Sales and Use Tax on Mobile and Prefabricated Home Repair, Remodeling, and Additions

How does sales and use tax apply to repair/remodeling of mobile or prefabricated homes?

Definitions

Fixture

An item that is attached to real property in a permanent manner and becomes an accessory to a building, other structure, or land but does not lose its identity when installed. Mobile homes are not fixtures unless assessed as real property.

Real Property

The land, improvements thereto, and fixtures; also called "realty" and "real estate".

Tangible Personal Property

Personal property that may be seen, weighed, measured, or touched or is in any manner perceptible to the senses, including electric power or energy.

How Does Tax Apply To a Job?

To determine how sales or use tax applies to a job, check the decal that is attached to the home.

If the unit has an R.P. (real property) decal, the job is classified as an improvement or repair to real property. The repairperson is considered the ultimate consumer of the materials and supplies used to improve the mobile or prefabricated home. The repairperson should pay tax on these items and charge no tax to the homeowner. If sales tax was not paid at the time the materials and supplies were purchased, the repairperson is responsible for paying use tax. See "Use Tax".

Note: When the unit has an R.P. decal, the decal number must be recorded on the contract or invoice as proof that the repair was performed on real property.

If the unit has an M.H. (mobile home) decal or no decal, the job is classified as a repair to tangible personal property. When the repairperson supplies any materials used in the repair, the entire charge (including labor) is subject to sales tax and should be charged to the customer. This is true even when the repairperson does not make a separate charge for materials to the customer. Unlike a real property improvement, where the repairperson is the ultimate consumer of the materials, the repairperson is not required to pay sales or use tax since the tax will be collected from the homeowner. In this case, the repairperson may issue an Annual Resale Certificate to purchase materials and supplies for the job. The repairperson must be registered with the Department to receive this certificate. See "Who Must Register to Collect Tax?"

When the repairperson supplies NO materials for a repair (provides labor only), then no tax should be charged to the customer. The repairperson may wish to write on the invoice that the repair was "labor only."

Who Must Register to Collect Tax?

Repairs to Tangible Personal Property

A repairperson who repairs any mobile or prefabricated homes with an M.H. decal or no decal must register with the Department of Revenue and collect and remit sales tax.

How Do I Register to Collect Tax?

You can register to collect and remit sales 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). See "For Information and Forms" below.

After your registration application is approved, you will receive a Certificate of Registration (Form DR-11), an Annual Resale Certificate (Form DR-13), and your tax return forms. The Annual Resale Certificate may be used to purchase materials tax-exempt that will be used for repairs of tangible personal property. You must present a signed copy of your certificate to your supplier when making the purchase.

Use Tax

Use tax is a component of Florida's sales tax. If you purchase materials and supplies tax-exempt but later use them for an improvement to real property, the "use" of the items is subject to use tax. You must report and pay use tax on these items, plus any applicable penalties and interest. There are additional penalties for intentional misuse of an Annual Resale Certificate.

Discretionary Sales Surtax

Florida counties are authorized to levy a discretionary sales surtax on most transactions in the county that are subject to sales and use tax. The tax is computed using the tax rate in the county in which the consumer, usually the repairperson, takes delivery of the tangible personal property. In the case of retail sale plus installation contracts, compute the tax using the tax rate of the county in which the improvements or repairs are made. If you use materials to fabricate items at your shop, compute the tax using the tax rate in the county where your shop is located. For more information, ask for a Discretionary Sales Surtax brochure (Form GT-800019) and a list of surtax counties and rates (Form DR-15DSS.

Reference Material

Tax Laws

Contact Taxpayer Services to request a copy of section 212.05, Florida Statutes, Sales, storage, use tax; Rule 12A-1.051, Florida Administrative Code, Sales to or by Contractors Who Repair, Alter, Improve and Construct Real Property; and 12A-1.006, F.A.C., Charges by Dealers Who Adjust, Apply, Alter, Install, Maintain, Remodel, or Repair Tangible Personal Property. Tax laws 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 DOR service center, the DOR Distribution Center, or Taxpayer Services:

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

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