May a Florida janitorial company buy restroom supplies tax-free for resale when it also provides taxable cleaning services?

Plain-English summary

The Florida Department of Revenue allowed a commercial cleaning company to buy certain restroom supplies tax-free for resale when it clearly sold them to customers as separate line items. Those products included hand soap, toilet paper, paper towels, trash-can liners, disposable toilet-seat covers, and feminine-hygiene products placed for customer use.

The invoices had to show both a separate description and price. Without that separate billing, the company was treated as the consumer and owed sales or use tax on the supplies.

Cleaning chemicals, polishes, and solutions received different treatment. Because the company directly used and depleted them while performing its cleaning contracts, it was the ultimate consumer regardless of billing method and could not buy them with a resale certificate.

What this means for you

Janitorial service companies

Separate goods customers consume from products your staff consumes in performing the service. Only the former can qualify as resale inventory on these facts.

Billing and procurement teams

A combined square-foot rate is not enough to demonstrate a separate sale. The invoice should identify and price the resale products apart from cleaning services.

Accountants and tax professionals

Drop shipment and customer-site storage did not convert cleaning chemicals into resale goods. Actual use and consumption controlled their treatment.

Common questions

Q: Which restroom products qualified for resale treatment?
A: The listed hand soap, paper products, liners, seat covers, and feminine-hygiene products qualified when separately described and priced.

Q: What if those products are bundled into the cleaning rate?
A: The cleaner is treated as the consumer and owes sales or use tax on its purchase.

Q: Can cleaning chemicals be bought for resale?
A: No. The company itself used them to clean and polish customer premises.

Q: Does customer choice matter?
A: It supported the analysis, but the ruling still required clear separate-line-item billing to establish the resale transaction.

Citations and references

• Fla. Stat. §§ 212.02(14)(a), (15), (16), and (20)
• Fla. Stat. § 212.05(1)(a)1.a. and (1)(i)
• Fla. Stat. § 213.22
• Fla. Admin. Code rr. 12A-1.0091 and 12A-1.0161(5)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 19A-004

Original ruling text

QUESTION: As a registered sales tax dealer, Taxpayer is asking whether it can extend its resale
certificate to purchase hand soaps, toilet paper, paper towels, trash can liners, disposable toilet
seat covers, and feminine hygiene products, tax exempt for purposes of resale to its customers
as separate (taxable) transactions from the sale of taxable cleaning services.
ANSWER: Where Taxpayer can clearly demonstrate that hand soaps, toilet paper, paper towels,
trash can liners, disposable toilet seat covers, and feminine hygiene products are being sold to
the customer as a separate line item transaction, from the charges for cleaning services,
Taxpayer will be allowed to purchase these products tax exempt as a sale of tangible personal
property for resale.
January 28, 2019

XXXX
XXXX
XXXX
XXXX
RE:

Technical Assistance Advisement 19A-004
XXXX “Taxpayer”)
XXXX
Sales and Use Tax
Taxability of Products Used to Provide Cleaning Services.
Sections: 212.02(14)(a), (15),(16),(20), 212.05(1)(a)1.a, and 212.05(1)(i), Florida
Statutes (F.S.)
Rules: 12A-1.0091(1)(a), (8), and 12A-1.0161(5), Florida Administrative Code (F.A.C.)

Dear Sir:
This letter is in response to your request dated May 9, 2014, 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 cleaning services that include sales of tangible personal
property. 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
Taxpayer is a Florida corporation which is in the business of providing taxable cleaning services
to commercial establishments and state and local governments in the State of Florida. Taxpayer
contracts with the owners, landlords, or managers (each a “customer”) of commercial and

XXXX
January 28. 2019
Florida Department of Revenue
Page 2

government buildings to provide cleaning services. Taxpayer charges a flat contract rate,
calculated on a per square foot basis for its cleaning services. The rate will vary, depending
upon the amount and type of cleaning services to be provided and whether the Taxpayer will
supply the customer with certain items of tangible personal property in addition to providing the
cleaning services. Customers have the option to purchase these items of tangible personal
property from Taxpayer or another vendor.
The items of tangible personal property for which Taxpayer claims a customer may elect to buy
from Taxpayer include items that can be identified as (1) those placed in designated receptacles
for use by the customer, and (2) those directly used by Taxpayer in the specific performance of
cleaning services. The items that are placed in receptacles by Taxpayer include hand soaps,
toilet paper, paper towels, trash can liners, disposable toilet seat covers, and feminine hygiene
products (hereafter “XXXX A”). The other items consumed by Taxpayer are exclusively used
by Taxpayer in the specific performance of providing cleaning services, which include, but are
not limited to, chemicals, polishes, and cleaning solutions (hereafter “XXXX B”). Taxpayer
applies these products to various surfaces (i.e., floors, walls, counters, restroom stalls, fixtures,
etc.) for cleaning and polishing purposes per Taxpayer’s contract with the customer to provide
cleaning services.
Taxpayer asserts it pays tax to its vendor for all items purchased which are drop shipped directly
to a customer’s building. The items are then stored in the customer’s cleaning closet(s) for
exclusive use in the building. Depending on the customer’s purchasing choice to include or
exclude a purchase from Taxpayer of the XXXX A or XXXX B products, Taxpayer will use one
of the following three methodologies to charge the customer:

1. Cleaning Services and resale items are separated into two-line items and each line
   item is calculated by a square foot rate in the same invoice.
2. Cleaning Services and resale items are combined into single calculation based on a
   square footage rate in the same invoice.
3. Cleaning Services and resale items are billed in two (2) separate invoices. Cleaning
   services are billed based on a calculated square footage rate. Resale items are
   itemized in a separate invoice based on a specified sales price.
   Taxpayer asserts that it also charges and collects sales and use tax for all cleaning services and
   all items it considers to be resale items. In addition, Taxpayer states that it maintains a record of
   the quantities and the cost of the resale items that are sold/provided to each customer on a
   monthly basis.
   Taxpayer asserts it is not questioning the taxability of its purchases of cleaning equipment and
   tools used in its cleaning business, which are items not included in XXXX A or XXXX B, such
   as mops, vacuum cleaners, brooms, rags, dust and scrubbing brushes, etc. Taxpayer states it
   recognizes and agrees that it is the ultimate consumer of these items.
   REQUESTED ADVISEMENT

XXXX
January 28. 2019
Florida Department of Revenue
Page 3

As a registered sales tax dealer, Taxpayer is asking whether it can extend its resale certificate to
purchase tax exempt both the XXXX A products and the XXXX B products for purposes of
resale to its customers as separate (taxable) transactions from the sale of taxable cleaning
services.
APPLICABLE LAW AND DISCUSSION
Section 212.05(1)(i)l.b., F.S., and Rule 12A-1.0091(1)(a), F.A.C., provide that nonresidential
cleaning services as enumerated in NAICS National Number 561720 of the North American
Industry Classification System, published 2007, are subject to tax. Nonresidential cleaning
services are those services rendered to maintain the clean and sanitary appearance and operating
condition of nonresidential building interiors. NAICS National Number 561720, janitorial
services, includes cleaning offices, shopping centers, and restrooms.
Section 212.05(1)(i)4., F.S., requires a separate identification of sales of taxable services from
nontaxable services and other items that are not taxable, only if the seller or service provider
intends to avoid collecting and remitting sales or use tax on some portion of the total invoice
amount. Here, Taxpayer desires to structure its transactions where there is a separate charge for
the sale of taxable cleaning services from the charge for taxable sales of tangible personal
property.
Taxpayer is of the opinion that the items of tangible personal property identified in both XXXX
A and B, are eligible for tax treatment as retail sales of tangible personal property and are
distinguishable from its sale of nonresidential cleaning services. As a retail sale, Taxpayer
would be eligible to purchase products from both XXXX A and B from its vendor tax exempt
through usage of its dealer’s resale certificate. To differentiate the two distinct taxing privileges
and derive the tax treatment requested, Taxpayer asserts the customer can freely elect to acquire
its cleaning services with or without a purchase from product XXXX A or B. Taxpayer charges
its Customer more if the Customer decides to purchase products from either XXXX as opposed
to a lesser charge if the Customer elected not to make a purchase from the product groups.
Further, Taxpayer specifically asserts sales of product from XXXX B should be treated as retail
sales since they are also drop shipped directly to a specific customer and stored in that
customer’s closets for exclusive use in their building.
Taxpayer’s position clearly questions the application of Rules 12A-1.0161(5), and 12A1.0091(8), F.A.C., which designates the cleaning service provider (i.e., Taxpayer) as the ultimate
consumer of items of tangible personal property purchased for use in connection with the
performance of cleaning services.
The items described as XXXX A are not directly depleted and consumed by Taxpayer in the
performance of its specific duties under its contractual obligation to provide taxable cleaning
services. Thus, it is conceivable that Taxpayer is reselling these items to its customer. Taxpayer
may resale products described as XXXX A because these products are placed in a designated
receptacle for use by the customer. Likewise, since these products are not exclusive used by
Taxpayer and depleted solely by Taxpayer in the performance of its specific duties under the

XXXX
January 28. 2019
Florida Department of Revenue
Page 4

contract (i.e., cleaning service), it is also reasonable for these products to be resold to the
customer.
Where Taxpayer separately states on the invoice or billing document a charge for Group A
products, Taxpayer is demonstrating that these products are being sold to the customer.
Taxpayer may purchase these items exempt as a sale or purchase for resale. This entails showing
both the line item description and price of the products sold, separate from the charge for
cleaning services. In these instances, Taxpayer may extend its resale certificate to its vendors
(thus not being subject to tax) when purchasing XXXX A products.
In those instances where Taxpayer does not separately state the charge for XXXX A products on
the customer’s invoice or billing document, Taxpayer is liable for “use” tax on these purchases at
the time of purchase. Taxpayer is not demonstrating that a “sale” has occurred. In these
instances, Taxpayer is not making a separate sale of tangible personal property and Taxpayer is
deemed the ultimate consumer of the (XXXX A) products.
Unlike the products described as XXXX A, Taxpayer is not reselling its products described as
Group B and is the ultimate consumer of these products as conditioned by Rule 12A-1.0161(5).
F.A.C. Taxpayer directly and exclusively use these products to wipe, polish, and clean the areas
in the building; such as floors, walls, counters, restroom stalls, fixtures, and any other areas
included under its contractual obligation to provide cleaning services. Taxpayer cannot claim
that it is reselling products described as XXXX B given that Taxpayer unequivocally and
undeniably is the end-user of these products.
CONCLUSION
Where Taxpayer can clearly demonstrate that XXXX A products are being sold to the customer
as a separate line item transaction from the charges for cleaning services, Taxpayer will be
allowed to purchase these products tax exempt as a sale of tangible personal property for resale.
However, Taxpayer must pay sales tax, or accrue and remit use tax on the purchase price paid for
XXXX B products regardless of which billing method is used. Taxpayer is the ultimate
consumer of these produces which are exclusively and directly used by Taxpayer in the
performance of a cleaning service.
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

XXXX
January 28. 2019
Florida Department of Revenue
Page 5

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.

If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at 850-717-6729.

Sincerely,

Joseph D. Franklin III
Joseph D. Franklin III
Tax Law Specialist
Technical Assistance and Dispute Resolution
JDF3/
Control #: 169141