Sales and Use Tax on Interior Decorators

What interior decorators need to know about Florida sales and use tax.

Definitions

Tangible Personal Property

Property that may be seen, weighed or measured, touched, or is perceptible to the human senses; this definition includes electric power or energy. Tangible personal property should not be confused with real property (also called "realty" or "real estate"), which is defined as land, improvements thereto, and fixtures.

What is Taxable?

An interior decorator's fee is taxable as a part of the selling or cost price when the transaction involves the sale of tangible personal property. The fee is also taxable if paid in the form of a trade discount or billed on a cost plus basis. Interior decorators' labor costs reimbursed by a client for the fabrication of tangible personal property (such as bedspreads or draperies) are taxable.

The sale and installation of tangible personal property is taxable, even if the installation charge is separately stated. Examples include, but are not limited to, drapes, slipcovers, bedspreads, curtains, blinds, shades, and rugs. An interior decorator should furnish the supplier with a signed copy of the Annual Resale Certificate when tangible personal property is purchased for resale.

Tangible personal property purchased to use in improving real property is taxable based on the decorator's cost price of the materials and supplies used or consumed in performing the job. Some examples are paint and wallpaper. Mirrors are treated as real property improvements when affixed by nails, screws, glue, cement, or in a similar manner. Carpet is also considered real property when affixed by nail, glue, or in some other manner so that it becomes the finished floor. If not installed in the above manner, mirrors and carpet are treated as tangible personal property.

Discretionary Sales Surtax

Interior decorator fees 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 tangible personal property is delivered. For more information, request a copy of the Discretionary Sales Surtax brochure (Form GT-800019) and a list of county tax rates (Form DR-15DSS) from your local Department of Revenue (DOR) service center, the DOR Distribution Center, or Taxpayer Services.

What is Exempt?

An interior decorator's fee is exempt as a professional or personal service when materials or supplies are not used or sold. To qualify for exemption, the fee must be solely for consultation or designing services and unrelated to any tangible personal property transaction. Decorators' labor costs reimbursed by a client for improving real property (e.g., painting murals on walls) are exempt.

Samples provided by the manufacturer to an interior decorator or client at no cost are exempt. The samples must serve no useful purpose other than comparison of color, texture, or design (e.g., paint color cards, flooring samples, and fabric swatches).

Purchases for Resale

In order to make tax-exempt purchases for resale, you should submit a signed copy of your Annual Resale Certificate to a seller when making purchases or rentals of property or services that you intend to resell or re-rent as part of your business. It is your duty as a dealer to collect and remit the applicable amount of sales tax from your customers when you finally do resell or re-rent the property or service at retail.

You should not use the Annual Resale Certificate to make purchases or rentals that you will use in your business rather than resell or re-rent. There are criminal and civil penalties for the fraudulent use of the Annual Resale Certificate.

How to Register

To register, fill out an Application to Collect and/or Report Tax in Florida (Form DR-1). You can obtain the application from your local DOR service center or one of the contacts listed on the back panel of this brochure. There is a $5.00 registration fee for in-state dealers. DOR also offers Internet registration; visit our Internet site at www.myflorida.com/dor and click on e-Services.

Reference Material

Tax Rules

Call Taxpayer Services to request a copy of Rules 12A-1.001, Florida Administrative Code, Exemptions; 12A-1.006, F.A.C., Tangible Personal Property; 12A-1016, F.A.C., Installation Charges; and 12A-1.051, F.A.C., Real Property Contractors.

Brochures

Ask for the following brochures, available from your local DOR service center, the DOR Distribution Center, or Taxpayer Services:

• Florida's Sales and Use Tax
• Discretionary Sales Surtax
• Repair of Tangible Personal Property
• Building Contractors

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