Did a hotel contractor provide taxable housekeeping services rather than nontaxable temporary staffing?

Plain-English summary

Florida treated an outsourced hotel-housekeeping contract as taxable nonresidential cleaning rather than nontaxable temporary staffing.

The hourly payment method suggested a staffing arrangement, but it did not control. The contract let the contractor place supervisors at the hotel, manage employee hours and performance, assist with daily housekeeping inspections, and provide training, coaching, and counseling.

Florida emphasized that a temporary-help provider supplies workers without supervising them at the client's site. Because this contractor directly managed the cleaning work, the substance of the service was taxable housekeeping.

What this means for you

Hotels and other commercial-property operators

Calling a contract “staffing” does not determine taxability. Review who supervises the workers and manages the actual cleaning service.

Staffing and cleaning contractors

Direct onsite supervision of a taxable service can move the arrangement outside nontaxable temporary help.

Common questions

Did hourly billing make this staffing? No.

What fact mattered most? The contractor's supervision and management of the housekeeping employees.

Were the charges taxable? Yes.

Citations and references

• Fla. Stat. Sec. 212.05(1)(i)1.b.
• Fla. Stat. Sec. 212.05(1)(i)4.
• Fla. Admin. Code R. 12A-1.0091(1)(a)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 20A-009

Original ruling text

QUESTION:
Does the contract between Taxpayer and Contractor involve taxable housekeeping services and not
exempt temporary staffing or employment services?
ANSWER:
The contract between Taxpayer and Contractor involves taxable housekeeping services.

May 29, 2020
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
RE:

Technical Assistance Advisement – 20A-009
Sales and Use Tax
Taxability of Cleaning Services Performed by Cleaning and Staffing Contractor
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(8), 12A-1.0161(5), Florida Administrative Code (F.A.C.)

Dear Mr. XXXXXXX:
This letter is in response to your request dated January 9, 2019, 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 provided to a resort hotel. 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.
STATEMENT OF FACTS
Taxpayer is a Delaware company and is incorporated in the State of Florida. Its business involves
providing sleeping accommodations to transient guests at a resort hotel XXXXXXXXXXXXXXX. To
provide housekeeping services XXXXXXXXX, Taxpayer entered into a contractual agreement with
XXXXXXXXXXXXXXXXXXXX (hereinafter “Contractor”). Taxpayer believes the contract it has with
Contractor achieves its intent to purchase temporary employee or staffing services to

XXXXXXXXXX
Technical Assistance Advisement
Page 2

supplement its workforce. Taxpayer does not believe the contract with Contractor involves
services (e.g., nonresidential cleaning services) subject to sales tax.
To provide evidence for its assertions, Taxpayer submitted the written contract between
Taxpayer and Contractor. Pertinent excerpts from the contract read as follows:
Recitals
A. [Taxpayer] . . . owns the [Hotel];
B. Given the seasonality of the Florida hospitality industry, fluctuating business levels,
and the efficiencies typically yielded from the use of trained outsourced services, it is not
uncommon for hotels and resorts to engage staffing companies such as contractor to
provide the services of skilled hospitality labor on an as-requested basis;
C. [Taxpayer] desires to engage Contractor to assign employees, on an as-requested
basis, to provide those services described in XXXXXXXXXXX attached hereto (the
“Services”); and
D. Contractor has employees that are experienced in providing the Services and desires
to supply those employees to perform the Services for the Owner on the terms as set
forth herein.
Agreement

1. Term

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

2. The Services
   The Contractor shall, throughout the term of this Agreement, provide the Services
   outlined in XXXXXXXXXXXX attached hereto.
   Contractor acknowledges, understands and agrees that the Hotel is a first class luxury
   hotel providing the highest level of service to its guests, and therefore, Contractor agrees
   that it, and each person performing any of the Services on its behalf, shall at all times
   conduct their operations and provide the Services in a manner conforming with the image
   and quality of service, cleanliness and professional standards of [Taxpayer] and shall
   comply with the Rules for Contractors attached as XXXXXXXXXXXX.
   In addition to the foregoing, Contractor represents and warrants that it will comply
   with the following requirements:

XXXXXXXXXX
Technical Assistance Advisement
Page 3

•

Contractor will ensure each of its employees is adequately trained, skilled, and
experienced to ensure they will properly perform the Services in a first-class
manner;

3. Relationship Between Parties
   . . . It is expressly agreed that neither Contractor nor any employee of Contractor is or
   shall be deemed an employee of [Taxpayer] for any purpose whatsoever, but instead
   Contractor is and shall be deemed an independent contractor. It is expressly agreed that
   Contractor will select and designate all personnel to perform all the Services required
   under this Agreement… [Taxpayer] may, from time to time, make available certain
   facilities and amenities (e.g., employee parking lot, dining area and staff meals, and
   access/security cards) for use by Contractor and Contractor’s employees. . ..
   [Taxpayer] is interested only in the results of the Contractor’s Services. Subject to the
   rules and standards set forth herein, Contractor shall have sole responsibility and
   discretion for determining the manner, method, details and means of performing under
   this Agreement. . ..
4. Invoicing and Contractor Fees
   a. Contractor will invoice [Taxpayer] on a weekly basis for the Services performed.
   XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
   XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
   XXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

20. Assignment and Subcontracting

. . . Similarly, the Contractor shall not subcontract any of the Services provided
pursuant to this Agreement without [Taxpayer’s] prior written approval. . ..

The following excerpts taken from “Appendix A” attached to the contractual agreement read as
follows:

XXXXXXXXXX
Technical Assistance Advisement
Page 4

APPENDIX “A”

1. Contractor shall assign its employees (“Assigned Employees’”) to perform the Services
   outlined below at the Hotel, upon request by [Taxpayer].
2. Upon Contractor’s request, [Taxpayer] will allow Contractor to install one or more
   time clocks at the Hotel to permit Contractor to better track and manage the hours
   worked by its Assigned Employees for invoicing purposes and so that Contractor may
   ensure the prompt and accurate processing of withholdings and payroll for its
   Assigned Employees. Contractor shall be responsible for the cost, maintenance and
   functionality of these time clocks.

4. . . .
   Contractor has agreed to provide reduced rates to [Taxpayer] in exchange for
   [Taxpayer] providing at no charge to Contractor or Contractor’s employees, a shift
   meal for the Assigned Employees in the Hotel’s employee dining room, as well as
   parking in the Hotel’s parking facility along with roundtrip transportation from parking
   facility to the Hotel. . ..
5. . . .
   The structure of the Hotel’s Housekeeping Department shall be dictated by [Taxpayer]
   and may be modified in [Taxpayer’s] discretion from time-to-time. [Taxpayer]
   anticipates it will require the Services of one or more Supervisors, Housemen, Public
   Area Attendants. Turndown Attendants and Guest Room Attendants (as identified in
   the pricing charge below).
   Contractor will designate one or more liaisons between it and [Taxpayer] to ensure
   the [Taxpayer’s] quality standards and concerns are addressed and the Hotel’s needs
   are met. At [Taxpayer’s] discretion the liaison may be invited to attend and/or present
   at portions of the Hotel’s Housekeeping Department meetings for the purpose of
   receiving important information of all upcoming Hotel events, business levels, arrival
   and departures, service initiatives and the execution of any Hotel initiatives relative
   to Housekeeping.
   Contractor Supervisors: While Contractor may, upon request by [Taxpayer], supply the
   Services of a ‘Supervisor,” such position is not vested with managerial authority over any
   of [Taxpayer’s] employees nor the operations of the Hotel or its departments in any
   manager whatsoever. Instead, the full extent of authority of any of Contractor’s
   Supervisors, while at the Hotel, is limited to assisting and guiding other Assigned

XXXXXXXXXX
Technical Assistance Advisement
Page 5

Employees’ performance of the Services pursuant to and in compliance with this
Agreement and the standards imposed by [Taxpayer] (acting through [Taxpayer’s]
Director of Housekeeping and other [Taxpayer’s] managers). Among other tasks, the
Supervisor position will attend to the following:
•
•
•
•
•
•

Serving as a lead to ensure the day-to-day performance by the Assigned
Employees, and acting as a liaison between [Taxpayer’s] managers and the
Assigned Employees as needed:
Upon request by [Taxpayer’s] employees, assist with the resolution of any Guest
Request to ensure Guest’s satisfactions;
Implement any applicable portion of [Taxpayer’s] training programs to ensure the
Assigned Employees are adequately trained on how best to perform the Services
and meet the Hotel’s luxury standards;
Upon request by [Taxpayer’s] employees, assist with the daily housekeeping
inspection processes;
Implement [Taxpayer’s] coaching and counseling processes for the Assigned
Employees; and
Educating the Assigned Employees about [Taxpayer’s] culture and the
expectations and standards in place at the Hotel.

REQUESTED ADVISEMENT

Taxpayer ask whether housekeeping services performed by Contractor’s employees are subject
to sales tax.
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 in 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.
Rule 12A-1.0091(l)(a), F.A.C., provides the following illustrative examples of taxable services:

1. Acoustical tile cleaning services;
2. Building cleaning services, interior;
3. Custodial services;
4. Deodorant servicing of restrooms;
5. Disinfecting services;
6. Floor waxing services;

XXXXXXXXXX
Technical Assistance Advisement
Page 6

7. Housekeeping (cleaning services);
8. Janitorial services;
9. Maid services;
10. Maintenance of buildings (except repairs);
11. Office cleaning services;
12. Restroom cleaning services;
13. Service station cleaning and degreasing services;
14. Venetian blind cleaning;
15. Washroom sanitation service; and
16. Window cleaning (interior or exterior).
    The NAICS Industry Code No. 561320 provides the following description for Temporary Help
    Services:
    This industry comprises establishments primarily engaged in supplying workers to client’s
    businesses for limited periods of time to supplement the working force of the client. The
    individuals provided are employees of the temporary help service establishment.
    However, these establishments do not provide supervision of their employees at the
    client’s work sites. [emphasis supplied]
    Section 212.05(1)(i)4., F.S., requires a separate identification of taxable services from nontaxable
    services, and other items that are not taxable, if the seller or service provider intends to avoid
    collecting and remitting sales or use tax on the nontaxable portion of the total invoice amount.
    ANALYSIS
    Charges for nonresidential cleaning services are subject to sales tax. Typically, cleaning service
    providers supply the labor and personnel, supplies, and the supervision or management over the
    activities that are being performed when providing this service.
    Charges for staffing services are not subject to sales tax. The NAICS code number 561320,
    entitled, Temporary Help Services is not included under the taxable NAICS codes. However,
    temporary help service providers do not provide direct supervision of the employees at the
    client’s work site(s). Therefore, nontaxable staffing services are those services provided as
    temporary or continued help provided to another business on a contract or fee basis, and does
    not include direct supervision or management of a service taxable under s. 212.05(1)(i), F.S.
    Here, the fact that Taxpayer agrees to pay Contractor for the Services based on an hourly rate
    may suggest Contractor is providing staffing or employee services. However, the method of
    payment is not a dispositive factor for determining whether temporary help services are deemed
    the nature of the services rendered. The primary factor for this determination is whether
    management or supervision is provided.

XXXXXXXXXX
Technical Assistance Advisement
Page 7

The language in the contract between Taxpayer and Contractor suggests management and
supervision are included under the agreement for housekeeping services. As demonstrated in
the above excerpts from the contract, Contractor agrees to assign supervisors to manage the
Services performed by the assigned employees. Clause 1. of Appendix “A” states Contractor
assigns its employees to perform specific services at the Hotel. Clause 2. of Appendix “A” gives
the Contractor authorization to install one or more “time clocks” at the Hotel to “better track
and manage the hours worked by its employees. Under Clause 3.a. and 3.b. of Appendix “A” there
are provisions given to instances where an Assigned Employee may under “Contractor’s direct
supervision and control at the time.” Under Clause 4. of Appendix “A” provisions are given to
provide meals to Contractor’s employees. Under Clause 5 of Appendix “A” Contractor is
permitted to assign a supervisor and one or more liaisons to manage the Services. This Clause
also stipulates Contractor’s assigned supervisors provide assistance and guidance to Contractor’s
assigned employees. This includes ensuring Taxpayer’s quality standards and concerns are met
through daily performances by Contractor’s assigned employees. Contractor’s supervisors also
assist with daily housekeeping inspections processes, as well as training, coaching and counseling
processes for the assigned employees.
CONCLUSION
Housekeeping services performed by Contractor’s employees are subject to sales tax.
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.

XXXXXXXXXX
Technical Assistance Advisement
Page 8

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