Were final cleanup services required to complete new construction or renovation subject to Florida sales tax?

Subject

Construction Cleaning Services

Plain-English summary

Final construction cleanup required to finish a new or renovated building was not subject to Florida sales tax. The subcontractor removed debris and cleaned interior and exterior surfaces so the general contractor could fulfill the prime contract and obtain the final certificate of occupancy.

The subcontractor performed no repair, alteration, construction, or other improvement work and supplied no building materials. Its narrow cleanup service could fit the general wording for taxable nonresidential cleaning in SIC 7349, but it was specifically listed as “cleaning new buildings after construction” within construction SIC 1799, a category the Legislature had not authorized Florida to tax.

The Department strictly construed the ambiguity against imposing tax and treated the work as nontaxable construction cleaning. It drew a clear line at later maintenance: routine nonresidential janitorial service after the construction job was complete remained taxable.

What this means for you

Timing and contractual purpose matter. Cleanup integrated into completing construction and securing occupancy received different treatment from ongoing building cleaning after turnover.

A contractor performing both types of work must separate them and collect tax on taxable janitorial services. The source did not extend the construction-cleanup treatment to ordinary recurring maintenance.

Common questions

Q: What work was nontaxable? Removing construction debris and cleaning newly constructed or renovated building surfaces as part of completing the prime contract.

Q: Did the subcontractor have to perform construction work too? No. Its scope was limited to cleanup, with no materials, repairs, alterations, or improvements.

Q: Why was the cleanup not treated as taxable building cleaning? It was specifically included in construction SIC 1799, while the tax statute authorized tax for the competing cleaning classification.

Q: Would later janitorial service at the same building be taxable? Yes. The ruling expressly used that as the example of taxable post-construction service.

Citations and references

• Fla. Stat. § 212.05(1)(j) — tax on specified nonresidential cleaning services
• Fla. Admin. Code r. 12A-1.0091(1)(a) — nonresidential cleaning services
• 1987 Standard Industrial Classification No. 7349 — building cleaning and maintenance services
• 1987 Standard Industrial Classification No. 1799 — construction special trades, including cleaning new buildings after construction
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98A-030

Original ruling text

SUMMARY

This Technical Assistance Advisement answers the question whether the taxpayer's sales of construction services are taxable under s. 212.05(1)(j), Florida Statutes and Rule 12A-1.0091(1)(a), F.A.C. The taxpayer is a subcontractor on contracts involving improvement to realty. The general contractor engages the taxpayer to perform cleaning services necessary for the fulfillment of the contractual obligation to the owner of the property. The taxpayer's business involves removing debris from the property, and cleaning the interior and exterior surfaces of the newly constructed/renovated building. These "clan up" services are required for the prime contractor to complete the job and to get the final certificate of occupancy, and are an integral part of his service. The taxpayer does not perform any other construction services.

In the TAA we concluded that the cleaning services are construction cleaning services. While they may be viewed as being included within the general description of cleaning services contained in SIC Industry No. 7349, an industry number for which sales taxes are applied, the services are clearly included within the services described under SIC Industry No. 1799, and industry number for which sales taxes are not authorized. Given that sales tax statutes are strictly construed against the taxing authority and given the clear inclusion of the construction cleaning services within an SIC Industry Number for which taxes were not authorized by the Legislature, the construction cleaning services at issue herein are not subject to tax. However, if the taxpayer performs services that are both taxable and non-taxable, the taxpayer is obligated to charge tax on those services subject to tax. For instance, if the taxpayer cleans a nonresidential building after construction (non-taxable), and later performs janitorial services at the same location (taxable), the taxpayer is required to collect tax on postconstruction nonresidential janitorial services.

Apr 30, 1998

Re: Technical Assistance Advisement No. 98A-030 Sales and Use Tax - Construction Cleaning Services Section: 212.05(1)(j), F.S. Rule: 12A-1.0091(1)(a), F.A.C.

Dear :

Your letter of January 10, 1998, requested a Technical Assistance Advisement on the application of the Sales and Use Tax to the above referenced matter. This response to your request constitutes a Technical Assistance Advisement under Chapter 12-11, Florida Administrative Code, and is issued to you under the authority of s. 213.22, Florida Statutes.

DISCUSSION OF FACTS

XXX (hereinafter referred to as Taxpayer) is a subcontractor on contracts involving improvements to realty. The general contractor engages the taxpayer to perform cleaning services necessary for the fulfillment of the contractual obligation to the owner of the property.

The taxpayer's business involves removing debris from the property, and cleaning the interior and exterior surfaces of the newly constructed/renovated building. "These `clean up' services are required for the prime contractor to complete the job and to get the final certificate of occupancy, and are an integral part of his service."

The taxpayer does not perform any other construction services. As a sub-contractor, the taxpayer's scope of work does not involve repairing, altering, improving, or constructing real property. The taxpayer does not furnish or use any building materials for constructing or improving realty. The taxpayer's scope of work is limited to cleaning services as described above.

REQUESTED ADVISEMENT
Your question concerns the taxability of providing cleaning services for new construction as a real property contractor. You wish to know whether the taxpayer's sales of construction services are taxable under [s. 212.05(1)(j), Florida Statutes].

DISCUSSION, ANALYSIS, and CONCLUSION OF LAW

Section 212.05(1)(j)(FN 1), F.S. [1997], and Rule 12A1.0091(1)(a), F.A.C., provide that nonresidential cleaning services are subject to sales tax. This provision in the Florida Statutes, which became effective on September 1, 1992, is stated as follows:

(j)1. At the rate of 6 percent on charges for all: a. ....

b. Nonresidential cleaning... services (SIC Industry Group Number 734).

2. As used in this paragraph, "SIC" mean those
   classifications contained in the Standard Industrial Classification Manual, 1987, as published by the Office of Management and Budget, Executive Office of the President....

The Standard Industrial Classification (SIC) is the statistical classification standard underlying all establishment-based Federal economic statistics classified by industry. The 1987 edition of the "Standard Industrial Classification Manual" describes Industry Group No. 734 as "Services to Dwellings and Other Buildings". More specifically, establishments providing cleaning services under this industry group (Industry No.7349) are described as follows:

Establishments primarily engaged in furnishing building cleaning and maintenance services, not elsewhere classified, such as window cleaning, janitorial service, floor waxing, and office cleaning.... Acoustical tile cleaning services Building cleaning service, interior

Chimney cleaning service
Custodians of schools on a contract or fee basis Floor waxing service Housekeeping (cleaning service) on a contract or fee basis Lighting maintenance service (bulb replacement and cleaning Maid service on a contract or fee basis Maintenance, building: except repairs Office cleaning service Service station cleaning and degreasing service Telephone booths, cleaning and maintenance of Venetian blind cleaning, including work done on owners' premises Window cleaning service

Major Group 17, described as "Construction - Special Trade Contractors," pertains to those establishments engaged in construction activity. Under this group, Industry No. 1799 describes "Special Trade Contractors, Not Elsewhere Classified" as follows:

Special trade contractors primarily engaged in construction work, not elsewhere classified, such as construction of swimming pools and fences, erection and installation of ornamental metal work, house moving, shoring work, waterproofing, dampproofing, fireproofing, sandblasting, and steam cleaning of building exteriors.

Listed under this general description are certain services that fall under this group. Included in this list are the following services:

Cleaning building exteriors - contractors Cleaning new buildings after construction - contractors Steam cleaning of building exteriors - contractors

Section 212.05(1)(j)2., F.S., states the intention of the Legislature to tax services of a type listed in SIC Industry Group No. 734. Within this SIC Industry Group is SIC Industry No. 7349. As discussed above, SIC Industry No. 7349 includes cleaning services; however, no distinction is made between cleaning services that take place during construction and those

that take place after the construction of the building is completed and the building is ready for occupancy. In contrast, cleaning new buildings after construction is specifically listed under SIC Industry No. 1799 within Industry Group No. 179.

In this case, the cleaning services are construction cleaning services. While they may be viewed as being included within the general description of cleaning services contained in SIC Industry No. 7349, an industry number for which sales taxes are applied, the services are clearly included within the services described under SIC Industry No. 1799, an industry number for which sales taxes are not authorized. Given that sales tax statutes are strictly construed against the taxing authority and given the clear inclusion of the construction cleaning services within an SIC Industry Number for which taxes were not authorized by the Legislature, the construction cleaning services at issue herein are not subject to tax.

If the taxpayer performs services that are both taxable and non-taxable, the taxpayer is obligated to charge tax on those services subject to tax. For instance, if the taxpayer cleans a nonresidential building after construction (non-taxable), and later performs janitorial services at the same location (taxable), the taxpayer is required to collect tax on postconstruction nonresidential janitorial services.

This response constitutes a Technical Assistance Advisement under s. 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 s. 213.22, F.S. Our response is based 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 and your request are public records under Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Your name, address, and any other details which might lead to

identification of the taxpayer must be deleted by the Department before disclosure. In an effort to protect the confidentiality of such information, we request you notify the undersigned in writing within 15 days of any deletions you wish made to the request or the response.

Sincerely,

Joseph D. Franklin III
Tax Law Specialist
Technical Assistance and
Dispute Resolutions Section

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NOTICE UNDER THE AMERICANS WITH DISABILITIES ACT Persons needing an accommodation to participate in any proceeding before the Tax Policy and Dispute Resolution Office, should contact that office at 904-488-0717 (voice), or 1-800DOR-8331 (TDD), at least five working days before such proceeding. You may also call via the Florida Relay System at 1-800-955-8770 (voice), or 1-800-955-8771 (TDD).

FOOTNOTE 1 Formerly s. 212.05(1)(k), F.S.