Sales Tax on Labor in Florida?

[Boatguy30]

Ok,

Not looking to start a tax debate.

I just had $2500 of cushions work done. I supplied the fabric and the sewer supplied the foam, although I had offer to purchase the foam separate. But they said they only charged labor to cut the foam and no markup.

So, cushions are great; but a sales tax on the entire amount including labor is being charged I have never seen this and is perhaps inline with some version of florida tax law, I have NEVER seen this done for boating related items. Technically she would not charge tax on labor performed out of the shop which was a lot, but it is of course not itemized. I have worked for several marine businesses in FL and never taxed the labor.

I am happy to pay the tax on the roughly $700 in materials, but tax on the labor? These are custom bespoke items, not off the shelf storefront items.

What are I others's experiences with this, canvas, cushions, rigging???

[kbudd]

Originally Posted by Boatguy30

Ok,

Not looking to start a tax debate.

I just had $2500 of cushions work done. I supplied the fabric and the sewer supplied the foam, although I had offer to purchase the foam separate. But they said they only charged labor to cut the foam and no markup.

So, cushions are great; but a sales tax on the entire amount including labor is being charged I have never seen this and is perhaps inline with some version of florida tax law, I have NEVER seen this done for boating related items. Technically she would not charge tax on labor performed out of the shop which was a lot, but it is of course not itemized. I have worked for several marine businesses in FL and never taxed the labor.

I am happy to pay the tax on the roughly $700 in materials, but tax on the labor? These are custom bespoke items, not off the shelf storefront items.

What are I others's experiences with this, canvas, cushions, rigging???

In Wisconsin sales tax is collected on labor.

[GordMay]

Labour is taxable in Florida, in some situations.

From the Department of Revenue:

“... Charges for fabrication are taxable.
Fabrication occurs when material is cut, threaded, shaped, bent, welded, sheared, punched, drilled, machined, or is changed in some way from its original state, due to work performed on it ...
... The total amount charged for labor or services, when parts are furnished in installing tangible personal property that is sold and does not become a part of realty, is taxable, even though such charge may be separately stated.
Contractors and manufacturers who furnish and install the following items are considered to be retail dealers and are required to charge sales tax and surtax on the full price, including installation and any other charges:
... Drapes, slipcovers, bedspreads, curtains, blinds, shades, etc ...”

See ➥ http://dor.myflorida.com/dor/forms/current/gt800010.pdf

[letsgetsailing3]

Originally Posted by Boatguy30

Ok,

I am happy to pay the tax on the roughly $700 in materials, but tax on the labor? These are custom bespoke items, not off the shelf storefront items.

Many states have taxes on labor, but there are lots of nuances about it. You've likely paid it and not been aware of it.

[Greenhand]

Also true in Texas.

Perhaps it is more popular in places that don't have income tax?

[BandB]

When a repairperson supplies parts, sales tax and the applicable discretionary sales surtax are due on the entire charge made to the customer for adjusting, applying, installing, maintaining, remodeling, or repairing tangible personal property.

Charges for repairs of tangible personal property needing only labor or service are not taxable. The dealer must keep documentation to prove no tangible personal property was joined with, or attached to the repaired item. The sales tax and surtax apply when parts are used in the repair even if the parts are
provided at no charge.

Charges for fabrication are taxable. Fabrication occurs when material is cut, threaded, shaped, bent,
welded, sheared, punched, drilled, machined, or is changed in some way from its original state, due to
work performed on it.



Florida businesses are very careful in this regard as over the decades many have been found not properly collecting and submitting. The burden is on the business to document any services exempt from the charge. In your situation, the labor is clearly taxable.

[BandB]

Originally Posted by Greenhand

Also true in Texas.

Perhaps it is more popular in places that don't have income tax?

I've found that to be very true. States without personal income taxes do seem more aggressive in sales tax. It makes sense. Revenue must come from somewhere.

[smj]

Originally Posted by Greenhand

Also true in Texas.

Perhaps it is more popular in places that don't have income tax?

In Texas some labor is taxed but not all.

[BandB]

Originally Posted by smj

In Texas some labor is taxed but not all.

Texas is one of those states that every business category seems to be different. One has to just go down a long list to see where they fall. Even a couple of states tax some business services. Sales tax laws can be very convoluted sometimes. Florida is pretty straight forward.

And don't even talk about food and states that tax prepared food and not food that must be prepared. Imagine the nightmare for small mom and pop convenience stores (although not many of those left) figuring out which items in the store are taxable and which are not and then getting it right at the register.

[Cavalier]

Originally Posted by smj

In Texas some labor is taxed but not all.

In TX, sales tax isn't collected on professional (intangible) services such as legal, consultancy, medical etc. It is generally collected on labor which can be seen to directly improve asset/material values, such as fabrication, remodeling or manufacturing of an item.



There are some oddities however. If an auto-repair shop charges a customer for a part which includes labor then they don't collect tax, but pay tax to the suppliers of the part. If they line-item the parts and labor separately then they collect sales tax on the parts only. However, if a car is being remodeled (modification which isn't a replacement/repair) then sales tax should also be collected on the labor.



The Comptrollers always have some varying oddities from state to state.

[a64pilot]

My first electric bill from Gulf Power was thirty something dollars, seeing as how the slip was un-occupied and no electricity was used I thought that a little excessive so I called, One of my questions was since they had provided no goods or service, what was I being taxed on? Of course the person on the phone didn't understand and I didn't won't to push something that I had no chance in winning, but I believe sales tax is charged whether it's due or not.
PS current electric bill was $51. $12 of that was for electricity, the rest was fees and taxes.

[smj]

Originally Posted by Cavalier

In TX, sales tax isn't collected on professional (intangible) services such as legal, consultancy, medical etc. It is generally collected on labor which can be seen to directly improve asset/material values, such as fabrication, remodeling or manufacturing of an item.



There are some oddities however. If an auto-repair shop charges a customer for a part which includes labor then they don't collect tax, but pay tax to the suppliers of the part. If they line-item the parts and labor separately then they collect sales tax on the parts only. However, if a car is being remodeled (modification which isn't a replacement/repair) then sales tax should also be collected on the labor.



The Comptrollers always have some varying oddities from state to state.

On remodels and repairs to a commercial building the labor is taxable in Texas. If the building is residential then the labor is not taxable. They sure do get specific in the state of Texas!

[tdoster]

This is true in Texas as well. Many times it is just built into the price since it is a sore subject but it actually makes it easier for the business as you pay on receipts instead of figuring out what was labor and what was materials. When negotiating, ask if it includes tax up front.

[BandB]

Originally Posted by smj

On remodels and repairs to a commercial building the labor is taxable in Texas. If the building is residential then the labor is not taxable. They sure do get specific in the state of Texas!

Well, add this one. In some states, rentals of homes or apartments are subject to sales tax if for less than a year but not if there is a signed lease for a year or more. So two apartments rented in one building. One subject to sales tax, one not. We ran across this situation in NYC.

[Stu Jackson]

Could someone explain why the question was about FL but the answers are about TX?

Thanks, Gord, for the real answer.