The Florida Department of Revenue recently released TIP No. 24A01-14 which provides guidance on the taxability of interior and exterior holiday decorations. According to the publication, charges relating to the design, installation, removal and storage of holiday decorations and lighting are taxable when tangible items are furnished with the services.
Companies who provide services to install and remove holiday decorations must charge sales tax on the total charge if the company provides any tangible items such as clips, adhesives, nails, screws, extension cords, or any other tangible item. Companies who provide services to install and remove holiday decorations, but do not provide any tangible items, are not required to charge sales tax on the service charge, however, the company must keep detailed records showing no transfer of tangible items. Additionally, charges made solely for the storage of holiday decorations are taxable if the customer has unlimited access to the decorations.
Lastly, Florida does provide an exemption for purchases made solely for the purpose of leasing tangible items. Companies purchasing holiday decorations exclusively for leasing purposes can do so tax free by presenting their resale certificate to the vendor. This exemption, however, does not apply to purchases made for dual usage. This means that a company purchasing holiday decorations for company use and for leasing purposes must pay the sales tax at the time of purchase but must also collect and remit sales tax when leasing the decorations.
Whether in Florida or any other state, it is important to evaluate when services are taxable and whether the inclusion of tangible goods impacts the taxability decision. Generally, services are only taxable when specifically enumerated in the laws of the state depending on the state. When the service is bundled with tangible items, the true object of the transaction should be considered: is the intention to use or obtain the tangible goods or benefit from the services? Because each state differs in its taxability of sales and services, reviewing the state laws, regulations, and taxpayer information publications will provide more guidance.
You can find the detailed information with sample scenarios directly on the Florida Department of Revenue website. (Florida Department of Revenue, Tax Information Publication, No. 24A01-14, October 25, 2024)