1.1 Legal Basis: Chapter 212 of the Florida Statutes
The legal foundation for the Florida Sales and Use Tax is established in Chapter 212 of the Florida Statutes. This chapter outlines the rules for imposing, collecting, and administering sales tax within the state. It defines who must collect the tax, what transactions are taxable, and how the tax must be reported to the Florida Department of Revenue (DOR).
What Does Chapter 212 Cover?
Chapter 212 contains multiple sections that define:
Who is required to collect sales tax?
Any individual or business that sells tangible personal property or certain taxable services within Florida.
Which goods and services are taxable?
Most tangible goods, and some specified services such as rentals, accommodations, and entertainment.
Which items are exempt?
Some goods are exempt for social, economic, or public health reasons (e.g., prescription medications, basic groceries).Applicable tax rates:
Applicable tax rates
A statewide rate of 6%, with the option for counties to impose local surtaxes.
💡 Key Insight: Although the base state sales tax is 6%, each county may apply a discretionary surtax, bringing the total sales tax rate up to 8.5% in some areas.
📚 Key Statutory Sections
§ 212.05 Establishes the tax on sales, leases, and rentals of tangible personal property.
§ 212.06 Defines the responsibilities of “dealers” (any person selling taxable property or services).
§ 212.08 Details exemptions from the tax (e.g., groceries, medicine, agricultural products).
§ 212.02(19) Defines “tangible personal property” as anything perceptible by the senses.
⚖️ Legislative Authority
The Florida Legislature has the power to impose sales and use tax through statutes enacted under Chapter 212. This authority allows the state to generate revenue to fund public services, while also granting counties limited authority to impose an additional local tax, known as a discretionary sales surtax.
Tools the FDR Offers That You Should Be Using
Legal clarity: Understanding the statute allows business owners and accountants to apply the law correctly in daily operations.
Compliance protection: Lack of awareness does not exempt anyone from compliance. Incorrect sales tax collection or reporting can result in penalties and interest.
Accounting accuracy: Proper billing, bookkeeping, and DOR reporting must follow this law to be legally valid and auditable.
1. State vs. Local Surtax (Discretionary Sales Surtax)
Legal Basis Under Florida Law
Statutory Reference: § 212.05(1)(a)1.a., Florida Statutes
“It is hereby declared to be the legislative intent that every person is exercising a taxable privilege who engages in the business of selling tangible personal property at retail in this state.”
Florida applies a base statewide sales tax rate of 6%, but individual counties are allowed to impose an additional surtax, typically ranging from 0.5% to 2.5%, under § 212.054 and § 212.055.
This discretionary surtax is used to support local initiatives such as education, transportation, and infrastructure.
💸 The surtax is only applied to the first $5,000 of any single taxable item when sold to the same purchaser.
🗺️ Surtax varies by county, so businesses must use the customer’s delivery address (or sale location) to determine the applicable rate.
📊 The combined total (state + surtax) can reach up to 8.5% in some counties.
The Florida Department of Revenue provides official lookup tools to verify surtax rates by ZIP code and jurisdiction.
What This Means for Your Business?
Under Florida law, sales tax is not just a transactional fee,it represents a taxable privilege.
If your business sells tangible goods at retail within the state, you are exercising a privilege that is subject to tax, regardless of whether you operate physically in Florida or via digital platforms.
Who Must Comply?
This statute applies to:
🔵 In-State Businesses (physical locations, storefronts, local delivery)
🔵 Remote Sellers (e.g., online stores or sales via third-party platforms)
If you have a physical presence OR an economic nexus in Florida, defined as $100,000+ in annual sales into the state,you are required to collect sales tax.
What Is Tangible Personal Property?
According to § 212.02(19), F.S., tangible personal property refers to items that can be physically perceived by human senses objects that can be seen, touched, weighed, or measured.
The definition includes any physical good, regardless of whether it is new, used, or resold, as long as it is delivered or intended for use within Florida.
✅ Common Examples of Taxable Tangible Personal Property:
Electronics such as phones, computers, televisions
Furniture, appliances, and tools
Clothing, shoes, jewelry, cosmetics
Packaged food or any physical item shipped to a Florida customer
❌ Items Not Considered Tangible Personal Property:
Downloadable digital products (unless specifically taxable)
Services in general (some are taxable, as explained next)
Real property: land, buildings, and permanent structures
💡 Key Insight: If the service and product are invoiced together as a single charge, the entire transaction may be taxed. If they are listed separately and the service qualifies as exempt, only the tangible item is subject to tax.
Service or Sale?
Based on: § 212.05(1)(a), F.S. y F.A.C. 12A-1.051
Although most services are exempt from Sales Tax in Florida, there are specific situations where the service is closely tied to the sale or installation of tangible personal property, making it a taxable transaction. This typically happens when:
🔵 The service includes delivery of tangible items.
🔵 The service modifies, improves, or installs tangible property.
🔵 It is considered a “bundled transaction.”
For example, if a company installs a security system and sells the equipment, the entire invoice may be taxable.
Critical Cases Installation, Cleaning, and Contractors
Procedural Approach to Determining Taxability , Identifying the Type of Service
The first step is to determine whether the service provided is listed as taxable under Chapter 212 of the Florida Statutes or presumed exempt. This requires consulting the statutory text and the technical guidance published by the Florida Department of Revenue (FDR).
Example: Residential cleaning services are exempt, but commercial cleaning services are taxable.
Evaluating the Purpose of the Service
Tax treatment partly depends on how the invoice or contract is structured. If the contractor provides materials along with installation, they act as a retailer and must collect sales tax. If the customer supplies the materials and the labor is separately stated, it may be considered exempt. Clearly itemizing materials and labor allows for correct tax application.
Example: Installing flooring that is sold together with the materials may be treated as a single taxable sale of tangible personal property. However, if installation is contracted separately and the customer provides the materials, the tax treatment could be different.
ll revenue must be properly recorded in the accounting system, indicating whether tax was collected, exempted, or non-applicable. It’s essential to label transactions accurately at the point of sale (POS). In addition, business owners should refer to Florida Department of Revenue (FDR) publications like Tax Information Publications (TIPs), which provide updated official guidance.
Example: TIP 20A01-02 explains which types of cleaning services are subject to sales tax in Florida.