Taxable grocery, household and medical items versus Nontaxable grocery, household, medical items

Believe it or not, there’s a small list (well, 3 pages worth which is considered a small list by FDOR) of taxable grocery, household and medical items, and nontaxable grocery, household, and medical items. This list doesn’t include every single thing that is taxable and nontaxable but it’s a start. Click here for the list.

 

I install cabinets – I gotta charge tax or what?

Quick answer: You don’t have to charge tax on the installation of ‘permanently’ installed cabinets.

I’ve never heard of temporary cabinets – but you never know.

Anytime you permanently install an item (fixture) to a building (real property) the installation is not taxable.

Real Property: Any property attached directly to land, including the land itself (which means your lawn is considered real property).

Fixture: An item that is permanently attached to real property but keeps its own identity (basically you can tell it apart from the real property). But the definition, for FDOR, does not include titled property, machinery, or equipment.

Here’s a lil more info:

If you sell cabinets only – taxable.

If you permanently install cabinets only – not taxable.

If you sell and permanently install cabinets on the same order – not taxable.

See how that works?

If you sell a fixture only – taxable.

If you permanently install the fixture only – not taxable.

If you sell and permanently install the fixture on the same order – not taxable.

You can get more information about adding to real property (aka real property improvements) here.

Is My Home/Office Cleaning Service Taxable?

Cinderella decides to take her cleaning skills to the next level and go into business for herself – but if she decides to move to Florida to do it, will she need to charge taxes on her services? You already know the FDOR’s favorite answer: It depends.

Residential Services:

If Cinderella decides to clean homes, apartments, condos, any type of sleeping accommodation buildings, she will not have to charge taxes for her cleaning services. She will have to be pay tax on her cleaning supplies though.

Non-residential Services:

If Cinderella decides to mix it up and clean offices, hotel lobbies, warehouses, any type of area where business activities are typically held, she will have to charge sales tax. However, there are three exceptions that Cinderella may want to look into:

  1. Carpet cleaning is not taxable
  2. Pressure cleaning the exterior of a building is not taxable
  3. Cleaning buildings owned by nonprofit organizations that provide their current Florida Consumer’s Certificate of Exemption (DR-14) is not taxable.

But, she’ll still need to pay taxes on her cleaning supplies.

You can get more info about the taxation of residential and non-residential cleaning services here.

The Top Reason for Bills on Motor Fuel Tax Returns

The top reason for billings on Motor Fuel Tax returns is reporting too much or not enough gallons in your ending inventory compared to what was reported as received and disbursed. Just check your numbers before you submit your report. If you started with 100 gallons in your beginning inventory, received no gallons and distributed no gallons, then you shouldn’t have an ending inventory of 75 gallons on your return. FDOR allows a small percentage in change from beginning to ending gallons due to heat and other natural/uncontrollable factors but not something huge like a 25% difference. So just check your figures when it comes to your beginning, received, disbursed, and ending inventory to eliminate a small mistake that can turn into a huge bill.

Claiming Lawful Deductions on Your Sales Tax Return

The mysterious lawful deduction line, what is, what can be claimed there, would it flag an audit? About half of FDOR couldn’t answer this one for you without doing some research themselves; there are basically three categories a lawful deduction can fall into:

  1. You refunded tax to a customer
  2. You paid tax on items that you are selling (or incorporating into items you are selling)
  3. Enterprise zone jobs credits (but kiss that credit goodbye in 2016)
  4. ‘Any other deductions allowed by law’ (very vague isn’t it?)

Let’s go into a little detail with each one:

You refunded tax to a customer

Customer comes in, says this item sucks and they want their money back. So you refund them the amount of the item plus any tax that was collected. The tax amount you refunded to your customer can be entered on your lawful deduction (line 6 for DR-15 returns and line 5 for DR-15EZ returns).

You paid tax on items that you are selling (or incorporating into items you are selling)

Between rushing the kids out for school, packing your orders in your trunk and catching the family dog that managed to escape from the backyard – you realize you forgot to grab your resale certificate and will have to pay tax on all the items you intend to resale. Don’t panic, any tax that you are charged you can claim as a deduction on your lawful deduction line.

Enterprise zone jobs credits

Actually folks, this credit expired on 12/31/2015; you can read more about the expiration here L. So if you’ve never claimed it in the past – you can’t claim it as of the date of this post. And if you have claimed it in the past, then you already know how to claim it and there’s no need for me to explain it – so moving on . . .

‘Any other deductions allowed by law’

I’ve never seen this line used for anything outside of the three categories discussed above, except for a few occasions dealing with taxable subleases. If you sublease, then you can claim tax paid to your landlord for the area you are subleasing as a deduction. This applies only to the area you are subleasing and you will have to prorate the amount to calculate the deduction. You can find out more about the taxation of subleases here under 12A-1.070(8), F.A.C. Outside of those, there aren’t too many more examples about ‘any other deductions allowed by law’ and because of this I would recommend you receive something in writing from FDOR (make sure it’s something legally binding from FDOR’s Technical and Dispute Resolution Section) to clarify ‘any other deduction allowed be law’.

*Note: The lawful deduction amount cannot exceed the amount of tax collected; any remaining balances will have to roll forward to your next return, and so on and so on until you’ve exhausted the deduction. And will this flag an audit? Low amounts definitely not and higher amounts I’ve heard yes and no. If you have a high lawful deduction, you may want to just request a refund and you can read more about requesting refunds here*

If I Have No Tax Due, Do I Still Have To File A Return?

Yep, you’re still gonna have to give up a few minutes of your life that you will not get back to write a zero on a sheet of paper to mail off or type 0 on an online form to submit, and that goes for any type of return (Sales and Use Tax, Corporate Income Tax, Reemployment Tax, Insurance Premium Tax, Documentary Stamp Tax, Wireless E911 Fee, etc.). I know, I know – waste of resources of time but it is what it is.