Florida Installation Contract is Contract for the Improvement of Real Property

A Florida taxpayer’s contract to install a commercial refrigeration system, purchased for a third party vendor, is considered a contract for the improvement of real property for sales and use tax purposes. The installation process, which consists of running tubing and wiring to and from the equipment in such a way that the conduits cannot be removed without damaging the building, is also considered improvement to real property. The maintenance portion of the contract is subject to sales tax since it includes maintenance on both real and tangible personal property. (Technical Assistance Advisement, No. 09A-035, Florida Department of Revenue, July 1, 2009, released August 2009).

Posted on March 11, 2010