Sales and Use Tax on Detective, Burglar Protection, and Other Protection Services

What service providers need to know.

What is Taxable?

Services

Detective, burglar protection, and other protection services under SIC Industrial Numbers 7381 and 7382 are taxable. The following are examples of services that are subject to sales tax:

• Armored car service
• Burglar alarm monitoring and maintenance
• Detective agency services
• Dogs (rental of) for protective services
• Fingerprinting service
• Fire alarm monitoring and maintenance
• Guard service
• Lie detection service
• Passenger screening services
• Polygraph service
• Private investigators
• Protective service, guard
• Security guard service

Taxable Components of a Sale of Services

The amount of taxable sales includes all expenses (including any taxes paid on those expenses) incurred in activities necessary for the performance of the service.

Example: A security company provides security to a client for $125,000 a year, plus tax. The contract includes $85,500 in direct wages for several security guards. The security service pays $6,541 in Social Security (FICA) taxes on the wages paid to the security guards. Neither the $85,500 in wages nor the $6,541 in FICA tax can be deducted from the $125,000 charge for this taxable service when computing the sales tax. The company bills the client for $125,000 plus tax.

Example: A private investigator, in performing a taxable service for a client, stays in a hotel room, for which he pays $100 plus $6 tax. He bills the client $500 for his service, plus reimbursement of the $106 expenses incurred in performing the service. The investigator bills the client for $606 plus tax. The tax on the investigator's service will be six percent of the total $606 charged, or $36.36

Purchases

Detective, burglar protection, and other protection service providers are considered the ultimate consumer of any tangible personal property used in providing their services. As such, the service provider is liable for the sales and use tax on any purchases used in providing these services.

Exception: Additional rules may apply to sales of warranty contracts and leases of burglar and fire protection equipment. Call Taxpayer Services for more details.

Discretionary Surtax

Detective, burglar protection, and other protection services that are subject to sales tax are also subject to any local discretionary surtax. The surtax rate is determined by the county in which the service is performed. For more information, call Taxpayer Services. Ask for the Discretionary Sales Surtax Brochure (GT-800019) and the list of surtax counties and rates (Form DR-15DSS).

What is Exempt?

The following are examples of sales that are exempt:

• Investigative services performed within Florida but used outside this state by the purchaser; or investigative services performed when the purchaser's primary benefit of the services is outside this state.
• Investigative or security services provided directly to a government entity that is exempt from sales and use tax under section 212.08(6), Florida Statutes, if payment is made directly by the government entity.
• Sales to nonprofit organizations that hold a current Florida Consumer's Certificate of Exemption (Form DR-14).

Sales Tax Registration

If you sell taxable services to others, you are required to register as a dealer and collect sales tax. You can register to collect and/or report tax via the Department's Internet site. Go to www.myflorida.com/dor and click on e-Services. If you do not have Internet access, you can complete a paper Application to Collect and/or Report Tax in Florida (Form DR-1). Obtain Form DR-1 from your local DOR service center or one of the contacts listed on the back panel.

As a registered dealer with the Department, you will be provided with an Annual Resale Certificate (Form DR-13). A copy of this form should be presented to the selling dealer when making tax-exempt purchases for resale. Registered dealers should not extend a resale certificate when making taxable purchases or rentals for their own use.

Reference Material

Tax Rules

Call Taxpayer Services to request a copy of Rule 12A-1.0092, Florida Administrative Code, Detective, Burglar Protection, and Other Protection Services. Tax rules are also available on the Department's Internet site. Look for the Florida Tax Law Library.

Brochures

The following brochures are available from your local Department of Revenue service center, the DOR Distribution Center, or Taxpayer Services:

• Florida's Sales and Use Tax
• Discretionary Sales Surtax
• Florida's Annual Resale Certificate for Sales Tax

For Information and Forms

Persons with hearing or speech impairments may call the TDD at 800-367-8331 or 850-922-1115.

• Order multiple copies of forms from our Internet site, or
• Mail form requests to:
  Distribution Center
  Florida Department of Revenue
  168A Blountstown Hwy
  Tallahassee FL 32304-3761