

The Florida Department of Revenue ruled that a real-estate broker did not have to collect sales tax on furnishings transferred with a home because the contract did not describe and price the individual tangible items separately from the real property.

The contract addenda assigned a separate lump sum—first $3,500 and later $7,500—to "all furnishings" other than personal possessions. But that generic description was not enough itemization to trigger the broker's collection duty under the cited rules.

The ruling explains the opposite case too: when furniture or other tangible property is separately described and separately priced in a real-estate contract, bill of sale, or similar document, sales tax applies to those items and the participating broker must collect it.

What this means for you

Home buyers and sellers

The treatment depends on how the sales documents identify the personal property. A lump-sum reference to furnishings is different from a priced inventory.

Real-estate brokers

Review addenda and bills of sale for separately described and priced tangible items. Detailed itemization can create a sales-tax collection obligation.

Accountants and tax professionals

Do not generalize this no-tax result to every furnished-property sale. The Department relied specifically on insufficient itemization in this contract.

Common questions

Q: Was the separate lump-sum amount enough to trigger tax?
A: No. The furnishings were not described and priced individually or with sufficient specificity.

Q: When would a broker have to collect tax?
A: When tangible items are separately described and separately priced apart from the real property.

Q: Did the Department decide the requester's other fraud and transaction-count questions?
A: No. Once it found no tax due on this transaction, it treated the remaining questions as moot.

Citations and references

• Fla. Stat. §§ 212.05 and 213.22
• Fla. Admin. Code rr. 12A-1.037(5)(e) and 12A-1.066

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 18A-012

Original ruling text

QUESTION: IS THE SALE OF TANGIBLE PROPERTY, IN CONJUNCTION WITH THE
SALE OF REAL PROPERTY, TAXABLE IN THIS CASE?
ANSWER: NO.
July 24, 2018
XXX
Technical Assistance Advisement 18A-012
Sales & Use Tax – Sales of Tangible Personal Property
Section 212.05, Florida Statutes (F.S.)
Rules 12A-1.066 & 12A-1.037, Florida Administrative Code (F.A.C.)
XXX (the Taxpayer)
SSN: XXX
Dear Mr. XXX:
This is in response to your letter dated June 5, 2018, requesting this Department’s issuance of a
Technical Assistance Advisement (“TAA”) pursuant to Section 213.22, F.S., and Rule Chapter 1211, Florida Administrative Code (F.A.C.), regarding the taxability of certain tangible property
sold in connection with a sale of real property. Your petition has been carefully examined, and
the Department finds it to be in compliance with the requisite criteria set forth in Rule Chapter
12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the
authority of section 213.22, F.S.
Issue
The issue is whether certain tangible property sold in connection with a sale of real property is
subject to sales and use tax.
Facts Provided by Taxpayer
Your request provides in pertinent part:
We are seeking a legal opinion related to the imposition of sales tax on the purchase of
personal property that is part of a real estate contract. The transaction related to the
personal property was part of the sale of the real property for specific consideration,
and handled by real estate brokers for both the buyer and seller. Specific questions we

XXXX
June 24, 2018
Florida Department of Revenue

Page 2

would like answered are:
I) In a transaction such as the one attached, [is] sales tax required to be collected
and sent to the Department of Revenue?
2) If sales tax [is] required to be collected, who is required to collect them and
send them to the Department of Revenue?
3) In a transaction such as the one attached, would it have been reasonable for
[the Taxpayer] to be concerned about committing sales tax fraud if no sales tax
was collected at closing?
4) What reason would there be for sales tax to not be required to be collected on
the attached transaction?
5) If the reason for number 4 is that it is an isolated transaction for which no
sales tax would be required to be collected and nobody would be committing
fraud for not collecting sales tax and directing [it] to the Department of Revenue,
how many transactions per year (or over any other period of time) would have
to take place by the broker(s) before such transactions would no longer be
considered “isolated” transactions and sales tax on personal property incidental
to a real estate contract would be required to be collected?
6) While the Department of Revenue may not have necessarily targeted this
particular transaction for collection of sales tax, would the Department of
Revenue have a reasonable basis to require the collection of sales tax on the
attached transaction as it related to the personal property transaction? If not,
then what guidelines would a lay person be able to rely upon to ensure that the
lay person would not later be held liable for the sales tax [that] arose from the
attached transaction?
The controlling agreement, entitled, “’AS IS’ Residential Contract For Sale And Purchase” (the
Agreement) was provided. The Agreement contains three addendums which provide, in part,
as follows:
[Addendum one] Seller and Buyer make the following terms and conditions part of the
Contract:
Buyer will pay $3,500.00 separate from the purchase price for all furnishings in the
property minus personal possessions such as clothing, shoes, towels, etc.

XXXX
June 24, 2018
Florida Department of Revenue

Page 3

[Addendum two] Seller and Buyer make the following terms and conditions part of the
Contract:
Buyer and seller agree to an adjusted purchase price which reflects the appraised value
of $120,000.00.

[Addendum three] Seller and Buyer make the following terms and conditions part of the
Contract:
Buyer will pay $7,500.00 separate from the purchase price for all furnishings in the
property minus personal possessions such as clothing, shoes, towels, etc.
Applicable Law & Discussion
Section 212.05, F.S., provides the authority to tax sales of tangible personal property (at retail)
by a Florida dealer. This authority extends to sales made by or through a broker. See Rule 12A1.037(5)(e), F.A.C.
Therefore, if tangible personal property is included in the sale of the real estate and a broker is
utilized, sales tax is due on the sale of the tangible personal property if it is separately itemized
and separately priced apart from the sale of the real property.
The status of a broker's duty to collect and remit sales tax on certain transactions in which such
brokers participates is described in Rule 12A-1.066, F.A.C. In this rule, a broker is required to
register as a dealer. A broker's participation in the sale of real estate, which sale includes
tangible personal property, requires that brokers charge the applicable sales tax on the sale of
such tangible personal property when the item or items of tangible personal property are
separately described and the sales price of such property is separately itemized in the sales
contract, bill of sale, or other similar sales document. If the tangible personal property (as in
this case) is not separately described and priced apart from the real property, the transaction is
considered to be a sale of real property not subject to sales tax.
In summary, when a real estate broker sells tangible personal property in conjunction with the
sale of real property, and where such tangible items are separately described and priced apart
from the price of the real property, in the sales contract, bill of sale, or other tangible evidence
documenting the sale, then tax will apply to the tangible items.
Conclusion
There is not enough itemization of the furnishings (in the contract) to obligate the broker to
collect tax on the sales of the “furnishings.” Accordingly, as the answer to question one is in the
negative (for reasons described above), the other questions become moot.

XXXX
June 24, 2018
Florida Department of Revenue

Page 4

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 10
days of the date of this letter.

Respectfully,
R. Clay Brower
R. Clay Brower
Technical Assistance & Dispute Resolution
(850) 717-6306
Control No: 84383