Cranes With Operators Constitute an Exempt Service in Florida

A Technical Assistance Advisement was issued by the Florida Department of Revenue clarifying that when a Florida taxpayer provides a crane to a customer on an operated and maintained basis, a lifting service is being provided and control of the crane is never transferred to the customer. The operation of a crane is a dangerous activity and an operator/employee cannot shift the control or operation to its customers. The customer has no right or authority to even enter the crane cab and the operators are solely responsible for the operation and safety of the crane. Therefore, the rental of a crane with an operator is a non-taxable service. An indemnity clause in the service contract stated that the equipment and operator were under the lessee’s exclusive supervision and control did not change the character of the contract from a service to a lease or transfer control of the crane to the lessee for sale and use tax purposes. Since the crane company was using the cranes to perform a nontaxable service, a use tax would be due from the crane company on its purchase or lease of the cranes. This ruling revises a Technical Assistance Advisement issued in 1995. (Technical Assistance Advisement, No. 95A-0220R, Florida Department of Revenue, October 25, 2007)

Posted on March 31, 2008