Form Gt-800007 - Sales And Use Tax On Building Contractors (Page 3 of 5) in pdf

How is Tax Calculated?

Lump sum, cost plus or fixed fee, guaranteed price, or time and materials contracts –

Contractors who purchase materials and supplies for use in a lump sum, cost plus or fixed fee,

guaranteed price, or time and materials contract must pay sales tax and applicable

discretionary sales surtax to the dealers selling them the materials and supplies. When the items

are delivered to a county imposing a surtax, surtax is due at the rate imposed by that county.

Contractors purchasing materials and supplies outside Florida for use in performing these types of

contracts, must pay use tax and surtax to the Department. Surtax is due at the rate imposed by the

county where the items are delivered. Contractors not required to register with the Department

must pay use tax on the materials and supplies purchased outside Florida; however, no surtax is

due.

Contractors who manufacture, produce, compound, process, or fabricate items used in performing

these types of real property contracts, must pay use tax and surtax on the fabrication cost of the

items used in fabrication. When the item is fabricated for use at a manufacturing plant site located

within a surtax county, surtax is due at the rate where the plant is located.

Fabrication costs include the cost of direct materials on which Florida sales tax and surtax has not

been paid, labor or service costs, and transportation charges. When a contractor fabricates an item

at the job site, fabrication labor is not included in the fabrication cost of the item.

Discretionary sales surtax applies to the first $5,000 of the sales amount on the sale or use of

materials and supplies or on the fabrication cost for items used in performing these real property

contracts. (See Rule 12A-15.008, Florida Administrative Code (F.A.C.), Construction Contractors

Who Repair, Alter, Improve, and Construct Real Property; Refund of Surtax.)

Retail sale plus installation contracts –

Contractors who sell materials that are specifically described and itemized in a retail sale plus

installation contract must collect sales tax and surtax on the sales price of the materials. Surtax is

due at the rate imposed by the county where the items are delivered.

Construction for Tax-Exempt Entities

Florida law provides that the purchase of construction materials or supplies by a contractor is

subject to Florida sales tax and surtax at the time of the sale, even if the purchase is for, or on

behalf of, a tax-exempt or governmental entity.

However, the tax-exempt entity may buy materials or supplies used in a real property contract tax

exempt when:

•

The materials and supplies are purchased directly by the tax-exempt entity. If a

purchase order is issued, the purchase order must be issued by the tax-exempt

entity.

•

The tax-exempt entity assumes the risk of loss of the materials at the time of purchase.

•

The tax-exempt entity takes title of the materials upon delivery to the jobsite.

•

Any invoice or billing issued for the materials purchased must be issued directly to the

tax-exempt entity.

•

The tax-exempt entity provides the materials vendor a copy of its Florida

Consumer’s Certificate of Exemption (Form DR-14); or the vendor may obtain an

authorization number issued by the Department to document tax-exempt sales

made to the entity.

•

Payment for the materials purchased must be issued by the tax-exempt entity directly to

the materials vendor.

Florida Department of Revenue, Sales and Use Tax on Building Contractors, Page 3

Form Gt-800007 - Sales And Use Tax On Building Contractors Page 3

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