[thegreenman_us]

I'm suffering from some confusion here, could someone make sense of this legalese for me? I have been operating under the impression that I must charge sales tax for plants and other materials I install if I itemize my invoices for landscaping services versus using a lump-sum invoice which would not be taxable. (thanks to the advice of someone at SCORE) However; after reading this tax code below, it appears that I do not have to charge sales tax on anything as long as I don't sell anything at retail, which I do not do. Everything I do is included as part of my landscaping services. Is there some specific wording of items on an invoice which would make items which are included in the invoice taxable vs. non-taxable?

It appears that if I list itemized materials or plants on the invoice as in this example:

10 Ixora Taiwanensis @$15.00 each = $150.00

I must collect sales tax on them, even though I've already paid sales tax once, and the item is being installed as part of a landscape renovation.

Thanks for the help...

Chris

The appropriate section of the FL Tax code is listed below.

3) Classification of contracts by pricing. The taxability

of purchases and sales by real property contractors is

determined by the pricing arrangement in the contract. Contracts

generally fall into one of the following categories:

(a) Lump sum contracts. These are contracts in which a

contractor or subcontractor agrees to furnish materials and

supplies and necessary services for a single stated lump sum

price.

(b) Cost plus or fixed fee contracts. These are contracts

in which the contractor or subcontractor agrees to furnish the

materials and supplies and necessary services in exchange for

reimbursement of costs plus a fee that is fixed in advance or

calculated as a percentage of the costs.

(c) Upset or guaranteed price contracts. These are

contracts in which the contractor or subcontractor agrees to

furnish materials and supplies and necessary services based on

costs plus fees but with an upset or guaranteed maximum price

which may not be exceeded.

(d) Retail sale plus installation contracts. These are

contracts for improvements to real property in which the

contractor or subcontractor agrees to sell specifically

described and itemized materials and supplies at an agreed price

or at the regular retail price and to complete the work either

for an additional agreed price or on the basis of time consumed.

In order for a contract to fit in this category, all the

materials that will be incorporated into the work must be

itemized and priced in the contract before work begins. If a

contract itemizes some materials but does not itemize other

materials that will be incorporated into the work, the contract

is not included in this category. Because the sale of the

materials is a separable transaction from the installation, the

purchaser must assume title to and risk of loss of the materials

and supplies as they are delivered, rather than accepting title

only to the completed work. The contractor may remain liable for

negligence in handling and installing the items.

(e) Time and materials contracts. These are contracts in

which the contractor or subcontractor agrees to furnish

materials and supplies and necessary services for a price that

will be calculated as the sum of the contractor's cost or a

marked up cost for materials to be used plus an amount for

services to be based on the time spent performing the contract.

These contracts are similar to cost plus or fixed fee contracts,

because the final price to the property holder will be

determined based on the cost of performance. A time and

materials contract may or may not also have a guaranteed or

upset price clause. Time and materials contracts differ from

contracts described in paragraph (d), because the materials are

not completely identified, itemized, and priced in the contract

in advance and because the property owner is contracting for a

finished job rather than the purchase of materials.

(4) General rule of taxability of real property

contractors. Contractors are the ultimate consumers of materials

and supplies they use to perform real property contracts and

must pay tax on their costs of those materials and supplies,

unless the contractor has entered a retail sale plus

installation contract. Contractors performing only contracts

described in paragraphs (3)(a), (b), (c), or (e) do not resell

the tangible personal property used to the real property owner

but instead use the property themselves to provide the completed

real property improvement. Such contractors should pay tax to

their suppliers on all purchases. They should also pay tax on

all materials they fabricate for their own use in performing

such contracts, as discussed in subsection (10). They should

charge no tax to their customers, regardless of whether they

itemize charges for materials and labor in their proposals or

invoices, because they are not engaged in selling tangible

personal property. Such contractors should not register as

dealers unless they are required to remit tax on the fabricated

cost of items they fabricate to use in performing contracts.

(5) Rule for (3)(d) contractors. Contractors who perform

retail sale plus installation contracts described in paragraph

(3)(d), do sell tangible personal property. They should register

as dealers and provide resale certificates for materials that

are itemized and resold under paragraph (3)(d) contracts. They

should not provide resale certificates for items that they use

themselves rather than reselling, such as hand tools, shop

equipment, or office supplies. They must charge their customers

tax on the price paid for tangible personal property, unless a

valid exemption certificate is provided, but not on the charges

for installation labor.

[GLAN]

Phew........I'm gonna have to read through that a couple more times.....when I'm not so tired.

Think I would be able to make sense of it

[thegreenman_us]

Thanks for any input you could give,

I'm pretty sure I've read it correctly, but a second or third opinion would certainly be helpful.

The whole reason for this is that I'm trying to convert to a CRM/business management system, but I can't find one that meets my needs and budget and also will create non-itemized invoices from itemized proposals.

[jwholden]

Call your state department of revenue services. They will get you the answer you need. Have some patience and keep moving up the chain until you get someone who sounds like they know what they are talking about. Then, get it in writing!