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Florida Sales of Installed Countertops and Built-In Cabinetry Considered Improvements to Real Property


Construction

The Florida Department of Revenue has issued guidance concerning contracts to sell and install countertops and cabinets. Contracts to sell and install countertops, kitchen cabinets and knobs are considered real property contracts. As a result, contractors entering into such a contract should not charge Florida sales tax to the customer. Instead, contractors owe use tax on the fabricated cost of those items. The aforementioned items are classified as improvements to real property once they are installed, thus contractors selling and installing them are making improvements to real property regardless of whether the contractor separates on the invoice charges for materials and labor. However, if the contract is a retail sale plus installation then sales tax should be charged to the customer. If a taxpayer has previously paid sales tax to a contractor on a real property contract, they must secure a tax refund from the contractor and not from the Florida Department of Revenue. Any refund of tax to the contractor from the Department of Revenue will be offset by the use tax it owes on the fabricated cost of the items if it hasn’t already been paid. (Technical Assistance Advisement, No. 10A-042, Florida Department of Revenue, August 17, 2010)

(02/06/2011)
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